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Resolve to pull the plug on runaway spending on major sporting events

December 27, 2018
Resolve to pull the plug on runaway spending on major sporting events

This column was published in the Telegraph-Journal on December 27, 2019.

In 2019, governments should set a taxpayer-friendly New Year’s resolution: stop bidding on major sporting events that rely on a bottomless pit of tax dollars. 

Unsurprisingly, New Brunswick’s projected bill for hosting the 2021 Francophonie Games is now estimated to cost almost seven times more than originally projected. Premier Blaine Higgs has already committed to capping the provincial contribution at $10 million, and given that the organizing committee now admits the games can’t be hosted for the originally-estimated $17.5 million, Higgs says calling it off may be inevitable.

But even $10 million is more than the province can afford and that could snowball into many millions more when the games are said and done. The premier said he doesn’t want to drag this out. So, let’s skip the song and dance and say game over.

In 2015, when the government under former Liberal Premier Brian Gallant launched the bid to host the games in Moncton-Dieppe, the cost was pegged at $17 million, with taxpayers expected to pay through multiple levels of government.

Today, the projected cost has snowballed to $130 million. There’s new infrastructure spending, new bills for hotels and meals, and new costs for human resources, communications and marketing.

The cost has increased by 664 per cent. And we’re still more than two years out.

Taxpayers have already shelled out $2.65 million on these games – and not one race has been run – not one ping pong ball has been paddled.

Higgs and federal Intergovernmental Affairs Minister Dominic LeBlanc are bickering over which level of government should be on the hook for cost overruns, but how does that help taxpayers?

Federal and provincial coffers are like your chequing and savings accounts. Whichever one you draw from, it’s still your money. And, in New Brunswick right now, both accounts are deep into overdraft.

Common sense can referee this match, because both levels of governments are running big deficits and can’t afford the 2021 Francophonie Games.

Taxpayers won’t be losing out, because economists agree that any so-called economic spinoffs generated by the games are nothing more than a Newfoundland steak (read: baloney).

Moncton economist Richard Salliant said: “If we use the taxpayer dollars to dig holes and fill them back up, that will have an economic impact. That doesn’t mean it’s a smart thing to do.”

But why don’t governments learn their lesson about pouring tax dollars into runaway spending on these events?

In Toronto, the 2015 Pan Am Games came in $342 million over budget, with more than $5 million spent on performance bonuses.

In Calgary, the 2026 winter Olympic bid was projected to cost $5.23 billion. It was put to a plebiscite and Calgarians voted against hosting the event. They were smart to do it. But politicians there were clamouring to host the games, damn the cost!

In Tokyo, the 2020 Olympics are set to cost Japan upwards of $25 billion – more than four times the projected cost.

Montreal’s 1976 Olympics cost overrun was a staggering 720 per cent, taking three decades to pay off.

They say the definition of insanity is doing the same thing over and over, expecting different results. 

Luckily for New Brunswick taxpayers, the government still has a chance to pull out of hosting the Francophonie Games and the premier seems keen to do it. Going into the new year, can we resolve to finally learn this lesson?

Paige MacPherson is Atlantic Director of the Canadian Taxpayers Federation.

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