Friday, January 16, 2009

Four months to go, and the Liberals should be worried

British bookies take bets on election results and post odds years in advance.
Perhaps it's the next bit of gambling expansion the B.C. Liberals will look at, now that people are getting less keen on scratch and lose tickets.
But the oddsmakers would be having a tough time right about now.
Even a year ago, Gordon Campbell and company would have been heavy favorites.
The economy was good, Olympic plans were allegedly on track and voters in the Lower Mainland could see big infrastructure projects all over the place.
There were problems - homelessness and street disorder, health care waits and gaps in seniors' care. The forest industry, especially the coastal industry, was a mess.
But problems are part of governing. It's only when they become really serious, or when the party in power doesn't seem to have any plans to deal with them - or worse, doesn't acknowledge them - that voters get really riled
And Carole James and the New Democrats hadn't convinced voters that they could do any better.
The polls suggest that's changing. A year ago, the Mustel Group had the Liberals with the support of 48 per cent of decided voters and the NDP with 36 per cent. (In the 2005 election, the Liberals captured 46 per cent of the vote and the New Democrats 42 per cent.) That kind of lead translates into a comfortable majority.
But the last Mustel poll, done in late November, found the two parties tied.
Since then, the Liberals have run into more problems. Some are definitely of their own making; others are just the kind of bumps - like the global economic collapse - that would jar any government.
MLAs gathered in Victoria for an emergency legislative session to pass a law letting Vancouver borrow almost $500 million. The city needs the money to rescue the botched athletes' village project.
The mess was created by terrible decisions made by Vancouver's former council, not the province. (The new council, now dominated by provincial New Democrats, is unlikely to make things easy for the government.)
But it's bad news for Campbell. The price tag for next February's Games is already an issue, especially as the economy slumps. The $500-million overrun on the Vancouver Convention Centre raised doubts about the government's competence and it has been criticized for secrecy on the real cost of the Games. The security bill is still secret, but will likely be five times the $175 million the province maintained would be adequate.
At a time when the government is looking for programs to cut next year to save money, it will likely be asked to spend some $350 million in extra security costs for a 16-day event.
The global economic woes have nothing directly to do with Campbell and the Liberals.
But he will be judged on two fronts as a result - on the effectiveness of efforts to respond to the crisis and, much more subjectively, on whether he "gets it."
So far, there isn't much sign of a response, although next month's budget will be the real test.
Campbell's real problem might come when voters decide whether he actually understands and cares about their concerns. An Angus Reid Strategies poll last fall found 59 per cent of those surveyed didn't believe Campbell understood the problems of British Columbians.
Campbell did outpoll James on management competence, an important factor in peoples' voting decisions.
That's why the Olympic cost problems are so critical. The Liberal campaign is pushing the themes that the New Democrats can't be trusted and aren't competent. The risks are especially high at such a turbulent time, they will argue.
But the distinction blurs if voters are wondering about the Liberals on the same two qualities.
Campbell and the Liberals are still the favorites. But a year ago, it looked like they were cruising to an easy victory; today, it's a real contest.
Footnote: The Liberals' problems are compounded by the perception that this is a one-man government, with Campbell's enthusiasms - like climate change - setting the agenda. A bigger effort to demonstrate a larger role for ministers and MLAs would have insulated the party from some of these problems.

Thursday, January 15, 2009

B.C.'s lobbying laws more hole than net

The promised lobbyist registry was a good idea when it was introduced by the Liberals, and, don't forget, followed the NDP government's failure to do anything to regulate lobbying.
But, as Sean Holman demonstrates at, the lack of effective enforcement means it's perfectly safe to ignore the rules.
After the B.C. Rail scandal, you would expect the government to be keener on dealing with the need to protect the public interest and curb the influence of thjose with political power and money (the two being tightly linked).

Tuesday, January 13, 2009

The Games nightmare

How did we get into this Olympic thing, anyway?
The Games are a year away, and British Columbians face rapidly rising costs and growing doubts about the event's economic value.
Provincial taxpayers are likely on the hook for more than $2 billion for the Games and directly related infrastructure costs. That's about $450 per person.
Municipal governments - B.C. taxpayers, again - will pay some $600 million.
The federal government will end up contributing another $800 million.
That's a cost of something like $3.5 billion. And that's not including the out-of-control spending on the Vancouver Convention Centre, now at $900 million, or the $2 billion to expand rapid transit to Vancouver's airport. Both those projects went ahead, during a time of high construction costs, at least in part to support Vancouver's Olympic bid.
So just the basic costs tied to the Games will cost the public about $220 million per day during the big show.
That's not how the Games were sold to British Columbians by government. The Liberals, despite looking increasingly foolish, have consistently tried to claim the province is only contributing $610 million.
That required excluding the Sea to Sky Highway improvement costs, which the province's auditor general said should be considered part of the Games expenses. Poor Finance Minister Colin Hansen was even forced to try and claim that the government's Olympic Secretariat was not a Games cost.
And the government also claimed for years - despite mounting evidence - that the initial $175-million projection of security costs was credible. It has now conceded the costs will be higher, but won't say how much higher. Stockwell Day, federal minister on the file, says perhaps $1 billion will cover the costs.
And the federal government is only on the hook for $87.5 million, although expect it to come up with at least some of the increase.
The big risk-taker in this deal was the provincial government, which accepted responsibility for all cost overruns or revenue shortfalls.
Even the costs of the incredible mess in Vancouver, where city council ended up taking on all the risk involved in completing the athletes' village, could end up being worn in part by the province.
That could include at least a share of the hundreds of millions of dollars at risk in Vancouver's bungled plan for athletes' housing. A private developer was supposed to build condos that would be used for the athletes' village and then sold.
But the lender has cut off funding because of cost overruns and market concerns. The city foolishly entered into agreements that leave it guaranteeing all the costs - currently estimated at $875 million - to complete the project in time for the Games.
The money is certainly not all at risk. The condos will have value. But much less than expected, and Vancouver taxpayers will pay for the losses, which could easily be $250 million. And ultimately, the city might come looking for provincial help, pointing to the government's guarantees.
As all this happens, the potential benefits of the Games are shrinking. The long-term selling point was marketing exposure, bringing tourism and investment. But as the global economy chills, so does the chance of luring tourists and investment. (And anyway, how many of you made plans to vacation in Turin after the 2006 Winter Games there?)
Back to the original question- how did this happen? For starters, the whole Games bobsled started down the icy run with a gentle nudge. A group of boosters were interested, then premier Glen Clark kicked in $150,000 to help them and we were off on the thrill ride. We just kept going faster down the slope and no one really stopped to figure out if this was a good idea.
The other big problem has been lack of honest, open information. If the government had accepted the auditor general's recommendations in 2006, the risks would have been managed.
As it is, B.C. taxpayers face a big bill for this ride.
Footnote: The money is mostly spent or committed and the show must go on. British Columbians can at least expect every effort to control costs and protect their interest now - and much more openness. And it's critical to ensure that every effort is made to capture the Games' benefits.

Monday, January 12, 2009

How we stumbled into Olympic problems

First, the NDP government got all enthusiastic about a bid and launched the luge down the icy chute before anyone really thought much about whether we actualy wanted the Games, or why we should.
Second, no one paid too much attention because a) it was just a bid anyway; and b) the Games are a "good thing."
Third, governments got away with too much secrecy and silly claims, as in security costs will only be $175 million.
Fourth, effective oversight was ignored or eliminated. The auditor general's concerns were brushed aside; the public's representatives on the VANOC board reported to political masters.
Fifth, even people like I who raised issues, weren't nearly dogged enough.
Still, I repost a column from before the bid went in that suggests the warning signs were there for all to see.

Tuesday, June 22, 2002

Olympics' bid looking fiercely expensive

British Columbians should be getting mighty nervous about what the Vancouver-Whistler Olympic Games could cost us.
The 2010 Games could turn out to be a great thing for B.C., a chance to showcase the province before the world.
But the Olympic bid is steam-rolling forward without nearly enough public information or consultation on the costs and benefits.
The Olympic bid committee has already sent its proposal off to the IOC, a list of promises of all the things you will do to make these the best Games ever.
Sadly, you won't know what those promises are, the bid committee having decided they should stay secret. That seems a little odd, since Bern, Switzerland, one of B.C.'s top rivals, has posted its proposals on the web site for all to see. Bern also plans a referendum before going further, something citizens in Whistler have unsuccessfully been seeking.
There's much encouraging in B.C.'s Olympic bid. The Games are expected to be officially self-supporting, with revenue covering the operating costs and maybe leaving a little money over. And the province could well score future tourism business and some nice sports facilities.
But the self-supporting claim is misleading.
Organizers already have about $9 million from the province to help make the pitch to get the Games. Ottawa and B.C. have promised $310 million each for new facilities for sports events.
And on top of that, the federal and provincial governments are on the hook for security costs, easily $500 million if recent Games are an indication.
And there's more.
The Games bid requires an expanded convention centre, which would serve as the headquarters for some 10,000 journalists, and cost some $500 million.
There's a strong case for a new convention centre, but it's certainly not clear why those who will benefit - Vancouver hotels and restaurants - shouldn't pay the bill.
Bid chairman Jack Poole also says that without major improvements to the Sea to Sky Highway to Whistler, Vancouver won't win the Games. Figure $1.3 billion for that. And proponents also want a rapid transit line from the airport, another $1.4-billion megaproject.
Add them up, and you'll see that those cost-free Games will really reach into taxpayers' pockets for $5.3 billion.
Of course there will be benefits, including an estimated $2 billion in tax revenue for the two levels of government. But that doesn't come close to the costs.
And that too would be fine if we had decided that the most important capital priorities for B.C. were a better highway to Whistler and rapid transit from the airport.
But we haven't made that decision. And I'm not sure that people bouncing over rutted roads in the northeast would be so keen to know that their tax dollars were being used to make it easier for people to get to their chalets in Whistler. Or that people in the North and Interior facing health care cuts would think that a better way of getting from the airport to downtown Vancouver should be a top priority.
The Olympic bid has crept up on British Columbians. Few people realize that a specific proposal has been submitted, or that in about a year B.C. could have actually won these Games.
That's partly our fault. The Games people have been out talking about their plans, but the public hasn't paid much attention.
But it's also the proponents' fault, for failing to provide enough information about exactly what this will cost and where the money will be found within the finances of a government that says it's too broke to provide a wide range of other services to citizens.
The Games may make sense. But right now, it feels like we're being asked to hand over a lot of money with no clear idea what we're getting, or why we should want it.