The Debt

[NAB]

One of these fine days someone's going to start "following the money" with respect to where the "revenue neutral" carbon tax money the government collects really ends up too ;-)

Nab

[Urbane]

It looks like the 2010 Olympics wasn't so bad for the province and our debt situation after all. The BC Liberals have made their share of mistakes but the Olympics were a success:

Olympic-sized benefits to B.C.
by The Canadian Press - Story: 66582
Oct 27, 2011 / 10:35 am

British Columbia's Finance Minister Kevin Falcon says the latest figures on the benefits of the 2010 Winter Games prove the Olympics provided a powerful economic lift.

Results of the seventh report from consulting firm PriceWaterhouseCoopers show initial estimates were almost as good as gold when tallying the social and economic impacts of the Games.

PriceWaterhouse spokesman Michael Calyniuk says the report covers the Games and nine months afterward, providing the best snapshot of the event to date, revealing positive impacts in all eight areas examined.

He says from 2003 to the end of 2010, the Games generated at least $2.3 billion in real gross domestic product to B.C. alone, more than 45,000 jobs were created and investment in sport paid off with a record haul of gold medals.

The report also confirms nearly 650,000 visitors to B.C. in February 2010, matching estimates from last year that led former premier Gordon Campbell to predict provincial tourism revenues would double by 2015.

[NAB]

LOL. They'll have a hard time convincing anyone on Van Isle about that, or even probably most places outside the lower mainland. And of course we will have to wait and see if any of it relates to anything lasting in any event.

Nab

[Urbane]

No question that many people can't see or choose to ignore the long-term benefits of some investments. The Olympics, it would appear, are turning out to have been a short-term pain in the pocketbook but a long-term gain. The same may well be true for the new roof on BC Place Stadium. Not all debt is bad debt.

[steelrules]

LOL. They'll have a hard time convincing anyone on Van Isle about that, or even probably most places outside the lower mainland. And of course we will have to wait and see if any of it relates to anything lasting in any event.

Nab

Salt lake city didn't have any lasting benifit from the games I doubt BC will.
Keeping them honest, what was said back then "it will be a $10 billion boost to the province" then down graded to 4 billion and now it's 2.3 billion.
http://thetyee.ca/Blogs/TheHook/Olympic ... icImpacts/

[NAB]

The total cost to Canadian and British Columbian taxpayers to stage the Games is estimated between $6 and $7 billion.

And considering that is now debt, I wonder if they have added the interest on the borrowings for however long it takes to pay it off. Even who it is that gets to pay it off - those who primarily benefitted from the "economic boost to the BC economy"? (Not likely LOL). All debt is bad dept if you cannot pay it back and just budget to pay the interest charges forever.

Nab

[sooperphreek]

how long was it that montreal was paying for their stuff? 40 years or something?

[flamingfingers]

Opinion: Liberal fiscal wizards dodge the day of reckoning at BC Hydro

By Vaughn Palmer, Vancouver Sun columnist October 27, 2011

VICTORIA --

As the B.C. Liberals tried to duck the auditor-general’s damning report on their handling of BC Hydro finances Thursday, they discounted the findings as little more than a critique of bookkeeping methods.

Cost deferrals. Generally accepted accounting principles. That sort of snooze-inducing thing.

But Auditor-General John Doyle exposed a reckless and systematic pattern of abuse, with real-world consequences for taxpayers and ratepayers alike.

The best way to illustrate the problem is to begin with a straightforward example taken from the report.

The Liberals projected that Hydro would end the 2010 financial year with a tidy profit, income to exceed spending by $400 million. Instead the government-owned utility spent significantly more than it earned, for a loss of $250 million.

Red ink by most reckonings but not with the Liberal fiscal wizards at the helm. For as Doyle tells it, they shifted almost $700 million in current-year expenses to a series of deferral accounts, in effect charging those costs to future years.

They thereby erased the loss and put Hydro into the black to the tune of $450 million, all through the magic of deferral accounts.

The practice, in Doyle’s pithy summation, “creates the appearance of profitability where none actually existed.” And there’s a lot of it going on.

When the Liberals came into office in 2001, they inherited one deferral account from the New Democrats, and it was employed mainly to even out unexpected fluctuations in revenues and expenses of the kind that might otherwise force a sudden spike in electricity rates.

But after winding up the NDP rate stabilization account in their first term, the Liberals got into the practice in a bigger way, spawning 27 separate accounts and boosting the total deferrals from $200 million to $2.2 billion.

All those deferrals — they cover everything from the cost of the smart meter program to the settlement of native land claims — are “undermining the credibility of the financial reporting of BC Hydro, one of B.C.’s most essential institutions,” according to Doyle.

His report details how the accounts create a completely mistaken impression about key aspects of Hydro finances, such as the amount of money on hand to reinvest in crumbling infrastructure or for servicing a burgeoning debt load.

The way things are going, Hydro will soon be into the realm of “negative equity,” undermining the whole notion that it is a “going concern” and self-supporting in financial terms.

If that were all the auditor-general had to say, there would be grounds enough for public concern.

But much of the report is given over to explaining how all these deferrals, by creating profits where none existed, allowed central government to siphon significant “dividends” from Hydro to improve its own financial picture.

The practice extends back to the NDP era as well and though the Liberals purported to deplore it when in Opposition, once in office they continued it.

Over the last dozen years some $3.2 billion has been drained out of Hydro’s accounts for the benefit of the central government, a number to keep in mind in light of the findings about the running tally of costs shifted to the deferral accounts.

The auditor-general says the $2.2 billion will grow to $5 billion by 2017, a pace that is, in his estimation, “unsustainable.”
The reason being that deferral is not forever. For all the pretexts that allow government to put off current expenses to future years, the accounts must eventually be squared up and every penny of spending offset by a penny of revenue.

The options to accomplish the latter are threefold, none politically palatable. Raise electricity rates well above current projected increases. Cut costs well beyond the current already ambitious efficiency drive. Or refinance Hydro with a one-time injection of cash from the provincial treasury, meaning at the expense of taxpayers.

The longer government delays doing one or the other, the more likely that future ratepayers will be asked to help pay for benefits that were actually enjoyed today. “Significant costs deferred today may be unfairly passed on to future ratepayers who receive little or no benefit,” says Doyle. “This concept is known as intergenerational inequity.”

Which brings me to the most disturbing aspect of the report, namely his discovery that the government had no credible, comprehensive plan to resolve these concerns.

“It is unclear how BC Hydro plans to recover the significant balance of deferred costs and over what period,” he wrote. “Government suggests that the balance will stop growing at about the $5-billion mark, although it does not indicate what needs to change in order to achieve this.”

Hence the independent financial watchdog’s first and foremost piece of advice to government: “Determine at the earliest opportunity how BC Hydro will recover the net deferred costs in its regulatory accounts.”

Not likely. Judging from all the guff about competing accounting treatments, the Liberals see Doyle’s recommendation as one more reckoning to be postponed, along with all those billions in costs socked away in the Hydro deferral accounts.

[email protected]

Read more: http://www.vancouversun.com/news/Opinio ... z1c5IxEfnt

[Urbane]

This latest BC Hydro story, the lingering questions about BC Rail, the HST fiasco, transferring "surplus" money from ICBC and transferring it to general revenue are all reasons to question the competence and honesty of the current government. They're all reasons which tell me not to vote for the Liberals. To some extent any government in as long as this one will have its issues but I think we've reached the point of no return with this government. I won't vote for the NDP but if I had to vote today I would vote for the Conservatives. Time for a change.

[flamingfingers]

Overstated Claims for Positive 2010 'Games Effect'

Latest tally of Olympics benefits requires skeptical eye for small print and spun numbers.
By Bob Mackin, Yesterday, TheTyee.ca

Like the 2011 Stanley Cup final, the PricewaterhouseCoopers Games Effect series of reports went the distance and left a confusing, frustrating legacy.

The seventh and last edition of the British Columbia and federal government-sponsored reports was published Oct. 27. It was not an exhaustive audit, but instead the underlying intention was to convince taxpayers that their investment in the 2010 Winter Olympics was worth it.

Initial estimates of a $10 billion bonanza trumpeted by Premier Gordon Campbell and Finance and Olympics Minister Colin Hansen never materialized.

PWC estimates a $2.3 billion gross domestic product impact for the 2003 to 2010 period. Impressive? Until you consider the real GDP in the Games year alone was $154 billion.

Tourism got a $228 million shot in the arm over the seven-year period, of which $139 million was for food, beverage and lodging, $33 million transportation and $18 million shopping.

What about the 'aversion effect'?

The report measures incremental impacts generated by federal government spending and investment from other out-of-province sources and offers a surprising revelation about the host province.

"In fact, much of the spending by B.C. residents during the Games was not truly incremental. A large portion would have otherwise been spent on other forms of entertainment or activities somewhere else in the province (e.g., ski resorts, museums, festivals, theatres)."

The $3.48 billion in incremental spending from 2003-2010 was led by construction ($1.26 billion), operations ($1.54 billion) and tourism ($230 million).

"The majority of the third-party spending (on construction) is due to the City of Vancouver assuming responsibility for funding and completing the Vancouver Olympic Village."

The report's timing is noteworthy. It was released just three days before Guadalajara's 2011 Pan American Games in Mexico conclude and the Pan Am flag is handed to Toronto. The federal government wants to get Ontario excited about the 2015 "Golden Horseshoe" Games. Which probably explains why the B.C. Finance Ministry wouldn't act on its own and disclose the cost of the PWC reports.

A key omission from the Oct. 27 report is the so-called aversion effect. Mega-events, according to the College of the Holy Cross in Worcester, Mass., cause host city residents to alter their consumption patterns and Games-time visitors tend to displace both locals and regular visitors.

As such, a May 2010 report by Holy Cross found the 2002 Salt Lake Winter Games "had a modest short-run impact on employment and no significant impact on total employment in the long run." That followed a November 2008 report that found hotels and restaurants in Utah gained $70.6 million, but general merchandise sales fell $167.4 million.

Five-ring chaos

PWC included a disclaimer that it "relied upon the completeness, accuracy and fair presentation of all the information, data, advice, opinion or representations" from public sources and the B.C. and Federal Olympic Secretariats." Which may explain some key errors of omission and commission.

Games Effect, page 24: "The Olympic and Paralympic medals were created using e-waste, including metal salvaged from televisions, circuit boards and monitors."

Reality: To read the report, you'd think VANOC and its sponsor Teck spun gold (silver and bronze, too) out of garbage. Medals actually contained just trace amounts of old computer parts and TVs: 1.52 per cent of each half-kilogram gold medal, bronze had 1.11 per cent of e-waste and silver medals had a .122 per cent sliver. Hidden in the Teck 2009 sustainability report is this gem of sustainable travel: "To maximize recycling efficiency, we sent some of our e-waste to Umicore facilities in Belgium in order for them to process our e-waste and provide us with metals that were then used in the Olympic medals."

Games Effect, page 125: "During the Games, VANOC and BC Hydro used a real-time online dashboard to track electrical energy consumption and carbon reductions achieved at Olympic sites. The Venue Energy Tracker was created by Vancouver-based Pulse Energy."

Reality: The dashboard didn't include the biggest, most-seen venue of them all. B.C. Place Stadium, site of the opening, closing and nightly medals ceremonies, ran for two months on Aggreko diesel generators that raised the ire of neighbours angry with the all-night noise and exhaust. VANOC eventually fashioned wooden mufflers. There was even a diesel spill one night in January 2010.

Games Effect, page 60: "The 2010 Winter Games enjoyed the most extensive coverage ever produced for the Winter Games reaching a record potential audience of 3.5 billion people worldwide. The Games were covered by 235 broadcasters and television stations in 220 territories."

Reality: The IOC's own July 2010-published Marketing Report said the potential audience reach was 3.8 billion but the actual estimated audience was 1.8 billion. That's almost half the inflated 3.5 billion estimate of viewers announced midway through the Games by marketing director Timo Lumme.

Games Effect, page 5: "Canadian athletes responded to the medal challenge by winning 14 gold, 7 silver and 5 bronze medals during the Olympic Games for a total of 26. With that success, Canada earned the distinction of winning more gold medals than any other country at a Winter Olympics."


Reality: The $110 million Own the Podium high-performance program pumped $97.55 million into Canadian sport from 2006 to 2010 with the goal of making Canada the overall medal champion with 35. Instead, the United States (37) and Germany (30) took home more medals. The lofty goal for the home team was largely forgotten after Canada won hockey gold in the final event of the Games.

Games Effect, page 37: "On the municipal level, the estimated economic impacts of the Metro Vancouver Commerce 2010 Business program's $168.8 million investment deals are estimated to be $306.2 million in total output and $156.2 million in GDP."

Reality: MVC's $168.8 million figure, coincidentally contained in an MVC-sponsored report by PWC, was widely discredited when released last February. The estimate relied heavily on a controversial, unverified claim that the taxpayer-funded Olympic hospitality program helped attract special effects-heavy Hollywood North-lensed blockbusters Thor, Tron: Legacy and Mission: Impossible 4. Only $22.4 million of the alleged windfall was actually for recurring expenses, like office rents and salaries. MVC has refused to publish the list of the 97 executives it plied with free Olympic tickets, dinners and drinks.

[Urbane]

LOL . . . The Tyee . . . Thanks for an objective source to discredit the Price Waterhouse report! While I certainly agree that the government's rhetoric should be taken with a grain of salt, ditto for the Tyee. Where benefits ended up being "only" so much one has to take the 2008 global financial meltdown into account and yet the government's estimates were simply wrong according to The Tyee. I have little doubt that there are valid points in the article but it's the old band wagon thing I've been talking about. Gordon Campbell and his government didn't do anything right. Period. That's just the way it is and we'll find figures to "prove" that every move the government made was precisely the wrong one. Loud generators that necessitated mufflers? Campbell's fault. He either chose the wrong generators or should have had mufflers on there sooner. These petty criticisms thrown into the mix only distort and detract from genuine ones.

The bottom line on the Olympics for me is that the Liberals did an excellent job and the event was a great success. If in fact the benefits have not been as good as predicted it could be faulty or predicting and/or the financial state of the world. And there was a tremendous amount of goodwill that was created due to the Olympics and it's hard to put a price tag on that. Most of us enjoyed watching the competitions and took pride in what the province and what this country accomplished. I know The Tyee wants us to frown, look like Adrian Dix, and take the position that it was all terrible because of Gordon Campbell's mismanagement but I won't get suckered into that.

[flamingfingers]

LOL . . . The Tyee . . . Thanks for an objective source to discredit the Price Waterhouse report! While I certainly agree that the government's rhetoric should be taken with a grain of salt, ditto for the Tyee. Where benefits ended up being "only" so much one has to take the 2008 global financial meltdown into account and yet the government's estimates were simply wrong according to The Tyee. I have little doubt that there are valid points in the article but it's the old band wagon thing I've been talking about. Gordon Campbell and his government didn't do anything right. Period. That's just the way it is and we'll find figures to "prove" that every move the government made was precisely the wrong one. Loud generators that necessitated mufflers? Campbell's fault. He either chose the wrong generators or should have had mufflers on there sooner. These petty criticisms thrown into the mix only distort and detract from genuine ones.

The bottom line on the Olympics for me is that the Liberals did an excellent job and the event was a great success. If in fact the benefits have not been as good as predicted it could be faulty or predicting and/or the financial state of the world. And there was a tremendous amount of goodwill that was created due to the Olympics and it's hard to put a price tag on that. Most of us enjoyed watching the competitions and took pride in what the province and what this country accomplished. I know The Tyee wants us to frown, look like Adrian Dix, and take the position that it was all terrible because of Gordon Campbell's mismanagement but I won't get suckered into that.

Oh, I see, as soon as you see that it was published in the 'Tyee' you get your blinders on. How about you look at WHO WROTE THE ARTICLE? His name is Bob Mackin:

Award-winning North Vancouver journalist Bob Mackin’s Olympic journey began in the fall of 1998 when he attended the news conference at BC Place Stadium announcing Vancouver's bid to become Canada’s candidate for the 2010 Winter Olympics. Almost twelve years later, he was among the last people to leave the stadium after the Games closed. He even donned a pair of red mittens to carry the Olympic torch in Edmonton. Bob spent ten years as a sports columnist with the Vancouver Courier and reported for six years for 24 Hours Vancouver and the Sun Media chain. He is the author of three books on baseball trivia and one on soccer.

Books
Goals and Dreams: A Celebration of Canadian Women's Soccer
978-0-88971-205-8 • 0-88971-205-0 • August 2005 • $14.95
The first book on Canada’s most popular sport for girls!

Red Mittens and Red Ink: The Real Story of the Vancouver Olympics
978-1-55017-535-6 • 1-55017-535-1 • October 2011 • $24.95

I think your myopic view of Bob Mackin as a "Tyee Hack" is pathetic.

[Urbane]

LOL flaming! I just had another look at some of Bob Mackin's opinion pieces and to suggest that he's an objective observer of politics in British Columbia is too funny for words. Of course he's entitled to his opinion but consider the source! He wrote an article about too much fuel being burned in the Olympic cauldron. Well, maybe we should have had a battery-operated cauldron but perhaps there would have been a bit of criticism about that too! Excerpt:

B.C. has plentiful natural gas reserves: there is an estimated 91 trillion cubic feet in the province's northeast. But an April-published Statistics Canada report said the average B.C. household powered by natural gas used 81 gigajoules in 2007.

"That's insane, a whole year's household usage in almost 12 hours," said Spencer Chandra Herbert, the NDP's B.C. Pavilion Corporation critic. "What was going through the (cauldron) designers' heads in terms of efficiency?"

Based on information provided, 24 hours estimates the cauldron would have burned 4,564 gigajoules over 25 days during the Olympics and Paralympics -- enough to power 56 houses for a year.

"We do contribute to a carbon offset program to compensate for the emissions that we generate with the cauldron," said Vancouver Convention Centre spokeswoman Jinny Wu.

All anyone has to do is go on to the Tyee site and read Macklin's many articles. It won't take most people very long to figure out his political bent. And again, nothing wrong with that as long as people realize that they're not getting an objective analysis anymore than they would from the government. But stay on your band wagon flaming . . . it's okay. It's human nature just to pick sides (only the OTHER team commits fouls and deserves penalties - we're the good guys!) but I'll stay off that band wagon. Thanks anyway.

[flamingfingers]

No problem Urbane.. Enjoy The Bill Good show.

[Urbane]

No problem Urbane.. Enjoy The Bill Good show.

Yes, I will, along with those who "have the mentality of housewives" as you so "eloquently" put it.