The aftermath of the 'Recession Olympics'

A boost to Vancouver?

The global recession has hampered many things a country can do; major construction projects are put on hold or cancelled, budgets are slashed and tourism can suffer, but what if you're hosting an Olympic Games?

This was the situation for Vancouver, who had the distinction of hosting the first Olympics Games in the wake of the most recent global recession (Beijing had all their stadiums and arenas built by the time the recession struck in 2008).

For the city, hosting the 2010 Winter Olympics Games cost around $6 billion (totals vary) and history had shown that for Canada, hosting the Games can either be a blessing or a curse. The country has seen its past host cities see millions in returns on its investment, as well as at a dead loss.

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Financial disasters

In 1976 when Montreal hosted the Summer Olympics, Canada found themselves with debts for 30 years after the Games finished. A year before the Games began, work had fallen far behind schedule and work was still progressing weeks before the opening date. Debt rocked up to a $1 billion and it wasn't until December 2006 that the cost of the "The Big O" - the Olympic Stadium (or the "The Big Owe" as it was dubbed by witty critics), was paid in full.

After the 1976 Montreal Games suffered such massive financial losses, in 1984 only Los Angeles and New York showed any interest of hosting the Games.

Luck wasn't on Canada's side in 1988, when Calgary hosted the Winter Olympics. At that time the country's economy was at its lowest, with oil exports being hit hard by the National Energy Program and the financial woes of the Montreal Games still in many people's minds.

However, Calgary turned what was the most expensive Winter Olympics at the time ($1 billion), into a financial success by securing unprecedented $430 million in television rights. By the end, the organisers had made $130 million profit.

As such, when it was announced that Vancouver would host the 2010 Games, questions were asked whether the city would be able to do so, especially after the fact that it took decades to pay off the Montreal Games. However through some canny fund-raising, Vancouver managed to raise $5.7 billion to put on the event... and the region is hoping to see the benefits.

Olympic mania

Over the past 17 days, several hundred thousand tourists have flocked to Vancouver will hotels bursting at full capacity and local shops and restaurants seeing excellent trade. Traditionally though, after an Olympics Games, the area see a "halo effect" as increased tourism and investment comes to the region.

One part of the Olympic site that could see a kick-back is the Olympic Village, which has been touted as being used for apartments after the games. However, as Vancouver city authorities sought emergency powers to borrow up to $400m to finish construction of the village, after private financing stalled due to worsening economic conditions, local people are going to wonder how they will get their taxes back from that loan.

However, the region has seen other benefits - a new convention centre, a $2 billion paid transit line connecting Vancouver to the airport as well as a major infrastructure upgrade. It was hoped that the Games would bring in over $10 billion in financial returns, but currently, with the debts and the recession, this target is looking to be closer to $2 billion, though it is far to early to tell what the long term benefits will be.

Still, thinking back to Montreal it could be worse...

Relevant articles:

Vancouver Olympic Village LEED Certified | US Banks lending falls at record pace | 2012 Olympics cost rises by £21m

Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

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