Sprawlcast Ep 8: An Olympic Plebiscite Primer
Things to consider.
On Oct 31, Calgary city council got a last-minute funding deal to save the Olympic bid. In this half-hour episode of Sprawlcast, we take a close look at what that agreement means for Calgary's future.
A full transcript of the podcast is below.
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JEREMY: You're listening to Sprawlcast. My name is Jeremy Klaszus and I'm the founder and editor of The Sprawl, and Sprawlcast is a collaboration between The Sprawl and CJSW 90.9 FM. We are broadcasting from Calgary on Treaty 7 land. Sprawlcast is a show for Calgarians who want more than the daily news grind, and today we're going to go deep on a topic you might have heard something about: Calgary's Olympic bid.
COUNCILLOR DRUH FARRELL: Regardless of Olympics or no Olympics, we all love our city, and I think we need to start from that point. There's no monopoly on the love for our city.
COUNCILLOR JEFF DAVISON: A deal like this comes once in a generation, folks. I've always said I would support the plebiscite as long as we had the numbers that made sense.
COUNCILLOR EVAN WOOLLEY: I don't have confidence that the numbers are going to add up, and I don't know that Calgarians do too.
JEREMY: Those are a few voices from city council on October 31st – Halloween. It was a monster meeting that went all day, and what was at stake was whether or not to continue with work on the Olympic and Paralympic bid, including the plebiscite.
This was one of the most significant council meetings, probably in the last decade, and certainly one of the most well-attended council meetings.
And actually, I wasn't there. I was on an airplane, which kind of killed me, because I wanted to be there—but it's actually a good thing because I've been able to go back and listen very carefully to that meeting, and it really does deserve more than a sound-bite treatment.
The night everything changed
The day prior, on Tuesday, Council's Olympic committee had met, and the chair of that committee, Councillor Evan Woolley, had done up a set of recommendations to end all work on the bid because there was no funding agreement in place. Without that agreement, Woolley said, the committee would not be able to deliver on its mandate.
He said, "The clock has run out, and I think it's time we move on." This is what Council was going to vote on at the Wednesday meeting.
But then on Tuesday night, everything changed.
This was one of the most significant council meetings, probably, in the last decade.
Late at night on social media, BidCo announced a funding agreement signed by the province and the feds. There were some significant changes in this agreement. BidCo had always said: If we're going to do these Games, we need $3 billion in public funds. That was always the amount.
But in the plan they presented Tuesday night, they shaved nearly 10 percent off of that. The bulk of those savings was found in security and essential services.
Now, there are different ways of interpreting the numbers that BidCo put out, and we'll hear about that, but basically BidCo was saying: We have an agreement. Both the province and the feds have signed off on it. We don't need as much public money as we thought. The deal is a good one, and it's go time. Let's do this.
That brings us to Wednesday morning, and council finds itself in a bit of a strange spot.
They've got this new deal in front of them, but they're about to vote on killing the bid – including the plebiscite – and that vote is not a straightforward, normal council vote. It needs more than just a majority. Because it's a reconsideration of a previous council decision, it needs 10 votes.
For council, pressure was on
Right before the council meeting, there was a rally at city hall in support of the bid. You had Olympians, you had volunteers for Yes Calgary 2026, and you also had a bunch of the movers and shakers in Calgary. These are people with money, power, and influence who want to see the Olympics go forward.
And so for council, the pressure was on.
WOOLLEY: I always feel very fortunate to bump into George Brookman. This morning, I felt a little more unfortunate. [laughs]
JEREMY: This is Councillor Woolley, and he's talking about George Brookman, who's the CEO of West Canadian. George is also a former president of the Stampede and a former chairman of Tourism Calgary.
WOOLLEY: George gave me an earful: why we're not doing the Olympics, why we haven't built a new convention centre, and why we don't have a new arena, amongst a bunch of other things that I can't quite remember exactly in detail. And I told him: because we can't afford to do them all.
Today when city council votes, you stand to undermine a process… that all Canadians deserve.
JEREMY: Another big bid booster – say that three times fast – is Scott Hutcheson. He's a former competitive alpine skier, and he's a big property owner in town. He's the cofounder of Aspen Properties.
SCOTT HUTCHESON: I'm in specifically the commercial real estate business, so I'm a partner in a company that owns office buildings in downtown Calgary and downtown Edmonton.
JEREMY: And Scott is the board chair for BidCo, so he was in front of Council to support the new plan and answer questions. This is how he started the meeting.
HUTCHESON: Your worship and councillors: Today when city council votes, you stand to undermine a process – a three-year process; an expensive, taxpayer-funded process; a respected democratic process – that all Canadians deserve.
Some of you will say today there's still not enough information, and others will say we don't understand the financial deal well enough. But those are convenient excuses to undermine what has been a very thorough process.
Councillors, it was your job. You committed to secure a multiparty agreement, and to date you’ve failed to complete that work.
Councillors, it was your job. You committed to secure a multiparty agreement, and to date you've failed to complete that work.
The Calgary 2026 team and the hundreds of professionals and the many volunteers who have worked tirelessly to get to where we are today can walk away with their heads held high, knowing they fought hard for what would have been a life-changing legacy for this city. If the plebiscite is cancelled today by your vote, your legacy will be a much different one.
JEREMY: This start to the day didn't exactly go over well with some councillors. Here are councillors Jyoti Gondek and Peter Demong.
COUNCILLOR PETER DEMONG: You started off the conversation by accusing Council of undermining the process, by not coming to terms with an MPA [multi-party agreement], and I took offense to that.
COUNCILLOR JYOTI GONDEK: I would urge you to remember that we are a partner and we're not the enemy, so please don't treat us as such. We're also the only partner who is also tasked with ensuring that the other city-building work which would ultimately make or break a Games gets done well.
JEREMY: Hutcheson has since apologized to city council specifically for those comments.
What changed in the funding plan
Anyway, then BidCo jumped right into the new funding deal. Now before we get into this, I need to give you a little bit of background here. I don't want to bog you down with too many numbers, but this context is important.
So usually how these things work is all three governments – city, province, and federal government – will make an announcement together on funding and who's going to cover how much. But for this project, it's been happening piecemeal, and it's a little all over the place.
We’re not the enemy, so please don’t treat us as such.
The federal government had said that it would match the contributions from other levels of government, up to 50% of the total public-sector cost. So, in other words, to unlock $1.5 billion from the federal government, you needed $1.5 billion in contributions from the City and the province.
Last month, the province announced that it would do $700 million if the plebiscite got a yes result. And they were firm on that number. They weren't going to budge. So there was a gap of $800 million left for the city, and Mayor Naheed Nenshi said that was not a good deal. For the city to be paying more than the province—that won't work. And so what do you do?
This was the conundrum that city council and BidCo were stuck with.
MARY MORAN: We told you on September 11th that our budget estimate was $3 billion.
JEREMY: This is BidCo's CEO, Mary Moran.
MORAN: And we told you yesterday that we were able to finalize some of those numbers with our partners, including the RCMP and all levels of security, and have reduced the budget.
JEREMY: So they cut the housing plan by 1,000 units, reduced the security estimate, and dropped the public contribution down to $2.8 billion. We're almost done with this number stuff. Just bear with me a little longer
'Creative accounting' or brilliance?
Remember, the federal government matches what the City and the province put in, and the province has said they'll put in $700 million.
Now the City doesn't want to put in that much, so here's what BidCo does. They take $150 million for upgrades to Victoria Park – money that's already been approved by council – and they put that money in the Olympic budget. This'll do things like connect 17th Ave with Stampede Park.
So that's $150 million. Then they say: we're going to get $200 million worth of insurance coverage, and this insurance is for capital cost overruns, and we're going to put that $200 million into the Olympics budget as well.
These amounts basically act as credits to unlock federal matching dollars.
And what these amounts basically do is act as credits to unlock federal matching dollars.
And then the last part of that plan is that the City puts in $390 million.
MORAN: This is a total of $390 million in cash that we are asking the City of Calgary to contribute. It will result in $4.4 billion of investment coming into this community, not just to hold the Olympic and Paralympic Games – to create jobs for people that are unemployed today, increase our GDP growth, and to put our city and community on the global stage and build our reputation for years and years to come.
JEREMY: So you have $150M plus $200M plus $390M, which is $740M. Then you have $700M from the province, making it $1.4B. And the feds match that amount, bringing you to $2.8B.
Okay, I lied. One last number thing, very quickly.
Mary Moran there referred to $4.4 billion of investment coming into Calgary, and you've probably heard BidCo say that the benefits of the City's investment are 10 to 1. What they're referring to there is that the City puts in $390 million – round it up to $400 million – and the $4.4 billion she's talking about is investment from other levels of government, from the IOC, sponsorships, and whatnot.
But a bunch of that is just for running the Games. It's not an economic boost per se.
Where a new NHL arena fits in
In recent years, the IOC has enacted a series of reforms. It calls them Agenda 2020, and it's basically because cities don't want to bid on the Olympics anymore. Fewer and fewer cities are bidding, and so the IOC realized we need to do the Games differently. They can't be so grandiose and opulent and involve all these venues that only get used for a short amount of time.
Now, the challenge is that there has not been any Games yet with this Agenda 2020 in place, so it's a bit of a leap of faith.
MORAN: The IOC's guidelines to us is just to ensure that we are using 80 percent of existing venues, and so that's … We would do that anyway, because we have so many great venues here that are at end of life and need refurbishment, but we also want to keep costs to a minimum, so we're not adding a whole bunch of unnecessary infrastructure that is not required to deliver a 50-day event.
The challenge is that there has not been a Games yet with Agenda 2020 in place, so it’s a bit of a leap of faith.
JEREMY: There are two new venues in BidCo's plan. One is a fieldhouse, and one is a 5,000-seat arena. Now, it's very likely that that arena is just a placeholder.
This is where it gets tricky, because certain things are included in the Olympic budget, and certain things are intentionally excluded from it. We know the Calgary Flames want a new arena, and city council has an arena committee specifically to reengage with the Flames on this issue.
Councillor Jeff Davison leads that committee, and he was on 770 CHQR talking about this on November 5th. He was on the Morning News, and host Sue Deyell asked him how the Olympic bid and the arena might work together.
If we are awarded that bid, that’s when we’ll look at, obviously, how do we make both megaprojects… work together?
DAVISON: I mean, number one, Calgary's got to vote yes to the Olympics first. And then we have to win the bid. And so at that point, if we are awarded that bid, that's when we'll look at, obviously, how do we make both megaprojects, or both priorities, work together?
The reality is that until we know for sure that the Olympics is coming to Calgary, is that a conversation we need to get bogged into? Probably not.
'There aren't a whole lot of funds available'
JEREMY: The problem is, the city doesn't have enough money for all the projects that it wants to do, and the city is facing a big revenue problem. Property taxes that used to come in from downtown office buildings have collapsed due to the economic downturn and all the vacancies.
So at council on October 31st, Councillor Demong asked about the City's financial situation and how that $390M for the Olympics would affect other projects. He was asking Carla Male, the City's chief financial officer.
DEMONG: So $390 million, Ms. Male. To the best of your knowledge, does this restrict our ability to pursue other megaprojects?
CARLA MALE: Your Worship, there is only a limited amount of dollars that this organization has, and so in making choices, you're making choices not to do something as well.
DEMONG: Okay, thank you. I think that's about as concise as I can get.
There is only a limited amount of dollars that this organization has, and so in making choices, you’re making choices not to do something as well.
JEREMY: Councillor Woolley also had a question along the same lines.
WOOLLEY: Ms. Male, one of the challenges that we have, particularly when today we're asking questions and figuring out what we do with a $100M budget hole in the downtown and limited financial capacity, given that federal and provincial capital funding has dried up… we have a limited capacity.
Can you tell me what the capacity that we have today is?
MALE: Thank you for the question, Your Worship. What I would say is, we're in an interesting time.
We currently have a council-approved debt limit number, and that is a line on a page. It's a formula based on our tax-supported revenues. We are going through city charter negotiations. One of those things in the negotiations would be that that line goes away and that the city charter would require us to hold an investment-grade credit rating.
A little bit later today, I do have a presentation about material unfunded amounts, but what I can tell you is where we stand today. There aren't a whole lot of funds available to us. And so as we start to use some of the funds that are non-tax supported, the more projects that we layer on, the more tax-supported debt we would then place.
We have done an analysis – it's in the public presentation this afternoon – that tells us if we did take all of those projects on, not only would we be above our council debt limit, but we are fairly certain that our credit rating would fall.
JEREMY: The projects that Carla Male is talking about here include the Green Line, expanding the BMO Centre, the arena, and the Olympics.
So about that contingency
We're going to jump ahead quickly to council's Olympic committee meeting on November 6th.
At that meeting, Councillor Woolley brought up the issue of contingency. BidCo says there's $1.1 billion of contingency built into the budget. BidCo also says they're not worried about cost overruns due to this being a new kind of Games where you're reusing most of your venues.
So Councillor Woolley, who's been leading this file at city hall, brings up this contingency at committee. He's asking the question of Mary Conibear, who's with BidCo.
WOOLLEY: I just want to be clear about contingencies, because I’ve heard it over the last couple of days as if it's some pad that's in there for room. We were very, very diligent in terms of the costing out of this—that there is a super-escalation…
We know that the minute that a bid would be won, the city construction costs go up automatically right across the city. And so we were actually really diligent that it's not a pad. It's that we're going to see significant price escalation happen, and so when we talk about $1.1 billion, it was very thoughtful that that's not just money that's sitting in there just in case. It's money that we…
We know that the minute that a bid would be won, the city construction costs go up automatically right across the city.
When we undertake big billion-dollar projects in the city, we don't just come out with that contingency in cash and everybody says, "Wow, this is really great." We generally would use contingencies. Is that not the case? Particularly if your cost estimates are only at a Class 4, right?
MARY CONIBEAR: So we look at… There's two kinds of contingencies for us. So the in-project contingencies are more, I think, what you're talking about. As the design gets built, that is room to firm up the numbers, if you will. We have contingencies on top of that, which is the program. We have super-inflation contingency on top of that.
So it is not expected, or, I don't think, even realized if we overlaid the amount of contingency on this project on top of Vancouver's, they would have had a savings of tens of millions of dollars, so there is ample… And Vancouver went through a global economic crisis and an overheated construction market.
Woolley's surprise change of mind
JEREMY: Okay, we're going back to that October 31st Halloween council meeting. Now remember, council has in front of them recommendations to kill the bid, but it needs 10 votes to pass.
And what happened was a little strange. The majority of council voted to kill the bid right there. That vote was 8 to 7, but because it wasn't 10 votes, it wasn't enough.
Now I've got to say, I was surprised by what happened. Councillor Woolley has been one of the biggest boosters of the bid on council and he's voted consistently in favour of it, so I thought with this new deal on the table, he'd be on board with it, but that's not what happened.
If we overlaid the amount of contingency on this project on top of Vancouver’s, they would have had a savings of tens of millions of dollars.
We're going to listen now to what council members had to say about this new deal. We'll begin with Woolley.
WOOLLEY: Yesterday's decision and yesterday's council meeting was the most difficult in my five years in politics, and it was difficult in large part because we've worked so incredibly hard as a committee and as a council to move this project forward. And council has supported this project – not everybody, but time and time again, through all of these votes council has supported this.
I had always been okay with the risks. We always talked about them and we knew them. And okay with the changes.
I was struggled with moving… and we knew this was going to evolve over the coming years, but after we committed to this plan, it was a losing proposition to go in and gut – not "gut" – well, to drop numbers 10 percent on Calgarians.
And we did that after a provincial government solid, will-not-move commitment of $700 million, a federal government that would not move past the 50 percent, and an IOC who would not move – not a dime – last week when they told us that they would not move past that number.
And I became increasingly concerned. I have been very optimistic about this project and worked very hard on it, but when the provincial government …
I’m uncomfortable with the risks associated with the other orders of government not caring…
And actually, I want to touch on the principles of negotiation, that I'll go back to, that I've hung my hat on. You need to have shared interest, good communication, respect and trust as a foundation of a negotiation to move forward.
And when the provincial government dropped $700 million on us I was very surprised, because I always thought that a cost share agreement, we would all walk out together and to do that, and they stuck to their guns in wanting to do that.
And I became really worried about that, when that happened. All of the information – the promise that we made to Calgarians that all of the information to make an informed decision – we haven't been able to deliver on that, and that was a commitment that we made as a council.
I don't have confidence that the numbers are going to add up, and I don't know that Calgarians do too. We managed to cut $285 million after a provincial government and federal government would not move, and I think that we have the potential to find efficiencies throughout this process, but to have this happen at this juncture, I've found very difficult.
I'm uncomfortable with the risks associated with the other orders of government not caring that are guarantees. I can't support this moving forward, and that is unbelievably disappointing, and I can't tell you how many people have emailed me and called me in the last 12 hours expressing their deep disappointment in me. That's difficult.
For eight months, every two weeks the assessment committee met, and we walked out in front and said, "This is what we're going to do. This is what we're going to commit to." And we had to continually shift that line in the sand, and three or four days before advanced polling, when people have actually already voted, we're now saying: "This is the deal. How could you not communicate this… How can you not support this? This is the deal in front of us," and that's not fair to Calgarians because we promised them that we'd do that.
Just this year, we were again voted the best city in the western hemisphere to live in, and the fourth-best city to live in in the world. That didn't happen by accident, right? We've been doing an incredible job of running the city, of working together, of building community, and the Olympics had the opportunity to be that vision for me, but I just am not there.
And I don't think it's fair or right that we ask Calgarians to make an emotional decision and not a fact-based one. Thank you.
Other councillors weigh in, for and against
JEREMY: Here's Councillor Diane Colley-Urquhart.
COUNCILLOR DIANE COLLEY-URQUHART: We have had many meetings all summer, Councillor Woolley, and I remember when you were so proud of saying that when your son turns eight that maybe the Olympics will be here, and I'm somewhat anguished by your disappointment, because you and I have been joined at the hip for months and months and months in trying to move this to where it is today.
We'll move on.
I believe that we have upheld the foundations of negotiations. This is what it's all about. This isn't academia. This isn't the University of Calgary. [laughs] This isn't Harvard, Your Worship. This is the reality of politics, and I just love it. I really do.
I believe that we have upheld the foundations of negotiations.
The federal government sending 1.4-something billion our way, when we only get to keep eight cents of every loonie here in Calgary when people pay their taxes? Wow.
Thank you to the federal government. Thank you to Premier Notley for making this happen.
JEREMY: Here's Councillor Gian-Carlo Carra.
COUNCILLOR GIAN-CARLO CARRA: What I hear from the entrepreneurs who are selling our city and are creating opportunities to our future, is that the two biggest things are, they're able to sell Canadian citizenship. So when they bring talent here, it's a Canadian citizen. It's not a Calgary thing.
And when they go out to venture capitalists, they're having a hard time explaining where the hell they're from.
We have such a good story to tell, so we’ve got a great deal here. Let’s focus on the good stuff and let’s sell our story.
And the importance of the Olympics in terms of putting a spotlight onto our city for the next 10 years as we develop that next economy that will drive us into the future, every single one of those businesspeople are saying, "We need this spotlight."
And we have such a good story to tell, so we've got a great deal here. Let's focus on the good stuff and let's sell our story.
JEREMY: Here's Councillor Demong.
DEMONG: At heart, I'm a pragmatist: I look at what is realistic, what is wishful thinking, and what we can functionally do. What we have to realize is – what has been brought up on a number of occasions from our finance person – what are we giving up? What else are we not able to be doing?
Remember that these are non-city-owned facilities on non-city-owned land, by and large, that we are taking full responsibility for any and all cost overruns in their capital construction.
And if you look at a document that I've just been forwarded to, not one Olympics has gone through with capital costs that have not gone over budget, to my understanding – I’m not talking about the operational, but the capital costs on these mega-projects.
What we have to realize is… what are we giving up? What else are we not able to be doing?
Please remember that if we do this, it for most practical points will prevent us from building almost anything else – big or small – for the next four to eight years. Firstly, because it will be draining whatever cash we have; secondly, because any further conversation with the GoA will be straining their pocketbooks financially.
JEREMY: "GoA" is Government of Alberta. Now, Councillor Gondek.
GONDEK: We made a decision to empower Calgarians to have a say, and now we're looking at changing the game because we're not convinced of many things. Some people feel it's not a good deal, and I disagree with that. The deal is fine.
Some people feel that BidCo has hijacked the messaging and is pushing for a yes vote. No kidding. That's their mandate: to win a bid. They're called BidCo. They're not called Lose-the-Bid-Co.
I cannot go on with the charade that we have trust between partners involved in this deal.
GONDEK: Calgarians, I'm ready to abandon this process at this stage because I have no trust in the one partner that should see the value of this opportunity more than any of us. Councillor Chahal, you mentioned that this is about Canada. I totally agree with you.
I don't believe future interactions with that level of government will be any better than what we've seen to date.
I'm committed to delivering on a vision. As you have asked us, what's our other option? I will bring you one. I'm absolutely committed to that. One that brings us back to a solid economic state in this city, and I'm committed to doing this with the business sector and with Calgarians.
But I cannot go on with the charade that we have trust between partners involved in this deal.
JEREMY: Councillor Jeff Davison.
DAVISON: A deal like this comes once in a generation, folks. I've always said I would support the plebiscite as long as we had the numbers that made sense and that we could present those numbers to Calgarians.
Today we've seen the numbers, and they do make sense.
I'm confident that the information required for a plebiscite is now before us. I remind you that business deals are always fluid. However, today we've set the parameters in which a deal can be finalized – a deal that is in the best interest of Calgarians.
The Sutherland smackdown
JEREMY: Councillor Ward Sutherland is going to close us out.
COUNCILLOR WARD SUTHERLAND: I think one of the biggest challenges that I've had in five years – and I'm going to be very honest – is switching from a business mode to a political mode. And what I mean by politics is, it's this weird bubble that doesn't have consequences, where we can say anything we want, we're not held accountable, we say radical things – just happens.
And it's a bizarre thing. And what I look at today when I see people out front here, and especially the last week on the ugly emails that we all get, the divisive people within Calgary—it breaks my heart, because we used to be a can-do city, and we've turned into fear mongering.
We've turned into, as politicians, if you don't like something, I'm going to create [hyperbole] news, and because of the new world it becomes fact.
And we do a disservice to our citizens, regardless of what side, when we get on it.
It breaks my heart, because we used to be a can-do city, and we’ve turned into fearmongering.
I don't think I'll ever get over this in my career as a councillor. Sometimes I even want to take a shower because I'm ashamed. I'm ashamed of some things that were said on this council. I'm ashamed of some things that are said in the paper, and I'm going to point one out because I just can't let it go, and it's a fact. And I'm going to read it, because it was in the paper. So of course it's true if it's written in the paper, right? Thank you. So:
"City council has this misguided desire to chase adventure and glory," says Farkas, seeing the Olympics as "the ultimate politician vanity project."
"For city council, it's par for the course to ram things down the throats of Calgarians, but they don't expect Calgarians will have a breaking point."
That's quoted in the paper. [Rick Bell, Calgary Sun, Oct 29.] Well, I'm council. I've never said that. I represent my citizens just like every other councillor, and that's an insult. And it's degrading to politicians, and this is the new world we're in.
So I ask Calgarians, in the next little while – because you're going to have a few days and obviously we're going to have the poll – please make the effort to do the research. Whether you're for or against, stay out of the ugly conversations. Get off Twitter.
Talk to each other like the old world and have a conversation.
Try to get the right kind of information, and respect each other regardless of your position.
Whether you’re for or against, stay out of the ugly conversations. Get off Twitter. Talk to each other… and respect each other regardless of your position.
So I hope, out of anything I say today, that people will get that message, because this is not Calgary. This is not who we are.
Stand up. Be different. Thank you.
AUDIENCE: Hear, hear! [clapping]
JEREMY: You've been listening to Sprawlcast. This podcast is part of our Plebiscite Edition. Thanks for listening, and make sure to go vote on November 13th.
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