CalgaryNEXT, The Olympics, And A Political Perfect Storm

This week, the Calgary Flames will once again be the subject of spirited public debate. But for once this season, there won’t be discussion about the team’s slow start or their power-play. Instead, the proposal for the club’s prospective new home will be discussed at Calgary city council, with the discussion revolving around the next steps for the project going forward.

But while the near-future of CalgaryNEXT is debated this week, let’s take some time to think about the longer term – because how a new home for the Calgary Flames is going to actually unfold probably has as much to do about the bigger political picture as it does about the goings-on at City Hall.

There are four entities that need to be understood, at least on some level, when we think about what’s going to happen with CalgaryNEXT. Those entities are:

  • Calgary’s city council, headed by Mayor Naheed Nenshi
  • Alberta’s provincial government, headed by NDP Premier Rachel Notley
  • Canada’s federal government, headed by Liberal Prime Minister Justin Trudeau
  • The Canadian Olympic Committee, which determines which group will bid (if any do) for future Olympics

CITY COUNCIL

There are two key things to bear in mind about our local government. It’s headed by Naheed Nenshi, who was elected (in part) on a platform aiming towards modernizing Calgary’s transportation infrastructure (as well as other infrastructure pieces). The issue is that the city doesn’t have nearly as much money as they need to do what they want to do. For instance, they would love to build a amateur fieldhouse; the last proposal prior to CalgaryNEXT had it going on University of Calgary land. But they don’t have $200 million to build it.

The next municipal election is in October 2017 and most indications are that the mayor plans to run again.

THE PROVINCE

The New Democrats won a majority government in the last provincial election. Their big issue is that while they do have a fairly decent base of popularity in Edmonton, but they’re relatively unpopular in Calgary. (They won 19 of 19 seats in Edmonton and 15 of 25 seats in Calgary.) They also recently tabled a provincial budget with a fair amount of spending in it, pledging to address the province’s infrastructure deficit by spending to build stuff. (Aside: infrastructure projects are often built during slow economic times to take advantage of cheap labour and to create jobs.)

THE FEDS

The Liberals won a majority government in the last federal election. As with the provincial government, the Liberals face an issue in that they’re not overly popular in Western Canada. While the Liberals did capture 184 seats last month, only 4 of them were in Alberta (and just 12 in the three prairie provinces combined). They also pledged repeatedly during the federal campaign that they will run deficits over their first few years in office as they, too, throw money towards infrastructure projects across our fine country.

The new federal Minister of Sport is Carla Qualtrough, who was born in Calgary. Alberta is also home to the new federal Minister of Infrastructure, Amarjeet Sohi, who represents a riding in Edmonton.

THE OLYMPIC COMMITTEE

The Canadian Olympic Committee decides who gets to bid on the Olympics from Canada. Since the successful bid from Vancouver for the 2010 Winter Olympics (submitted to the International Olympic Committee in 2002 and awarded in 2003), Canada hasn’t really pursued an Olympics. One of the reasons is, especially for the winter games, bidding on the Olympics is expensive. While official numbers rarely emerge, typically numbers between $25 and $50 million are bandied about in terms of what bidding itself costs. And then if you win the games, you have to actually spend a ton more to build everything and host the games.

The closest thing to an Olympic bid that’s emerged recently was whispers of a Winter Olympics bid for Quebec City, though that horse has never really gotten out of the gates because Quebec City doesn’t have mountains nearby to the degree Vancouver or Calgary do. The Quebec City bid was oft-mentioned by former COC head Marcel Aubut, who’s from Quebec City and used to run the Quebec Nordiques. Aubut resigned recently amidst various controversies earlier this year and was replaced on an interim basis by Tricia Smith, who’s from British Columbia.

Presuming the IOC uses the same general timeline for the 2026 Olympic bidding as they did for the recent cycle of 2022 bids, notices of intent from various countries for those games will be due to the IOC in November 2017.

A PERFECT STORM

We’re about two years out from the IOC accepting notices of intent for 2026, the beginning of the bidding process.

Here’s how things sit right now.

  • The city likely wants to keep improving transit (and other) infrastructure given the mayor and others on council were elected on such a mandate – see the development of the Green Line LRT as an example – but don’t have a ton of money to do so.
  • The provincial government likely has two objectives: fulfill their election promise of improving infrastructure and they’d probably like to become more popular in Calgary so they can stay in power when the next election comes around (in Spring 2019).
  • The federal government, similarly, would likely want to spend on infrastructure projects throughout the country, but they probably also would like to build upon their majority and figure out a way to combat their electoral weakness in the West for when their next election comes around (in Fall 2019).

THINGS THAT MAKE YOU GO “HMMM…”

    The next municipal election is in October 2017, so the mayor and city council are up for re-election a month before submission of bid intentions to the IOC. Olympic bids are complex beasts in terms of funding, but they almost always involve injections of capital into the hosting city to modernize the infrastructure around various venues. Considering the stated intentions of both the new provincial and federal governments to spend on infrastructure, supporting an Olympic bid would fit within their publicly-stated election promises. In addition, politically, such spending would help them hedge their bets and shore up an area of electoral weakness for when they run for re-election.

    Would provincial and/or federal support be a bold-faced attempt for unpopular politicians to curry favour in Calgary (and Western Canada more broadly)? Definitely. But would it also serve the needs of Calgary’s mayor and council, Calgary’s business community, Calgary’s sports community, Calgary’s citizenry, and the unpopular provincial and federal governments? You betcha.

    I’m not saying it’s going to happen. I’m just saying that the timelines work and all the pieces seem to fit, so keep an eye on things as the various actors move around the political chessboard over the coming months.

    After all, who was Prime Minister of Canada when Calgary bid on their first Winter Olympics?

    Pierre Trudeau.

    Time is a flat circle.

    • Parallex

      This seems either overly optimistic or pessimistic (depending on where you stand on the issue).

      Yes, all three levels of government want to spend on infrastructure, but Nenshi has never been high on on public funding for arenas and neither Notley nor Trudeau strike me as the sort who would want to fund something where the primary beneficerary will be almost the definition of the 1%.

      Functionally it’ll come down to Mayor Nenshi. Cities will get some dough one way or the other, and the other layers of government want to support municipalities, so if Nenshi wants it then it’ll happen and if he doesn’t then it won’t.

      • ChinookArchYYC

        No offense, but that’s exactly what left leaning governments do. Pay lip service to taxpayers, while forking over loads of money to ill conceived projects “for the public good”. The old adage always run true when it comes to government funding business interests. Governments are not good at picking winners (meaning businesses), but loses are experts at picking governments.

        • ChinookArchYYC

          Kind of like the NDP wanting to build a Monorail between Calgary and Edmonton.

          I’m all for spending on infrastructure, but c’mon.. use your brains people.

    • slapshot444

      Interesting article. I agree with Parallex re Mayor Nenshi. He’s got to feel the city wants it. However I’m not sure if sports are really his thing. I get that feeling, but I could be wrong. If he wants to have a legacy project other than a C train line, the Olympics would be just the ticket. What it needs is someone to take up the cause and spearhead the project. Wouldn’t Ken King be perfect for this!! If not KK then another high profile Calgarian. Since Aubut got the boot from his Olympic responsibilities Quebec City doesn’t have its promoter. It’s also pre occupied with finding an NHL team.
      The timing is right, funding may be available and there is public support. Articles like this are perfect for starting a ground swell of support. The discussion needs to stay on the surface and a leader needs to step up.
      Calgary 2026 has a ring to it.

      • Parallex

        “He’s got to feel the city wants it.”

        Whoa, whao, whao let’s not go off and assign the whole city a position here. I mean… sure… in a broad sense the city “wants it” in the way that everybody wants everything until you ring up the bill sense. In the same sense I doubt that the city wants to spend over a billion dollars on this endeavor.

        Ultimately the aligning of governments with a pro-infrastructure mindset changes nothing because anyone who objects to public subsidy of professional sports will still object. It’s not like any additional funds that the city were to get wouldn’t get spent otherwise.

        If CS&E wants to get the yes then a good place to start is to propose a 65-35 ownership split on the facility (65% owned by CS&E, 35% owned by the city) The 35% representing the Fieldhouse component. If the City gets 65% of the facility as a revenue stream (in the form of property taxes) a lot of objections will start to melt away.

    • Hubcap1

      The most striking part of your article Pike is this statement:

      “The issue is that the city doesn’t have nearly as much money as they need to do what they want to do. For instance, they would love to build a amateur fieldhouse; the last proposal prior to CalgaryNEXT had it going on University of Calgary land. But THEY DON’T HAVE $200 MILLION TO BUILD IT.”

      The Flames organization want the city and others to spend money they don’t have on a project that would be way down on a list of priorities.

      • slapshot444

        “The Flames organization want the city and others to spend money they don’t have on a project that would be way down on a list of priorities.”

        Actually the Field house is a priority project for the city. It’s not “way down”
        as you claim.

    • Hubcap1

      I disagree that whether the Flames are allowed to build their facility on the public dime comes down to Nenshi. He only has one vote on City Council and has no other true executive powers. What it comes down to is public support. We can build all sorts of other infrastructure with that money besides buildings with a primary purpose of paying for Murray Edwards’ new Bentley.

      As for the Olympics, Rogers Place in Vancouver was built with private money and is privately owned and hosted Olympic hockey and other ice events. A cash machine for Calgary sports business is not a pre-condition to hosting the games.

    • Hubcap1

      “Academics have been saying for years that hosting the Olympics doesn’t make economic sense. The costs are typically larger than expected, the infrastructure needed for a big sporting event isn’t the same as the infrastructure needed for daily life, and the economic benefits are typically overstated.” – Victor Matheson (Economic Multipliers and Mega-Event Analysis, 2004)

      Having mentioned the above quote, Calgary does/will have most of the infrastructure already in place to make a strong bid.. but the economic benefits are still questionable.

      • slapshot444

        Although i agree with you re overstatement is certainly a sales tool used by promoters for all sorts of projects, the document you quoted, a 3.5 minute read if you actually look at it, is based on hosting a super bowl in Georgia. Nothing to do with the olympics let alone a winter ( vs. summer ) olympics.

        Calgary is in a unique position of historically turning a profit in 1988. Although now almost not repeatable due to security concerns. The economic benefits for the olympics vary wildly depending on a number of factors. My point being Matheson’s paper quoted above has absolutely nothing to do with calculating if they do or don’t affect this location in 2026.

        • ChinookArchYYC

          Let’s assume Calgary breaks down it’s costs as follows: $ 1 Billion for Security, $4.6 Billion for LRT green line,$1 Billion for Calgary Next project, and $1 Billion in Olympic facilities maintenance and upgrades.. at a minimum were looking at $7 Billion.

          Vancouver spent about $7 Billion and basically broke even.

          We can compare the two cities based on geography and demographics.

          It’s highly unlikely that they would make any profit.

          The only economic benefits I see is that we could increase our funding for new infrastructure projects already on the table.

          • The Last Big Bear

            I’m not saying your numbers are right or wrong.

            But if we assume they are correct…

            you wouldn’t consider it an economic benefit to get a new world-class arena, a billion dollars in new facilities and infrastructure upgrades, and the largest public transit project in decades, all mostly paid for by Olympic revenues?

            What I’m saying is that the we come out billions of dollars ahead if even half of that stuff gets paid for by Olympic revenues.

            • Parallex

              I’m saying that is the only economic benefit that I see, I agree, the time is good to get some additional funding for all these projects already in the works.

              I’m just making the point that, I really don’t see the city profiting off of it in any way.. but I’m not sure.

          • slapshot444

            All very true except one omission . Calgary and Alberta and Canada get to hold an olympics. Its not all about the almighty dollar. Don’t forget the province and Feds kick in money. Just braking even and then getting all the facilities would be a major victory.

    • Denscafon

      When CalgaryNEXT was first announced I was intrigued but I just don’t see this happening. This article mentions that all 3 levels of government want to go on a spending spree for infrastructure and that is true at least for the provincial and fed level, but not for stuff like sport complexes. To me, CalgaryNEXT is a financial disaster as it is and only an olympic bid will have it green lighted. I don’t even know if we even want to bid on the olympics as Boston who was chosen by the US olympic committee to bid declined the offer for very good reasons.

      In Calgary, the only thing I can see being supported by all 3 levels of government is the Green line expansion project as that at least is something that the public will use 100% of the time, not whatever King promises the field house can be used for.

      • slapshot444

        Dont confuse the summer and winter olympics. Completely different animals. The summer is almost unmanageable in terms of cost and security. The winter is about 1 /10 the size.

    • Mooseroni

      The Olympics should be avoided at all costs. Calgary made some money from them in 88 but I doubt that would still be the case as they have lost there honorary role in sports since then (see Russian scandal)
      Also, the Olympics were too recent to be hosted in Calgary again…Tokyo is getting them in 2020, last in 1964. 56 years. LA is 32 and 84. 52 years. Puts Calgary about 2040

    • Parallex

      Gotta be frank… I don’t see the a Olympics as anything but a sham play at sentiment on the part of the projects boosters. Vancouver wasn’t that long ago they’re not coming back anytime soon.

      Really I wish King would dispense with all the BS and directly engage the public in a more open forum. Or at least come up with a plan that isn’t a flowery “gimme money” at it’s core.