Tabulating Olympic costs tricky, but taxpayers still foot the bill: experts

"Whether you call it Olympic or infrastructure or transportation or health, I'm paying for it. So I want to know what the costs are."

British Columbia's auditor general, Arn van Iersel, issued an audit Thursday of the costs of the Olympics to B.C. taxpayers. He concluded the Games will cost Canadians $2.5 billion, with $1.5 billion of that being picked up by British Columbians.

That includes $775 million for an upgrade to the Sea to Sky highway between Vancouver and Whistler, and $8 million for the transit stop.

He also included a $41 million cost for expenses for the B.C. Olympic Secretariat, an entity established within the Ministry of Economic Development for, according to the website, "overseeing British Columbia's Olympic financial commitments and ensuring British Columbia's Olympic vision is achieved."

The provincial government's estimate of Olympics costs includes none of those.

Instead, Colin Hansen, the minister responsible for the Olympic file, insisted the auditor's report shows the province is on track to meet its $600 million budget.

"We obviously disagree," said Hansen.

So does the accounting community.

One of the fundamental principles of accounting is that it should be complete, said Rees. Without a complete statement, the picture could be misleading.

But the Sea to Sky highway has been accounted for, he noted. It appears in the current budget documents in the capital plan for the Ministry of Transportation.

"You can't count things twice," he said.

"If that work is being done and paid for by the Ministry of Transportation, then that's where the transactions are taking place, those are the guys writing the cheques, that's whose books the transaction should be recorded in."

Rees said it would be "nonsensical" to account for one transit stop in the Olympics budget, while the rest of the new rapid transit Canada Line is being accounted for in Transport's budget.

However, Rees said he doesn't disagree with van Iersel's attempt to provide a complete picture, even if some of the expenses are being booked in other ministries.

Mak said from Toronto that in the end, taxpayers have to foot the entire bill, "no matter which bucket you put it in."

"If you were to ask what's most transparent, if these roadways are being included as part of the Olympic initiative, then sure, there's an Olympic cost, regardless of the province saying they were going to do it anyways."

Mak said it's a longstanding question for management accountants: What does it really cost to make a widget.

Is it materials and direct labour to manufacture the widget alone, or does making it include the costs of marketing the product, renting the space, paying utilities?

He said organizers working on the bid to have the 2008 Summer Olympics held in Toronto had the same debate.

"In order to sell the Olympics to the public, the organizers' prerogative is to understate the expenses always."

Prof. Aidan Vining, of Simon Fraser University's business and government relations department, said in the past, underestimating has worked.

When the B.C. government sped up the process to build the Coquihalla Highway - connecting the Okanagan and the Lower Mainland - for Expo '86, the cost was never included in the Expo '86 budget.

The highway was notoriously overbudget. But Vining said the province has benefited by a safer, quicker way to get around the province.

He argued the costs to speed up the project should have been booked as Expo costs, but not the entire highway construction.

Same goes for building the Sea to Sky highway, he said.

"Nobody ever got caught on this at Expo '86. There were clearly increased costs because they sped it up, but we're still getting social benefits."

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