No way to gild a golden economy: Economists say B.C.'s boom means the Olympics won't provide much of a financial boost
PATRICK BRETHOUR
Globe and Mail

VANCOUVER — The 2010 Winter Games don't start for another two years, but Chris Gardner already has his Olympic gold - in the unlikely form of manufactured steel buildings.
Mr. Gardner and his company, Britco Structures, have won a $32-million contract to build a lodge and townhouse complex in Whistler for the Winter Games, a success that will send the rapidly growing company on yet another hiring spree.
The lure is not just the contract, lucrative as that may be. The real payoff for Britco will come from the ability to tout its Olympic performance, meeting the tight, unforgiving deadlines of the march to 2010. And it won't hurt that its two projects, a 100-room lodge and a 20-unit townhouse complex, will be in the background as the world watches the Games.
"Our facility is going to be in all those shots, all those photos," says Mr. Gardner, director of strategic planning and corporate development at Britco. "We're looking at this as a tremendous opportunity to market a B.C.-based company."
But first the company has to find new workers to manufacture and assemble those buildings; the new business means it will be expanding by 25 per cent. Britco will be on the hunt for help across British Columbia: in Langley, where the company has its headquarters; in Whistler, where it needs construction workers to assemble the buildings; in the Fraser Valley's eastern reaches, where it has a manufacturing facility in Agassiz; and in Penticton in the B.C. Interior, where it has a second manufacturing operation.
The work force at the Penticton site has already tripled in size, so Mr. Gardner is all too familiar with the increasingly severe shortage of labour in B.C. The skilled tradespeople that Britco needs to put up its buildings are in short supply, a consequence of the construction boom reverberating across the province. But with the unemployment rate hovering at an all-time low, B.C. is running short of workers of all sorts. "You see the Help Wanted signs everywhere," Mr. Gardner says.
He knows it won't be easy to find the workers needed for the planned expansion - but he's confident Britco will succeed, and cash in on its Olympic contract, before and after the Games.
"For us, it's a once-in-a-lifetime project," he says.
Britco's ambitions are the standard-issue Olympic dreams in B.C., where the entire province is focused on turning the two-week sporting extravaganza into an enduring economic benefit. But those hopes are coming face to face with the reality of the B.C. economy. Like neighbouring Alberta, B.C. has an unemployment rate lower than what economists believed - at least until very recently - to be possible over the long term.
And super-low unemployment means that, to an extent, any big new initiative such as the Olympics will be diverting workers from existing jobs.
Economists call this crowding out, but another way to look at it is the teeter-totter economy: For something to rise, something else must go down. Concrete used to build the Sea to Sky highway isn't being poured as the foundation of a new office tower. Carpenters who might be renovating homes are building ski jumps instead. And, if the 2010 Games hold true to earlier Olympics, B.C. tourist attractions will find that some of their business ends up flowing into Olympic venues instead.
Despite the glitz and glamour, economists don't believe the Olympics will fundamentally reshape the B.C. economy, which would chug along quite nicely without the 2010 Games. "The overall structure of the economy would not be much different," says Ken Peacock, director of economic research of the Business Council of British Columbia.
Just three blocks away from the rapidly growing Britco's Penticton operations, Greyback Construction Ltd. faces a much different outlook. The 25-year-old construction company doesn't have any direct connection to the Olympics, but it is feeling the pinch from the constricted labour market. It is experiencing the downward swing of the teeter-totter economy.
Greyback has all the work it can handle, and more, from construction jobs throughout the B.C. Interior. The construction sector is sizzling, yet Greyback is turning away work. The reason for this paradox: The company can't find the skilled workers it needs to take on a larger volume of jobs. "If we could get them, we'd go get more work, 'cause there's lots of work," says Larry Kenyon, Greyback's president.
He could always hire staff from competitors, but he has made a deliberate decision not to snatch workers from rival firms. Mr. Kenyon doesn't cite economic theory as his motivation - just the gut conviction that, once he starts luring employees from other firms, his own staff will be targeted. But his hunch aligns perfectly with what economic theory has to say about the state of the labour market in B.C., where full employment means that recruiting employees is a full-time headache.
In part because of the fact of full employment in B.C., the most recent study of the economic effect of the 2010 Games found only a limited impact. British Columbia's gross domestic product is projected to be $186.6-billion in 2016, about 5 per cent more than the $179.4-billion size of the economy if there were no Olympics, according to the study by the Urban Futures Institute in Vancouver prepared for the Canada Mortgage and Housing Corporation. And the Olympic effect will largely dissipate by 2016, according to Urban Futures, with the economic growth rate snapping back to what it would have been if the Vancouver Games had never existed.
Still, the expectation remains that the Olympics will deliver a long-term boost to British Columbia. That is certainly the hope of Delta Hotels, which doesn't foresee any great profit windfall from its direct Olympic business, in part because of a deal struck within the industry to limit the price official Olympic visitors pay for rooms in 2010.
But Gordon Johnson, regional vice-president for Delta in the province, says there is a hidden cost to that Olympic business: Other travellers will stay away from Vancouver during the time of the Games. It's an open question for Mr. Johnson as to whether Delta will be better off financially from the Games being held in B.C., at least in the short term.
"This one is so up in the air. We just don't know what business will choose to stay away from Vancouver in February," he says, noting that the arrangements with the Vancouver organizing committee leave the hotel industry with little scope to book other major events during the Games. "My instincts are that it will be a wash."
But he, like much of B.C., remains optimistic that a little of the Olympic glitter will rub off during the span of the Games, boosting the province's profile - leaving Delta to welcome tourists back long after the roar of the crowd has faded. "There are an awful lot of people in this globe," he says, "who have never been to Vancouver."