POLITICS

Pan Am Games are on time and on budget, Ontario Liberals say

01/12/2012 11:13 EST | Updated 03/13/2012 05:12 EDT
TORONTO - Ontario's governing Liberals insist preparations for the 2015 Pan American Games are moving ahead on time and on budget, despite warnings that the cash-strapped province is plunging into a money pit.

The minister responsible for the Games, Charles Sousa, said the massive $1.4-billion project will proceed even though the province is trying to tighten its belt to slay a $16-billion deficit.

"It's absolutely going ahead," he said Thursday during a groundbreaking event for the athletes' village near Toronto's waterfront.

"This is an investment because some of the monies that is going into this project is there for the long-term and is going to have payback. There's going to be returns on that investment over time."

Construction of the athletes' village near Toronto's waterfront — which is separate from the $1.4-billion Games budget — is currently underway and, unlike Vancouver's Olympic village, remains on budget, he said.

"What is different than some of the other villages and other projects that have been in the past, we already have the buyout and the payout at the tail end," Sousa said.

"So we've negotiated and secured those positions. ... The question is, making sure it gets done on time, because we know it's going to be done on budget."

The TO2015 Organizing Committee, which is responsible for planning and managing the Games, has only spent 2.7 per cent of its budget so far, he added.

Once the two-week Games are over, the village will be converted into an area that will include rental housing, a student residence for Toronto's George Brown College and a 7,600-square-metre YMCA recreation centre.

Dundee Kilmer Developments LP has a $514-million contract to build the village and received its first instalment of $21 million in December.

The province will pay a second instalment of $100 million in April 2013 and another $393 million once the project "achieves substantial completion." The final payment also covers the cost of removing temporary facilities and converting the village after the Games.

The province said it will recover about $65 million in development costs from future facility operators and Dundee Kilmer will develop additional blocks of market housing.

All three levels of government involved say the project is accelerating the pace of reclaiming the West Don Lands, a 32-hectare former industrial zone.

The athletes' village is being billed by the province as the largest construction project of the Games and a big economic driver that will create 5,200 direct and indirect jobs.

But there's a growing chorus of critics who argue that the costs of the Games — funded by the province, the federal government, municipalities and other partners — will spiral out of control.

Former Olympian Paul Henderson — who led Toronto's failed bid for the 1996 Summer Games — has argued the cost of the event could far exceed its budget, a charge Sousa is denying.

Ontario would bear the brunt of any cost overruns, as it has committed to being the Games' deficit guarantor.

Committee CEO Ian Troop has also shot down reports that as many as a quarter of the venues, which will be spread across the Golden Horseshoe area that surrounds the city, haven't been nailed down.

Progressive Conservative Leader Tim Hudak said he has no confidence that the Liberals will keep costs under control.

"I'm very worried already about overruns on costs at the Pan Am Games, and a minister who just seems to shrug them off," he said.

"They haven't brought a budget in on time, on the money in anything else they do. Why would we expect it for the Pan Am Games?"

Massive cost overruns for huge sporting events — such as the 1976 Montreal Olympics — often haunt governments for years, said NDP critic Paul Miller.

"I would prefer to see a monthly report — monthly updates — of where the costs are and any unforeseen circumstances that may crop up that they'll have to deal with, and how are they going to financially deal with it when it happens," he said.