In short, the bid was saved by insurance and a stroke of brilliance by desperate Calgary 2026 believers determined to not waste two years of hard work and allow a $4.4-billion injection into the local economy to go up in flames.
It was the evening of Monday, Oct. 29, and the City of Calgary and the province of Alberta could not fill a $200-million gap of public money needed to get a resulting match from Sport Canada.
The province stayed firm on only promising $700 million toward the Games. It is proposed Calgary would put forward $370 million.
When asked Tuesday night during a meeting of the 2026 Winter Games assessment committee at city hall, Mary Conibear of Calgary 2026 said it was the bid committee that came up with the idea of using insurance to leverage more money out of the feds in five days of intensive negotiations between all levels of government and the bid corporation.
Under the proposal, the city would spend $20 million more on capital cost overrun insurance to get $200 million of insurance money and the federal government promised to match those funds at the $200 million level. The city puts in $20 million to buy insurance and the feds pay $200 million. It’s a sweet deal for Calgary and Alberta.
As Mayor Naheed Nenshi explained: “The federal government had said, ‘we will go up to $1.435 billion but you’ve got to find a way to match (the funds)’ and the issue was we didn’t have the matching funds so this whole idea of insurance . . . was actually pretty brilliant, which found a way for the city to stay within its mandate to get a much greater match from the federal government.”
Sport Canada will fund up to 50 per cent of any public money used for a large multi-sport event. This is a way for Albertans to get some of their money back.
Tuesday night, Nenshi explained further that “it really was a joint creation of the city, BidCo and the feds. To their credit, the federal public servants really understood our problem and tried to solve it with us. I just wish we had done it in June.”
That, of course, would have been ideal, considering that Calgarians started voting in advance polls on Tuesday, which continues on Wednesday prior to plebiscite day on Nov. 13.
Tuesday night, Calgary 2026 CFO Drew Fitch presented the committee with a report on how cost overrun insurance will work.
AON, the world’s second-largest insurance broker and also the City of Calgary’s insurance broker, said obtaining insurance for Calgary’s Olympic insurance capital plan was “manageable” and that “everyone has been down this road in every North American bid.”
Here’s how it will work. Each project will be individually insured, including the 11 renewed venues, two new venues (field house and mid-sized arena) and housing for the Olympic Village (that will be converted into affordable housing after the Games, should Calgary win the bid.)
With a $20-million insurance policy, Calgary will be covered for $200 million in capital cost overruns caused by wage increases, weather-related delays and other unforeseen issues, but the insurance will not cover price hikes caused by changing the scope of the project or overruns caused by contractors (hence the need for guaranteed maximum price contracts).
The deductible would be 10 per cent of any specific project cost, so a $5-million project will cost $500,000 as a deductible, should a claim be made.
The bonus here is that the federal government will match not the $20-million outlay by the city for the insurance premium, but for the whole $200 million — a $180-million gain for Calgary.
This insurance plan is over and above $1.1 billion of contingencies built into the bid.
Scott Hutcheson, Calgary 2026’s board chair — which is a volunteer position — addressed the council committee only briefly, as he had to drive to Canmore for its vote later Tuesday night on whether to be involved in the Olympic bid. Canmore’s town council bid 6-1 in favour of supporting the bid.
After apologizing for being rude during questioning by some councillors last week, Hutcheson said: “My hope is that whatever the final outcome of next week’s plebiscite is, that we can look forward to working together in the future in the common pursuit that I know we all share passionately, and that is to build our community and make it the best we can for our children and our children’s children.”
The best insurance policy toward that aim is winning this Olympic bid.
Source: Calgary Herald