It is quite well known to most in the industry that Vancouver has been undergoing a incredible construction boom. The Globe and Mail has reported that this construction boom has caused 40% inflation in construction costs since 2002 (when the budgeting for 2010 was done). This comes as no surprise to those familiar with the construction industry. A number of projects i am aware of have undergone huge redesigns due to higher than expected costs (especially steel construction). I have also heard of cases where there has been difficulty in finding contractors for the trades.

The Olympics people are saying that they are committed to keeping the budgets that the bid was based on. That has got to mean 40% less building than originally planned. That is not an insignificant cut. Exactly what this will mean for the facilities one can't tell yet, but I have fears that we will not get what we were promised. Of course the other option of having the province throw in millions of more dollars to cover the higher cost is not that attractive of an idea either.

The biggest boom currently is in residential construction. I'll bet that the Olympic money people are hoping for a rise in interest rates in the next year. I think that all it would take to put a huge damper on residential construction would be a 2-3 point rise in interest rates. Then we would be talking about all of the unemployed contractors who are thankful to be getting some work with the Olympic projects.