Updated

By Allan Dowd

VANCOUVER (Reuters) - Robert Bonner is not impressed that Vancouver is hosting the Winter Olympics and thinks the millions of dollars spent on the event would have better gone on alleviating problems like poverty and homelessness.

"Spending C$178 million ($166 million) for a skating oval isn't really impressive when you're sleeping in a doorway," Bonner told the "Poverty Olympics," a colorful protest on Sunday to highlight Vancouver's social problems.

Vancouver, on Canada's Pacific coast, has been ranked in surveys as one of the world's most "livable" cities but it is also home to one of Canada's poorest and most drug-infested neighborhoods -- the Downtown Eastside.

Sign-holding marchers chanted "Homes not Games" and other slogans as they made their way through the neighborhood to the rhythm of a small ragtag marching band and costumed mascots such as "Itchy the Bedbug" and "Chewy the Rat."

More than 200 attended the protest.

"Canada is a rich nation ... but you wouldn't know it in the Downtown Eastside," said Bonner, a well known activist in the community.

The Games (February 12-28) have a mostly privately funded budget of C$1.7 billion but the government has spent C$580 million on venue construction costs and budgeted C$900 million for security.

A provincial auditor's report in 2006 put the real cost to tax payers at C$2.5 billion but Olympic critics claim it is actually closer to C$6 billion -- figures that Games organizers and government officials dismiss as too high.

INCREASED HOMELESSNESS

Olympic critics say the Games have increased homelessness by fuelling gentrification in the Downtown Eastside, leaving the poor with few options in a city that already has some of Canada's least-affordable housing.

Poverty activists say homelessness in Vancouver has increased 373 percent since 2002 when the city bid for the Games but researchers say it is impossible to know if the event was actually responsible for displacing people.

Olympic supporters say hosting the Games has actually benefited the Downtown Eastside by promoting economic development and spurring job training programs to get residents involved in Olympic-related construction.

"We've been there and tried to help in every way we can. The Olympics are not designed to solve all of the problems of the world," Rusty Goepel, chairman of the Vancouver Organizing Committee (VANOC), told Reuters on Sunday.

Poverty activists acknowledge too that the Olympics has also given them a stage to publicize their complaints of government inaction to the international media that has descended on Vancouver for the Games.

(Editing by Jon Bramley)