Toronto shouldn’t follow-up Pan Am Games with Olympics: expert

If Toronto is looking for a follow-up party to the Pan Am Games, the city should look at hosting the Commonwealth Games. That’s the advice from a business expert who has studied the economics of the Olympic Games.

“If you want to have a party, try hosting the Commonwealth Games. It’s a cheaper party,” says Tsur Somerville, a professor at the University of British Columbia’s Sauder School of Business. Affordability is all relative, he tells Yahoo Canada News.

Toronto and Ontario could, no doubt, find the resources to host the largest athletic competition in the world given the speculation last week about a possible 2024 Olympic bid.

“The question is whether that’s the best use of resources,” he says. “My advice to Toronto would be Toronto and Ontario have a whole bunch of things that they’re in debt on, that they need to spend money on that strike me as more important. I think I’d get my electrical and transport situation worked out first and then worry about the Olympics.”

Somerville says the Olympic Games build city spirit and inspire athletes — benefits that are hard to quantify. But there is no evidence of any economic benefit to hosting the Games, he says.

“If you have a city where you never do anything fun, it’s kind of a dull city. But this is a really, really expensive party and the people who really benefit from it is the IOC [International Olympic Committee].”

An impact study carried out for Vancouver and Whistler after they hosted the 2010 Games found much the same. The Vancouver 2010 Winter Olympics were the first required by the IOC to conduct impact studies, prior to and after the Games. The assessment by the University of British Columbia looked at the expected benefits and costs of hosting the Games. It found:

Pros:

Infrastructure — The Sea-to-Sky highway between Vancouver and Whistler received a much-needed upgrade. Vancouver finally got a rapid transit line linking the city to the Vancouver International Airport and the city saw a major expansion to its Vancouver Convention Centre. The 2013 impact study by the University of British Columbia found that for every $12 spent by the provincial and federal governments, city taxpayers spent just $1.

Facilities — While the Games in Vancouver and Whistler took advantage of several existing venues, both cities benefited from facilities constructed for the event, including the speed-skating oval and training rinks that now serve as community centres. The athlete’s village built in Whistler helped address a housing shortage for those working in the resort city.

Red Mitten Effect — The impact study noted a boost in national pride across the country that the authors attributed to the success of the Games.

Jobs — An estimated 38,530 to 51,510 jobs in B.C. were created or supported by the Games from 2003 to 2010 (21,690 jobs in the event year).

Tax Revenue — The full tally of tax revenues was not available but the study estimates that at least $50 million in income tax was generated from the Vancouver organizing committee staffing and $10-19 million in tax revenue from visitor spending during the Games.

Business — An estimated 1,500 new businesses were created in B.C. from 2003 to 2010 due to the Games.

Cons:

Cost — The impact study found that, all-in, the Games cost $7.8 billion — one of the best Olympic bargains in recent years. The public share of that was 62 per cent, or $4.8 billion.

Olympic Village — The developers went bankrupt after the Games and the City of Vancouver was left on the hook for $690 million in debt. The developer, Millennium Development Group, never did pay the $170 million it promised the city for the land. Last year Vancouver announced it had paid the debt off and recouped the funds plus some from condo sales.

Tourism — The impact study found visitors did not appear to stay longer or spend more money than usual in 2010.

Economic Boom — The impact study found there was insufficient data to determine whether the jobs and business generated by the Games were long-term; nor was there enough data to determine the balance between the financial benefit and the amount invested.

Carbon Footprint — From 2005 to 2010, energy consumption led to a cumulative total of 277,677 CO2 equivalent of greenhouse gas emissions, mostly during 2009-2010 and from transportation (87.5 per cent).

Reputation — The study found that the Games did not appear to influence either the Consumer Price Index or the real estate market (cost of homes) in the comparison cities and there was not enough data to determine whether they had an effect on the image of Vancouver.