Toronto's BMO Field, which will be expanded to over 45,000 for the World Cup.
$380 million? That princely sum will apparently now be the cost of Toronto hosting six World Cup games in 2026. Which according to the City’s budget chief, is part of the good news accompanying the bump to six games from the originally allotted five. Yet if we rewind back to when Toronto first proposed hosting FIFA’s premier event in 2018, the estimated cost was pegged at $30 to 45 million. So how did we get here? And will it get worse (most likely, yes)?
In gross (but not percentage) terms, Toronto’s eight-fold World Cup overrun is pedestrian by mega-event standards. There are long documented cost overruns for many iterations of Olympics and World Cup. These budget busters can be best explained by concepts of “deception and delusion” outlined by Oxford project management guru Bent Flyvbjerg. Growth coalitions of key politicians and business leaders will push a mega-event for some combination of status and economic or tourism development. This pursuit will be accompanied by a blend of strategic cost misrepresentation until the point of no return has passed, or creating overly optimistic budgets that fail to properly plan for contingencies or market risks (such as rampant inflation).
If this sounds familiar to Ontarians, research also has found these phenomena of strategic misrepresentation and optimism bias extend to infrastructure mega-projects in general (Crosstown or Ottawa LRT, anyone?). Unfortunately, past precedent indicates that overruns will continue leading up to the event – the final bill will probably exceed $380 million.
Highlighting economic benefits, the City’s budget chief has outlined that Toronto will supposedly see a GDP boost of roughly $392 million. Even if economic impact figures for a sporting event are taken at face value (and a substantial collection of research indicates that severe scepticism is warranted), the barely 1:1 ratio of public spend to induced activity is anemic by economic development standards. Furthermore, tax revenues, which will not recoup public costs in any event, will overwhelmingly flow to senior governments not on FIFA’s hook.
It is also unclear whether the City projections are accounting for the crowding out effect, whereby other potential visitors during the city’s peak tourism season will be deterred by the World Cup. Similarly, are World Cup visitors merely bringing forward a trip to Toronto they were likely to make in the future anyway? We don’t know.
Alongside questionable claims of economic impact, the City is underlining “unquantifiable benefit” to putting Toronto “on a world stage.” But with 16 cities hosting across three countries, and no games beyond the round of 32, how much of the global spotlight will really shine on Toronto?
Yes, there is some intangible benefit to hosting sporting mega-events like the World Cup or Olympics. Look no further than the patriotic fervor of the Vancouver 2010 Olympics. Fortunately, contingent valuation survey research addresses what citizens in a certain place are willing to pay for the privilege of hosting a major event or sport venue. In most cases, the figure is well below $100 million.
And key decision makers likely know this on some intuitive level – the percentage of Torontonians willing to pay $30 to $45 million to host World Cup games is probably far higher than the share open to shelling out $380 million (or more). Thus, the incentive for event proponents is to minimize the public cost until it is too late to back out. And for Toronto, thanks in part to FIFA’s onerous host contract that the City feared publicly releasing, it is now well past too late.
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