When Mayor Rob Ford decided not to enter Toronto into the running for the 2020 Olympics, many people were unsurprisingly disappointed. The disappointment was not just at the thought of missing out on a great party. Many politicians and activists believed that it would be a good excuse for the city to invest in infrastructure expansion. Or, to put it another way, they believed it would be a good way to convince senior levels of government to pay for infrastructure expansion. However, as we have learned from Montreal and Vancouver -- not to mention Greece -- the cost of hosting the games is immense.
One vocal proponent of a Toronto Olympic bid is former Winnipeg mayor and current Toronto Centre MPP Glen Murray. Winnipeg hosted the Pan American games during his tenure, and he believes that the city benefited from the experience. But there is a significant qualitative difference between hosting a major international event in a stagnant mid-sized city, and a gridlocked metropolis. The influx of expected visitors might not seem large when compared to the overall population, but they would put an enormous short term strain on the roads and transportation system. The city would also need to build facilities that would only be used at capacity for the duration of the games. This legacy spending, as well as a hope that the international attention will benefit tourism is typically the driving force behind support for Olympic bids. But while there are financial benefits, they are unlikely to outweigh the costs
To determine the conditions under which a city can run a successful Olympics, Torontonians should look to the two large North American cities that have recently run Olympic Games and did not lose money: Los Angeles and Atlanta. Vancouver can hardly be considered a success. The Olympics cost the province $925 million, and the city is on the hook for $700 million from the Olympic Village debacle. This does not include roughly $3.5 billion in infrastructure spending, and $1 billion dollars in security costs. Hopefully repaying those debts will take less than the 30 years it took Montreal to retire its Olympic debt.
Los Angeles succeeded because the games were privately funded (including venue construction), and the city shielded itself from financial liability. Atlanta followed a similar model, but was later criticized for over-commercializing the games. Given post-9/11 security concerns, it is questionable whether that model would even be viable. After all, $1 billion is a lot of advertising.
Murray does have a point, though. It is not fair that Calgary, Montreal, and Vancouver received large sums of money from the federal government to host the Olympics. It is part of a broader argument that urban taxpayers are getting a bad deal that happens to be true, but the solution is not to lobby for massive infusions of spending on non-essential infrastructure such as Olympic-quality pools and soccer stadiums. The solution is to empower municipalities to plan for and finance infrastructure projects themselves, rather than throwing elaborate parties to convince upper levels of government to build infrastructure they don't need.
Steve Lafleur is a policy analyst with the Frontier Centre for Public Policy. You can follow him on Twitter @Steve_Lafleur.