The excitement is building, especially in two of Canada’s major cities, as the FIFA World Cup is only a couple of weeks away.
The country will host 13 matches of the tournament, six of them in Toronto.
But for political leaders, some data might be having a dampening effect on their excitement, including a report based on recent information the cost of hosting the games will surpass $1 billion.
Four years ago, then-mayor John Tory said the games would put Toronto on the map, bringing soccer fans from around the world, along with the money they would spend.
The original cost of the games to Canada was pegged at just over $500 million. Now, the Parliamentary Budget Officer estimates the price tag will be over $1 billion.
It’s estimated that about 300,000 soccer fans will descend on the city for the tournament. Bars, restaurants, airlines and hotels will be the big winners.
"As a businessperson being down by the stadium, of course, the buzz is already there," said Wayne Cowley, owner of The Bottom Line sports bar in Toronto. "We’re already booked solid for some of the matches. Usually for the summer we’re dead, so ... for something like this to come to the city, it’s going to be crazy."
Like Cowley’s bar, hundreds of others in Toronto say they are booked up for some of the games.
But the predicted costs of those matches to the various governments run to about $82 million per game. While that number might be sobering to some, there are experts who say they aren’t surprised.
"The majority of costs associated with hosting or putting on each of the games are essentially security, and we know that security costs have ramped up significantly over the last number of decades," said Pedro Antunes, chief economist at Signal 49 Research. "So it’s not that surprising."
While it is costly, Antunes said there are benefits.
"They seem reasonable at about $2 billion in economic, at what we call GDP, and what is GDP, it is essentially income generated from essentially wages get pushed up by the event," he said. "And profits for businesses that are operating and seeing some return from that event."
But not everyone agrees. Moshe Lander, a sports economist from Concordia University, pointed to what’s happening in Vancouver, the other host city.
"The mayor of Vancouver is bordering on criminal behavior, not criminal in the sense that he should go to prison, but criminal in the sense that he continues to double and triple and quadruple down by promising these benefits, that I have been saying for eight years, as an expert, are not going to happen," Lander said.
In the past most cities that have hosted FIFA matches, 12 out of 14, have lost money.
"The data has borne out over years, decades and geographies that these events very rarely, if ever, meet these projected revenues," said Tyeshia Redden, a professor of urban planning at the University of Toronto. "It’s a great vanity project. It’s a great way to push through some capital infrastructure, if you have projects like that in mind."
In the long run, it might not be about how much the games will cost. Here again, Moshe Lander.....
"I think the bigger problem is not whether a billion dollars is a lot of money or not, it’s what were taxpayers promised," Lander said. "And they were promised that it could cost substantially less than that. A billion dollars is certainly going to be less than the actual amount will be. Taxpayers should be upset because, especially in Vancouver, they were promised that this would be like 30 Super Bowls worth of economic value. You’d be foolish to pass up on such a thing. When it fails to materialize, it’s the disconnect between the promise and the reality that I think, is gonna make this way too expensive rather than just looking at the billion dollars and judging on that alone."
FIFA itself stands to be the big economic winner. Last December, its president, Gianni Infantino, billed the World Cup as the greatest event humanity has ever seen. The most recent projections from the organization is that it will make more than $13 billion from the four-year cycle that ends with this summer’s tournament — $9 billion of that this year.
