Fans gather to see Canada play Morocco at a watch party at Canada Soccer House in Vancouver on Saturday.Jennifer Gauthier/Reuters
With the last World Cup game on Canadian soil taking place Tuesday, Vancouver and Toronto deserve credit for throwing a world-class party. It’s been a great moment for the country, but like leaving a bar after a fun, boozy night with friends, Canadian taxpayers are wondering why they ended up paying the entire bill.
In terms of logistics, the cities have done well. Strong messaging to use public transit eased congestion, and transit service has been frequent and orderly. Stadiums in both cities have been packed with enthusiastic fans, and the FIFA Fan Festivals have been well executed, despite minor bumps owing to weather and crowding. The jubilation spread to watch parties and neighbourhood bars across the country. People normally indifferent to soccer were pleasantly surprised to be swept up in the energy.
However, the hosting of the World Cup was pitched to the public as more than just a fun party that didn’t cause logistical snafus – it was promoted as a huge economic benefit. Despite the entertainment value, a sobering reality needs to be addressed: the lopsided contracts Toronto and Vancouver signed with FIFA.
The Swiss organization gets the money from ticket sales, broadcasting rights and merchandise, while cities are stuck with the costs, including policing and stadium upgrades. The total cost from all levels of government is more than $1-billion.
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Meanwhile, the legacy benefits are slim, with FIFA contributing little. Upgrades to BMO Field (dubbed Toronto Stadium during the event) were paid for by the City of Toronto and Maple Leaf Sports & Entertainment. They consist of temporary seating as well as a few permanent additions, such as new video screens. Vancouver’s BC Place underwent accessibility and technology improvements paid for by the province. World Cup-linked programs in Toronto and B.C. will install mini soccer pitches in underserved neighbourhoods, but this could have happened anyways, given the funds came from local donors and the B.C. government.
FIFA justifies its sweet arrangement by saying the matches bring huge economic benefits to host cities. FIFA and Deloitte Canada claimed the World Cup would contribute a lofty $3.8-billion in economic output to Canada.
International travellers did come to see matches and had positive experiences, but early data show that hotel room occupancy in Toronto and Vancouver was down. Some regular travellers avoided the city owing to the complications, and there were fewer business meetings and conventions.
The B.C. government celebrated some esoteric economic gains, such as increased sales of nightclub drinks, soccer jerseys and patriotic tattoos, but it’s a stretch to think that the average Canadian drinking a few more beers and arriving at work bleary eyed the next day is an economic stimulus. Payment data from Moneris show that spending increases in Toronto have been modest. While the matches did promote Canada as a destination, any impact is diluted by virtue of having just two of 16 host cities.
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Officials need to be more skeptical when presented with rosy-eyed forecasts from organizations and businesses seeking subsidies. It can’t be assumed that every dollar spent at an event or new facility wouldn’t have been spent otherwise. Dollars shift around as people take up one activity instead of something they would have done otherwise. For example, during the World Cup, sports-oriented bars have done well, while those catering to the office crowd have seen less business as employees stayed home on match days.
City officials need to negotiate harder when it comes to big international events. The leadership under John Tory, Toronto’s mayor at the time, accepted FIFA’s standard agreement, rather than push for a better deal. Canadian cities should follow the lead of U.S. host cities, which relied on private money and corporate sponsorship instead of taxpayer funds.
The San Francisco Bay Area refused to allow public funds for FIFA’s required stadium upgrades, and added a US$6 ticket surcharge to generate revenue. This option would have been preferable over hiking hotel taxes. Toronto raised its hotel levy for 14 months, and Vancouver raised its levy for seven years to partially offset costs, but this serves as a deterrent for other potential visitors.
With better deal-making – and a willingness to walk away if a favourable deal isn’t struck – Canadians will be able to enjoy future festivities without a financial hangover.