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Pan Am 2015: Can Toronto rewrite the book on international games?

Pan Am 2015: Can Toronto rewrite the book on international games?

Posted by PanamericanWorld on February 24, 2014

The Winter Olympics held in Sochi, Russia have attracted no small amount of notoriety to go along with the headlines of athletic triumph. From the controversy surrounding Russia’s record on human rights during the lead-up to the games to the embarrassment of tainted hotel tap water in Sochi, the host nation has repeatedly found itself in a spotlight that it would certainly prefer to avoid. Perhaps the most lasting legacy to come out of Sochi, however, will be the astronomical cost of the games. At an estimated (and whopping) $50B, the 2014 Games are easily the most expensive Winter Olympics ever held, eclipsing Vancouver’s $7B tab for the 2010 Winter Games and far overrunning Vladimir Putin’s $12B projection.

Considering the dubious financial returns that come with investing in international games, and the European Bank for Reconstruction and Development’s prediction that, despite some gains at the local entrepreneurial level for Sochi, the Games will not measurably boost Russia’s economy, one must question the wisdom of pumping vast sums of money into a two-week sporting event, particularly in an economic climate like Russia’s where GDP growth is anemic at +1.3%.

International games are notorious money pits, placing the host country on the international stage and generating a considerable amount of national pride while running up extraordinary amounts of debt that must be dealt with in the aftermath. But does it have to be this way?

The question brings us to Toronto and the 2015 Pan American Games, which may be ready to prove an exception to the rule. Granted that the upcoming Pan Am Games, like their predecessors, will be an expensive venture for the taxpayer, some analysts foresee a major and more lasting economic stimulus for Toronto and Ontario. One CIBC report asserts that the Pan Am games will vault off of Toronto’s already robust economy to see infrastructure rehabilitated, buildings repurposed, jobs created and new facilities constructed. Furthermore, CIBC sees Toronto as having learned from the mistakes of Games past (the Vancouver Olympics, in particular) by bringing in more equity financing, mitigating risk and generally preparing for the games in a smarter, more sophisticated, forward-thinking way. Ontario and its largest city will have pulled off a major coup indeed if they can live up to some rather lofty expectations, namely 26,000 jobs created and $3.7B added to the province’s real GDP between 2009 and 2017.

This is all good news for Toronto, but considering that participation in the Games comes at no small expense to many of the emerging economies of the Americas, one can and probably should ask: what is Canada doing to assure a shared economic benefit? Does Canada even have any such obligation? The answer is yes, if you ask Toronto’s organizing committee. A cursory browsing of the Toronto 2015 website or the Toronto 2015 Bid Book reveals a number of promises to the greater Pan American region in the form of knowledge exchange, scholarship and training opportunities and internships.

And yet, as the Toronto Games continue to rack up corporate sponsors (Atos, CISCO, Chevrolet, to name a few) and money is injected into planning and facilities, it would appear that the most substantial energy and investment has been reserved for Canada.

With few exceptions, broad success in international games tends to be a reflection of economic muscle. Yes, there is something to be said for the national pride that comes with collecting dozens of medals, just as there is a case to be made for a wider spectrum of competition and an even playing field. As the world emerges from a recession of historic proportions, could it be that Canada is missing an opportunity to uplift the dispersed small economies of the region, many of which depend on the US and Canadian tourism dollars that have been in short supply since 2008? In countries with small populations, small economies, high crime rates and high unemployment, access to training and sporting facilities could have a pronounced positive societal impact.

The clock is ticking on Toronto 2015. In 2019, Peru (projecting a $4B economic boost), will take its turn in the Pan Am spotlight. We will continue to observe whether these nations succumb to the pitfalls that have tripped up Russia, adhere to the status quo of high debt and limited economic benefit, or create, as the Toronto 2015 website calls it, “a Games legacy of sustainable excellence.”

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