Should Toronto Host the Summer Olympics?

Background: Toronto’s past experience with hosting sport events and Olympic bids

Many people have predicted that Toronto will host the Summer Olympics. These predictions received a substantial boost in 2015, when the city successfully hosted the Pan Am Games. While the

Olympics are even bigger, and would require more investment and planning, their success with the Pan Am suggested that Toronto could be ready for the challenge of successfully hosting the

Summer Olympics. Several Canadian sports federations have backed the city as the best choice in Canada for the Games.

However, later in 2015, Toronto Mayor John Tory decided not to enter the city in the bidding process for the 2024 Summer Olympics. Because submitting a formal bid to host requires extensive

research, and because venues are chosen far in advance, Tory’s refusal essential shut the door on hosting in 2024. Tory cited the following reasons for declining to submit a bit for the city.

The cost to submit a formal bid to host the Olympics was estimated to be about $50 million dollars. Submitting a bid does guarantee that a city will win the right to host; it merely gives them an

opportunity to be considered.

Potential corporate sponsors had little enthusiasm in the games. Sponsors pay for advertising and marketing at the games. Since the 1980s, sponsorship has been an important source of

revenue both for the International Olympic Committee (IOC) and the city and surrounding communities that host the games. Without extensive sponsorship, the city would unlikely be able to pay

for their investment in the Olympics would not generate an overall profit.

Neither the Ontario provincial government nor the Canadian federal government would commit money to the bidding or construction process. That meant that the city of Toronto would be

responsible for all of these costs (CBC News, 2015; Kim, 2016).

And as Tory later told the media, “When it comes to bidding on major international events, we have to look seriously at the benefits they would hold for Toronto and weigh those against the very real

investments of time and money that would be required” (Kim, 2016). In 2018, history repeated itself, and Toronto once again turned down the opportunity to submit a bid for the 2028 Olympics.

However, many observers expect that Toronto will in the future enter a summer Olympic bid. If the city could find the money and political will, hosting the Summer Olympics in 2032 might be a

possibility for Toronto. And while Tory thought that it was not a good time for Toronto to host in 2024 or 2028, he has not ruled out a future bid.

City of Toronto Tourist information

For some of the questions below, you’ll need to know a bit about Toronto’s tourism sector. You can find information about that part of the city’s economy here under the Tourism Sector information

tab: https://www.toronto.ca/business-economy/industry-sector-support/tourism/.

Other important information about the Olympics

The games usually take place over 16 days, beginning in late July to early August.

Some events require a lot of space, specialized facilities, or both. The events in the current Summer Olympics include archery, swimming (long distance, short distance, and synchronized or

artistic), badminton, basketball, volleyball (both full court and beach volleyball), boxing, canoeing, cycling (both road and track), diving, equestrian (horse) riding and jumping, fencing, soccer,

golf, gymnastics, handball, field hockey, martial arts (judo and tae kwon do), rowing, rugby, sailing, shooting, table tennis, tennis, triathlon, water polo, weight lifting, and wrestling.

The cost of the 2016 Rio Olympic games in Brazil was estimated to be $13.2 billion US, while the 2012 London Olympics in England was estimated to be $14.3 billion US. Both of these Olympic

games ended up costing more than original estimates (Reuters, 2017)

Research and citation requirements for assignment 2

Any information that you use from our class content, the textbook, the “Going for the Gold” reading, or the information presented above does not need to be cited. These sources are background

information, and I will understand when you are taking ideas from these sources without credit.

However, if you take ideas or information from any other materials, those materials must be cited properly in APA style. Note that this assignment is designed so that you should not have to

consult outside sources. Instead, you’ll need to use close reading, application of ideas presented in our class content, and critical thinking.

Remember that the goal of this assignment is to show me that you can apply what you have learned in this class (sports economics) to a new situation (the Summer Olympics). That means you

will not find answers merely by looking things up on Google.

All information should be summarized or paraphrased in your own words. Copying or quoting is not an effective way to demonstrate your understanding of the ideas that have been presented in

our class content and readings.

Instructions for completing assignment 2

Number and answer each of the questions below separately (not as one long block of text) and in full sentences; do not copy the questions.

Each answer should be a short paragraph of 150-200 words, so your total assignment should be about 900-1200 words long. There is no penalty for exceeding the word limit as long as your

answers are well-written. If you fall under the word limit, it is likely that you have insufficient detail in your answer to earn full marks.

When answering the questions, be sure to give detailed explanations and be specific as possible. For example, if you gave an answer in question 1 like “construction costs,” you are

being too vague. Instead, describe something specific that needs to be constructed for the games. Similarly, giving an answer like “transportation” for question 2 would also be too general. Any

answers that are not specific will receive lower marks.

Each question is worth 3 points. An additional 2 points will be given for writing quality (clearly written, free of spelling and grammar mistakes, etc.) and for following the formatting guidelines, so

your assignment will be graded out of 20.

Assignment 2 Questions

Question 1 To prepare for the Olympics, host cities often have to spend a great deal of money. Besides the cost of bidding for the Olympics that was mentioned in the background information above,

describe three things that you think would cost $10 million dollars or more, and that Toronto (or the provincial or federal government) would have to pay for if they wanted to host the Summer

Olympics.

Question 2. Describe two economic activities or businesses that you could be affected by economic complements, multiplier effects, or importation. One of the examples you give should refer to the

information presented on Toronto’s Tourism Sector. For each of the two activities or businesses you choose, explain whether the benefits will be realized before the games, in the short term during

the games, or in long term after the games. (In some cases, there may be multiple benefits.)

Question 3. If the city Toronto up hosting the Summer Olympics, give two examples of economic activities or business in Toronto that could be affected by the crowding out effect, displacement

effect, and/or the substitution effect. For each of the examples, explain how you predict the hosting of the Summer Olympics would shift people’s spending. One of the examples you give should build

on, or refer to, information presented on Toronto’s Tourism Sector.

Question 4. Give an example of something that Toronto could build for the Summer Olympics that has a strong chance of becoming a white elephant for the city, and explain why.

Question 5. After reviewing the Toronto tourism information, evaluate whether Toronto will receive the benefits of the “hidden gem” effect like the cities of Barcelona and Salt Lake City. Explain why

or why not.

Question 6. Baade and Matheson suggest that governments could avoid the high costs of the Olympics by building a few permanent sites for the games. Cities would no longer bid to host the

games; instead, the games would rotate between these cities each year. Imagine that International Olympics Committee (IOC) has decided to create four permanent sites for the summer games,

which would mean each site would host the games once every 16 years. Should Toronto be considered a city for one of these permanent sites?

Describe three reasons that the IOC should consider before deciding if Toronto should be a host city. At least one reason should be in support of the IOC making Toronto a permanent site, and at

least one reason should be against the IOC making Toronto a permanent site.

Factors that the IOC would consider before choosing a site include the following. (This list is not meant to be comprehensive, but will give you some potential ideas to think about when you answer

this question):

Is there adequate infrastructure to support the influx of athletes and tourists, and to host all of the events that the Olympics require?

Is there enthusiasm and a desire for people to attend the games?

Is the political and economic support from the general population and the various levels of government (local, provincial, and federal)?

Are the games likely to make substantial revenues from hosting?

Can the games be made safe from both ordinary crime (like pickpocketing, assaults, etc.) and potential major problems (such as terrorism)?

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