At the last Winter Olympics in Pyongyang, South Korea, Canada had her best showing ever, bringing home a record 29 medals. The national euphoria has bolstered Calgary’s potential bid to host, once again, the Olympic and Paralympic Winter Games in 2026.
A recent poll backs the sentiment: Canadians overwhelmingly support staging what would be the country’s fourth Olympic Games. With Norway out of the way, that leaves just five countries competing for the chance to be the host.
This is one race, however, Canada should hope to lose.
The economic benefits of hosting the Olympic Games are wildly exaggerated and many host countries end up stuck with crippling debt, ghost towns, and white elephants. Bid budgets for hosting the Olympics have missed the target so often it is hard to see them as anything other than well-crafted scams sold under the guise of patriotic pride.
The final price tag for the Winter Games in Pyongyang was nearly US$12.9 billion—double the initial estimate. The 2012 London games was initially projected to cost $6.5 billion and ended up costing almost $20 billion. The original $8.5 billion budget for the 2010 games in Sochi, Russia, ballooned to at least $50 billion—the most expensive in history.
As for the potential Calgary bid, a committee has pegged the cost of holding the games at $3.6 billion (CAN$4.6 billion). (The bidding process alone will cost $23 million.) City officials have promised to keep spending in check by reusing facilities from the 1988 Olympics, such as the Saddledome and the Oval.
But history is not on the side of bureaucrats. The first time Canada hosted an Olympic Games, Montreal in 1976, officials overspent their budget by a staggering 720 percent, according to a study by the University of Oxford. The previous Calgary Winter Games had a cost overrun of 65 percent.
It is not just Canada; every single Olympic Games for which data was available exploded its budget, without exception. The Olympics are so grossly miscalculated that the authors concluded that they “have the highest average cost overrun of any type of mega-project.”
This means politicians, contractors, and sports officials are deceiving taxpayers, who end up footing the real bill for years after the event—like the Montreal Olympic Stadium that was only repaid three decades later.
As for the alleged economic spillovers from tourism or infrastructure spending, a 2016 review of existing literature at the Journal of Economic Perspectives concluded that “in most cases the Olympics are a money-losing proposition for host cities; they result in positive net benefits only under very specific and unusual circumstances.” After years of research, the authors even wonder “why what looks like an increasingly poor investment decision on the part of cities still receives significant bidding interest.”
Another study that looked at long-term effects of 15 countries that hosted both winter and summer games found that whatever short-lived impacts there may be on GDP and unemployment “are more significant in those countries that host the summer Olympic Games.”
One sector that does make a killing thanks to the Olympics is big (crony) business. From Brazil to Russia, there are always well-connected firms all too glad to lend a helping hand with the event’s notoriously tight construction schedules—not to mention corruption inside the International Olympic Committee itself.
As a plebiscite over the Winter Games bid looms, Calgary residents should resist emotional appeals and reject yet another money sinkhole.
Daniel Duarte contributed to this article.