Item - 2017.ED22.12

The Economic Development Committee:  

1. Received the report (May 29, 2017) from the General Manager, Economic Development and Culture, for information.

The Commonwealth Games is one of the world's premiere international sporting competitions, attended by more than 6,000 athletes and officials from the 70+ countries and territories of the Commonwealth of Nations. Held every four years, the Games are recognized for generating significant economic, cultural and community benefits for their host city. The Games are also a leader in access and equity for sport, as the first and only international event to fully integrate para-sports across its sporting program.

The 2022 Commonwealth Games were initially awarded to Durban, South Africa. However, in March 2017, the Commonwealth Games Federation (CGF) announced that Durban had lost the right to host the Games, citing serious financial concerns and questions about the city's ability to complete venue construction in time for the event. The CGF has since embarked on an expedited bidding process to name a replacement host city.

The Commonwealth Games Association of Canada, the national chapter of the CGF, responded to a call for expressions of interest from the CGF to explore the possibility of hosting the 2022 Games in Canada. Representatives of Australia, Malaysia and the United Kingdom have also indicated an interest in hosting the 2022 Games. The CGAC will now put forward candidate cities in Canada for consideration. Vancouver and Victoria are reported to be considering bids, and there is no limit to the number of cities that any one country can nominate. The CGF has asked that any prospective candidates declare their intention to bid by early July and submit a formal bid proposal by the end of August. The CGF hopes to name a host city by the end of the year.

Staff have reviewed the opportunity to bid on the 2022 Commonwealth Games using the evaluation criteria set out by the Mayor's Advisory Panel on International Hosting Opportunities. While hosting the Games has the potential to generate significant economic and tourism benefits for Toronto, staff are recommending that Toronto not pursue a bid at this time given the following major risks and constraints:

Lack of confirmed support from other orders of government: The Mayor's Advisory Panel is clear that the support of the federal and provincial governments must be confirmed before making a bid for a major event such as the Commonwealth Games. This approach mitigates financial, operational and reputational risks to the City. Given the scale and complexity of the Games, a multi-party cost-sharing agreement between all three orders of government similar to that used during the 2015 Pan Am / Parapan Am Games would need to be in place to successfully host the 2022 Games in Toronto. A senior order of government would also be required to provide a deficit guarantee for the Games. Per the Federal Policy for Hosting International Sport Events, the Government of Canada does not guarantee against operating losses, leaving the Province to act as the guarantor.
 

At this time, it is not clear that Toronto can secure the required financial and logistical support from other orders of government. While the federal government has indicated that it would consider a potential bid from a Canadian city, there has been no confirmation that either the federal or provincial governments would offer financial support, or that the Province of Ontario would provide a deficit guarantee for the Games. There is also a risk that a request for investment in the Commonwealth Games could come at the expense of funding for other City priorities such as transit and housing.

Lack of certainty on the availability of resources to host the Commonwealth Games: Costs to the host organization, net of revenues (ticket sales, sponsorship, etc.) would be expected to be very significant and therefore would require very significant subsidization. If the experiences of the Pan Am Games, the Glasgow Commonwealth Games and the expected experience of the upcoming Gold Coast Commonwealth Games are used, a substantial public sector operating subsidy will be needed to host the Games in Toronto, likely in the hundreds of millions of dollars. Any cost sharing arrangement involving all three orders of government will likely require a City contribution. No funding source currently exists for any meaningful amount of money from the City.

While there are many existing facilities in Toronto that could be used for the Commonwealth Games, capital investment could be required for athletes' housing and venue upgrades. The Pan Am Village has now been converted and passed on to the permanent residents. It may be possible to use university and college residences for temporary housing, but this is not clear. A new village could be part of a social housing project but the time to determine this is well beyond the few months needed to put in an official bid. Secondly, Toronto's existing track and field facilities could require capacity upgrades to meet the standards of the CGF. This may or may not be resolved within the timeline to submit a bid.
 

Lack of community engagement and consultation: The Mayor's Advisory Panel strongly recommends that the City meaningfully involve local residents in the bid process to determine whether the event opportunity provides sufficient benefits and legacies for the community. At this time, no consultation has taken place to gauge community or business support for hosting the 2022 Commonwealth Games. Given time constraints, the City cannot conduct meaningful outreach and engagement before a decision is required on whether to proceed with a bid.

Lack of resources and expedited timelines to bid: Normally, the bidding process for a major event such as the Commonwealth Games would take place over at least 1-2 years, allowing for a candidate city to complete full due diligence by assessing infrastructure requirements, identifying legacy opportunities, conducting a comprehensive cost-benefit analysis and consulting with community partners. While it is possible to complete a bid on an expedited timeline by the end of August, the City does not currently have any resources in place to do so and would incur significant unbudgeted costs for third-party support to complete the necessary work.