Ontario Premier Doug Ford just can’t resist a bad deal.
Ford put Ontario taxpayers on the hook for $10 billion in corporate welfare handouts to two of the world’s biggest and most profitable automakers.
He also committed Ontario taxpayers to spending billions to bail out the city of Toronto without conducting an audit of the city’s finances.
And now, Ford has bought into the FIFA World Cup soccer fiscal fiasco.
Ford announced last week he was committing Ontario taxpayers to pay up to $97 million toward the cost of Toronto hosting six World Cup games in 2026.
But do a quick look at the numbers and it’s clear Ford is making a bad investment.
When the city of Toronto was deciding whether to bid to host some World Cup games, city bureaucrats originally calculated it would result in $307 million in economic benefits.
Those benefits will largely go to local Toronto businesses, who could get additional tourism.
At the same time, Toronto bureaucrats initially estimated that hosting six FIFA games in 2026 will cost taxpayers at least $290 million.
That means if the cost of hosting the games goes even seven per cent over budget – which is a near certainty – the net economic benefits will be outweighed by the net economic costs.
The city has trotted out new numbers suggesting economic activity will surpass $307 million, but has yet to release any detailed analysis to explain how more economic activity will be generated than originally thought.
Either way, let’s remember it’s city businesses that will see the economic benefits while taxpayers will be the ones bearing the costs. Taxpayers paying for FIFA is just another form of corporate welfare.
It’s also important to note the increased economic activity will happen in Toronto while taxpayers across the province foot the bill.
The litany of costs placed on taxpayers’ shoulders is unfair when one examines who will benefit financially from FIFA.
Taxpayers are on the hook for paying the full cost of renovating BMO Field to ensure there are enough seats and amenities to reach FIFA’s hosting standards.
No less than 17,750 temporary seats will have to be added.
The city of Toronto signed a deal committing taxpayers to paying for all of the renovations at the Maple Leaf Sports and Entertainment owned BMO Field, while promising to share up to 50 per cent of the economic benefits with MLSE.
Toronto also committed to paying MLSE to compensate for any lost profits while BMO Field is closed for renovations.
That means taxpayers will be paying for both the renovations and any lost revenue during construction, but will share any profits from economic activity at BMO Field with MLSE. Profits will be shared 50-50 for the first $10 million and 60 per cent for the city and 40 per cent for MLSE beyond the first $10 million.
That’s a raw deal if there ever was one.
Then there’s FIFA. FIFA is forcing taxpayers to pay for these renovations to BMO Field, but intends to keep all the money from ticket sales. FIFA expects to make $15 billion (CAD) from the World Cup in 2026.
Once again, taxpayers will be forced to pay for most of the costs while another entity – in this case FIFA – keeps a large share of the benefits.
Finally, taxpayers should be concerned about Ford’s decision to commit taxpayer dollars to help finance Toronto’s World Cup bid when taxpayers can’t even see the terms of Toronto’s deal with FIFA.
Toronto signed a deal to host six games with FIFA behind closed doors. Taxpayers are not allowed to see the agreement because of non-disclosure agreements. It even took Mayor Olivia Chow months to get a look at the fine print.
The bottom line is that paying $51 million per game for a soccer tournament in Toronto is a mistake. The risks to taxpayers are too great and our politicians shouldn’t be falling over each other to throw cash at FIFA while leaving taxpayers vulnerable to soaring costs.
Politicians must either rip up the deal with FIFA to save taxpayers from what is sure to be spiraling costs or negotiate a better deal with FIFA and MLSE to limit taxpayers’ risk and get more bang for the taxpayer buck.
Jay Goldberg is the Ontario Director of the Canadian Taxpayers Federation
