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Calgary 2026 Olympics will require $2.4 billion in funding: committee

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Kenneth Chan Jun 19, 2017 7:11 am 916

A second Calgary Olympic Winter Games held in 2026 could cost $4.6 billion, according to the latest estimate by the organization studying the feasibility of hosting the quadrennial international multi-sports competition.

In a release today, the Calgary Bid Exploration Committee (CBEC) says revenue generated by the operations of the Games such as sponsorship and ticket sales is estimated at $2.2 billion while another $2.4 billion will be required from other sources – most likely from levels of government.

“I am confident when I say that the Board and staff at CBEC have diligently reviewed all aspects of bidding and hosting a prospective 2026 Games, and the numbers we are sharing today accurately represent the current situation,” said Rick Hanson, CBEC Chair, in a statement.

Expenditures

There are two aspects to an Olympic host city budget: an operational budget and an expenditure budget.

Operational costs relate to aspects such as labour costs the organizing committee, Opening and Closing Ceremonies, running the sports events and media facilities, Games-time transportation costs, athlete services, and outfitting and servicing the Olympic Village buildings. These operational costs totalled $1.9 billion for Vancouver 2010.

Security is also an operational cost, but it is not part of the organizing committee budget. During the 2010 Games, a $900-million security budget was split between the federal and BC governments.

Capital costs involve the construction and renovation of new sports and media facilities as well as the construction of the Olympic Village.

CBEC says it is able to make sizeable savings by reusing and renovating some facilities used for the 1988 Games.

The committee says its budget is artificially inflated on purpose as it includes a $450-million contingency fund, including $235 million for operational costs, and $135 million for a post-Games legacy fund to ensure venues are properly maintained and do not deteriorate into ‘white elephants’.

“One of the things we identified from looking at some prior Olympic Games was the failure to account for post-Games operation and maintenance of facilities in their budgets,” said Hanson.

“While this adds cost, our Board felt it was a necessary addition to a prospective budget.”

A similar legacy fund was put in place for both the 1988 and 2010 Games venues.

Revenues

Currently, operating costs are estimated to exceed operating revenues by $425 million, with operational costs being the largest aspect of the budget.

For operating revenues, it anticipates $700 million from the International Olympic Committee’s The Olympic Partner international sponsorship program, which currently includes sponsors like Coca Cola, Panasonic, Omega, and P&G.

Another $820 million could be raised from domestic sponsorships. In contrast, VANOC successfully raised $760 million from domestic sponsorship during the recession period leading up to Vancouver 2010, and its largest sponsor was Bell bringing in a $200-million contribution.

Revenue from tickets for both the Olympics and Paralympics events might generate $320 million.

Economic impact

According to joint research conducted by the Conference Board of Canada and Deloitte LLP, the economic impact of the 2026 Games could be between $2.2 billion to $2.6 billion in GDP. This includes $500 million in new tax revenues spread between the municipal, provincial, and federal governments.

CBEC will finalize its preliminary plans and recommendations and integrate any new information it receives in July from the IOC’s 2026 Candidature Guidelines. The final recommendations will be presented to Calgary City Council on July 24, which is when a final decision on whether to proceed with a bid is expected.

See also

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Kenneth Chan
National Features Editor at Daily Hive, the evolution of Vancity Buzz. He covers local architecture, urban issues, politics, business, retail, economic development, transportation and infrastructure, and the travel industry. Kenneth is also a Co-Founder of New Year's Eve Vancouver. Connect with him at kenneth[at]dailyhive.com

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