The City of Winnipeg's lease on the Confederation Life building costs taxpayers more than it should — an issue that was raised not just in this week's audit of the city's real estate transactions, but in a similar audit 14 years earlier.

Built in 1912 at a cost of $400,000, the 10-storey building on Main Street is a national historic site and, since 1999, has been leased by the city. It's currently home to the Assessment and Taxation Department.

The Ernst & Young (EY) report, released on Wednesday, reviewed 33 city real estate transactions, including the lease of the Confederation Life building.

Among other things, the report found that the city never checked with other possible landlords to assess fair value rent before renewing the lease.

The city renegotiated the lease too early, incurring $1.2 million in extra rent, and it never negotiated a cancellation clause on what would be another 25-year lease, the report said.

But the auditors missed one detail: A 2000 audit on the city's real estate transactions criticized bureaucrats for entering a long-term lease on the Confederation Life building.

The city first got into a lease for the building in 1999 for just short of 16 years.

The 2000 audit report concluded that the city would pay over $10 million in lease costs for a building it might have been able to buy for less than half the price.

It meant the city would make lease payments 500 per cent greater than the assessed value of the property.

"It [the City of Winnipeg] could've owned the building for $3.16 million in 15 years," the 2000 audit report states in part.

Despite the warning from the 2000 audit, the city renegotiated the lease contract in 2011 with Shindico, the local development company that owns the Confederation Life building.

The estimated cost of leasing and maintaining the building adds up to $38 million from 1999 to 2036. The city currently assesses the value of the building at $7.4 million.

A City of Winnipeg spokesperson told CBC News late Thursday that the current lease on the Confederation Life building is an operational lease, not a capital lease.

That allows the city to budget from year to year, the spokesperson stated in an email, adding that officials had an auditor review and sign off on the current lease.