The Canadian Museum for Human Rights is scheduled to open in 2012 in Winnipeg's historic Forks market area. (CBC)

Just a few months into construction, the Canadian Museum for Human Rights has encountered a major capital budget shortfall.

The original projected cost of the project, $265 million, has ballooned to $310 million, according to Patrick O'Reilly, chief operating officer.

He blamed the increased costs on inflation, the fluctuation of the Canadian dollar, and plans to make the building more environmentally friendly. Gauging those factors is an inexact science, O'Reilly said.

"It's something that's not necessarily predictable. I mean, you predict some inflation, you predict there might be some currency fluctuation, [but] what we're saying is, on this one we've seen much more than was expected," he said.

O'Reilly said the museum administrators will turn to their fundraisers to see if they can contribute more. Private sector contributions already account for $110 million of the original capital budget.

"It's never easy to ask people for money, but I think people who were supportive of us and people who have been at the table with their money … know that we're committed to this and we know they're committed," O'Reilly said. "We're saying, 'We're almost there. We need that little bit of help to get past the final stages.'"

'It's never easy to ask people for money, but I think people who were supportive of us and people who have been at the table with their money … know that we're committed to this and we know they're committed.'—Patrick O'Reilly, Canadian Museum for Human Rights

Peter Squire, public affairs director for the Winnipeg Real Estate Board, said he would help get the word out. He plans to ask Realtors from across the country to donate to the building of the museum, which is scheduled to open in 2012 at Winnipeg's historic Forks market area.

The Manitoba government is also prepared to help out, but only if the museum manages to secure most of the outstanding $45 million through its fundraising effort.

"I would be very disappointed if we stopped [the project].… Announcing it and still completing some other fundraising, I think, is doable," Doer said.

Operating shortfall of $5.2M announced last week

News about the capital shortfall comes just a week after the museum board released its latest corporate report and announced a shortfall of $5.2 million in the operating budget.

Officials said the original operating budget was flawed because the structure is the first national museum to be built in a generation — and the first ever to be built outside of Ottawa — so there is a steep learning curve in terms of anticipated expenses.

The corporate report suggested the initial figures did not properly adjust for inflation and taxes. The museum's administrators are now negotiating with the federal government to borrow against a surplus it foresees in the future.

The federal government has already committed $21.7 million annually for the museum's operating costs, on top of $100 million previously announced as a capital investment.

The Manitoba government is putting $40 million toward the project and the City of Winnipeg has approved a $20-million contribution in cash plus land, infrastructure and forgiveness of property taxes.