Nova Scotia Auditor General Jacques Lapointe is questioning the market projections used to justify a new taxpayer-financed convention centre in downtown Halifax.
"We expected a much more comprehensive analysis supporting such aggressive growth targets," Lapointe said in a damning report issued Wednesday about Trade Centre Ltd., a provincial Crown corporation co-ordinating government involvement in the project.
With the foundation footings for the new project being drilled just a few blocks away, Lapointe told a news conference market assumptions were not supported.
"Some industry realities were ignored," said Lapointe.
Lapointe said that in making the case for the convention centre, Trade Centre Ltd. did not adequately assess or consider an excess of supply of convention space, new competitors or a stagnant market.
Nova Scotia and the Halifax Regional Municipality have committed $56 million each towards the project, Ottawa another $51 million.
The market study used to justify the project predicted total business would generate $754 million in spending over ten years. The convention centre is being built by the private developer Rank Inc., as part of a financial centre on the site of the old Halifax Herald building in the city's downtown.
'The financial management of this organization is very poor. So the fact that the financial projections they put together would also be poor would at least be consistent.' —Jacques Lapointe
While careful not to question the merits of a new convention centre, Lapointe recalculated the economic impact if the market projections are off between 10 and 50 per cent.
The analysis found direct expenditures generated by visitors would drop by $75 million if projected events are 10 per cent fewer than expected.
At 50 per cent fewer, the economic benefits would drop by $377 million over a ten-year period.
"If you're a little bit off, the impact can be substantially different," Lapointe said.
The Dexter government has rejected Lapointe's recommendation that cabinet obtain an independent second opinion on the 10-year market projections for the new convention centre.
The NDP said it is satisfied with the market assessment and reports from other consultants.
The CEO of Trade Centre Ltd., Scott Ferguson, said he's proud of the data his team gathered.
"I stand by these projections," he told CBC News.
Lapointe looked at the market projections as part of an examination of overall financial management at Trade Centre Ltd.
The auditor general also criticized travel and business expenses and procurement.
"The financial management of this organization is very poor. So the fact that the financial projections they put together would also be poor would at least be consistent," he said.