Now that we've had a chance to look at the fine print of the new trade and
convention centre agreement, we know it's going to cost taxpayers a lot more
than the $164.2 million in initial construction costs.
In fact, the true cost will be more than double that amount.
That's because Ottawa is the only level of government putting its money
($51.4 million) up front. The province and HRM will pay their share ($56.4 million
each) over time through a lease agreement with the developer, Rank Inc..
It's similar to buying a house and financing it with a long-term mortgage.
If you took out a $100,000 mortgage at 3% interest, and paid it off over 25
years, your real costs would be about $142,000. Add the cost of heating your
house and maintaining it through those 25 years, and your costs really add
In this case, Halifax and the province have each agreed to pay $6 million
dollars a year over 25 years to lease, maintain and operate the new convention
centre. So when you do the math ($12 million X 25 years) the real cost to
provincial and municipal taxpayers is $300 million. Add the $51.4 the feds are
contributing up front and the true cost to all taxpayers is more than $350
The province hasn't said yet how it will pay its annual share of the costs,
but the city expects taxes on the rest of the project (the hotel, office space,
garage) will pay for most of its share. It's even negotiated an option to defer
some of its payments if the project doesn't generate enough tax revenue in its
infancy. But while that may ease some of the burden up front, taxpayers will
eventually still have to make the payments.
For that money Halifax gets a new convention centre with the option to buy
it at the end of the lease for one dollar.
So, is it a good deal?
The NDP government obviously thinks so, and so do the majority of city
councillors (council voted 19-5 to approve the memorandum of agreement with the
By now we've heard all the arguments for both sides.
Opponents say with a struggling economy, and technology that gives people
other options to meet, the convention business is dying. They say the convention
centre will turn into a white elephant, and when it sits partially empty,
taxpayers will be stuck with skyrocketing deficits.
The glass-half-full crowd argues the only way to stay competitive in the
convention centre market is to build a new one. They talk about the money
conventioneers spend on hotels, restaurants, cabs and tours, and the economic
spin-offs for the dozens of other companies that supply those businesses.
With Tuesday's council vote, Nova Centre is now all but a done deal. In
the end, it was a leap of faith; a "build it and they will come" decision.
At least now, we have a much better idea what it's going to cost us.