Consultant's report says 2021 games could be held for $115M

An independent review of the $130 million business plan to host the 2021 Francophonie Games in Dieppe and Moncton concludes the event could be held for $115.3 million.

A 66-page report prepared by MNP LLP for the federal government was obtained by Radio-Canada.

The executive summary calls the initial $17-million bid made to host the international event in New Brunswick "significantly underestimated."

The cost of the games has come under intense scrutiny after Radio-Canada revealed the organizing committee's business plan, given to all three levels of government in March, was 664 per cent higher than what was previously known by the public.

But even a total cost of $115 million, with almost $60 million from the New Brunswick government, is unacceptable for the province.

"That's way too much right now," Robert Gauvin, the deputy premier, said Thursday, reiterating the province won't spend more than $10 million.

The report MNP, a chartered accounting firm, states reductions of $18.5 million to $24.6 million could be made "without major impact on the Games."

Further cuts would be possible, but would "require even greater efforts, and would have a more significant impact" on holding the event. 

It states a minimum budget to hold the games would be around $72 million.

The report calls the $130 million business plan prepared by the organizing committee "rigorous and comprehensive" and states its review found no major errors or omissions in the budget estimates. 

'Total confidence'

Organizers said Monday they were not aware of the findings of the report.

Five board members resigned Wednesday, with four saying they did so after believing they had lost confidence of the provincial government. The remaining six board members released a statement Thursday evening in response to the report.

"We strongly believe in the Games of La Francophonie and would like to reiterate our total confidence and trust in the current team and for the rigorous work that was done to develop our business plan," the statement said, going on to express confidence the games can be held. 

The report cautioned that one major risk is the lack of funding agreements between the various levels of government.

Another issue it noted was the committee's plan to pay for up to 80 journalists to attend the games, saying it could "create a lot of public concern" if revealed publicly. Organizers estimate 250 international journalists are expected to cover the games.

The report is critical of the "significantly underestimated" $17 million bid. Those involved in the bid say they relied on a games application guide when preparing the bid, which did not require a complete business plan. 

The report did not examine the differences between the first cost estimate and the final business plan, calling such work "neither useful nor relevant as the initial budget does not appear to have been supported by a rigorous business plan or sufficient and appropriate analysis."

One of the volunteers on that initial committee, Éric Larocque, has served as executive director of the organizing committee since May 2016. 

The report recommended adjusting the operations budget from $93.95 million to $95.4 million.

It calls for slashing the infrastructure budget to $19.9 million from $36.6 million, in part by eliminating "non-essential" projects and removing taxes. It doesn't consider taxes applicable "due to the nature of the project."

Based on a reduced budget of $115.3 million, the report suggests a federal contribution between $35.5 and $40.4 million.

Federal policy on hosting international sporting events says the government can pay no more than 50 per cent of the cost. 

Gauvin, New Brunswick's deputy premier, previously suggested businesses could help cover the funding shortfall. But the report suggests there's likely not much more to be found. 

"It is unlikely that the income from sponsorships will be significant," it states. "A title sponsorship could certainly interest some of New Brunswick's large corporations (for example, Irving or McCain), but reaching the $6 million budget goal seems difficult."

Past Games, held in Ottawa, Niger, Lebanon and most recently the Ivory Coast, had 2,400 to 3,000 participants. The organizers of the 2021 games estimate 3,000 will take part, though the report casts doubt on that. 

The projected participation "could be qualified as optimistic" given the cost for people to travel to New Brunswick from around the world, though large delegations from Quebec, New Brunswick and the rest of Canada are expected, the report states.

Cities payments not expected to rise 'significantly'

The report also raises the possibility of increased contributions from the two host cities, saying that because the overall budget has risen, "we will have to see if the amount of the $ 750,000 cash contributions expected from the two municipalities will be increased."

"According to discussions held between MNP and the representatives of the New Brunswick government, it is not expected that the financial contribution of municipalities will increase significantly," the report states.

The games cost about $43.6 million when held in the Ottawa region in 2001.