Convention centre deal worries critics

A tentative deal to go ahead with a proposed $159-million convention centre in Halifax has not silenced critics worried about the potential costs to taxpayers .

The Halifax Regional Municipality and the Nova Scotia government announced the deal Monday.

Under the agreement, the province and the city will each pay about $56 million toward the capital construction costs. The project is still contingent upon a federal contribution of $47 million.

"It gives me great pleasure to announce that the province has reached an agreement with the Halifax Regional Municipality to proceed with plans for a new convention centre in the downtown core," Transportation Minister Bill Estabrooks said.

Mayor Peter Kelly urged critics to accept the plan.

"We can complain all we want but the fact is we made a decision, we're moving forward and we have to get these types of projects done," he said. "This is economic activity that's going to bring a long-term benefit. We have got to stop the negativity. This is a very positive day."

HRM and Nova Scotia have agreed to share any shortfalls that are not covered by the revenue generated through the convention centre's operations. Under previous rules, the municipality's share of deficit risk was capped at about $700,000.

"You're building a bigger box to lose the money in." — Kevin Lacey, Canadian Taxpayers Federation

Coun. Reg Rankin voted against the deal, in part because of the elimination of the cap.

"We're exposed," Rankin said.

Kevin Lacey with the Canadian Taxpayers Federation also criticized the deal.

"You're building a bigger box to lose the money in," Lacey said.

Will cost tens of millions: report author

Christopher Majka, who wrote a report on the convention centre for the Canadian Centre for Policy Alternatives, says it will cost taxpayers tens of millions over the next  25 years.

"Under no scenario can it possibly recover the amount of public investment that's required to build it and operate it," he said.

Other facets of the deal include that property taxes will be treated as a shared cost, with the current property tax on the existing convention centre used to determine the taxes for the new one. The province had earlier asked for a property tax waiver.

There is also a public buyback option for the public to take ownership of the convention centre late in the lease.

The convention centre would be built on the former Halifax Herald Ltd. site. The centre would be ready in January 2015.

The development by Rank Group is part of a larger complex that would include a hotel and a financial centre building. The total project would cost an estimated $400 million to $500 million.

The province and municipality now have a month to persuade the federal government to be part of the plan.

Officials with the federal government are reviewing the proposal. A spokesperson said Nova Scotia cabinet minister Peter MacKay understands the project's importance to the city and the province and is working to move it forward.