The following email was sent by the Canadian Taxpayers Federation to Canadian Heritage Minister James Moore on August 26, 2009.
Dear Minister Moore,
I am writing to you today to inquire as to what measures your department has taken to address erroneous comments made by staff to the Standing Senate Committee on Human Rights during the approval stage for the Canadian Museum for Human Rights.
As you may be aware, on March 3, 2008, Ms. Lyn Sherwood, an official with your department, went before the Committee and had the following exchange with Senator James Cowan:
Senator Cowan: This is not one of those projects where the federal government is left to pick up anything over and above the $165 million that is contributed by other parties, is it?
Ms. Sherwood: The total budget is $265 million. You are putting your finger on a very real risk in the current environment, which is the impact of inflation on construction budgets. That has been factored into planning and is one of the reasons for the urgency of this bill because at the moment the purchasing power of that $265 million is being eroded at the rate of between $800,000 and $1.5 million per month.
As you are aware, on May 22, 2009, the museum announced $45 million in cost overruns, bringing the total cost for the project to $310 million.
However, using the high end, per month inflation figure ($1.5 million) that Ms. Sherwood noted at the March, 2008 Senate hearing, the museum should only have been $22.5 million higher when the overruns were announced in May, 2009 - 15 months later. Thus, cost overruns of $45 million were double the high end figure provided to the Senate.
Further, during an August 10, 2009 meeting with museum staff, the Canadian Taxpayers Federation was told the cost overruns were originally $58 million and that changes were made to the design of the facility to reduce the overruns to $45 million.
In other words, the estimate provided to the Senate by Ms. Sherwood was off by $35.5 million or approximately 157%.
Surprisingly, during the meeting with museum officials, staff indicated that they were not aware of any pay cuts or other repercussions to those involved with the project as a result of the $35.5 million mistake.
In addition, it is important to note that the federal government listed the Museum’s cost at $265 million as early as April 20, 2007. However, that same budget figure was presented at the Senate hearing almost a year later. Oddly enough, while department staff spoke at the hearing about the importance of factoring in construction inflation going forward, they appear to have neglected to update their own figure.
As you are aware, taxpayers, through various government bodies, are once again being asked to contribute even more funding towards the museum to help pay for the cost overruns.
Could you please indicate if any staff within your department, or at the Museum, received pay cuts and/or other repercussions as a result of the museum’s cost overruns. Further, was the department aware that the cost of the museum was above $265 million when it provided that figure to the Senate committee? Finally, please indicate what action has been taken to correct the erroneous comments that were made before the Senate Committee.
Thank you for your attention to this matter. I look forward to receiving your response.
Provincial Director, Manitoba
Canadian Taxpayers Federation
Cc: Senator James Cowan
Please note that this email, and your response, will be posted on the Canadian Taxpayers Federation’s blog – www.taxpayerblog.com
Wednesday, August 26, 2009
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