Convention centre faces $11.1m deficit
A conference is one of the last places people want to be during a pandemic, so it’s no surprise the Halifax Convention Centre has taken a huge financial hit.
Its total losses for the current fiscal year will add up to nearly $11.1 million — almost double the amount that was projected pre-pandemic — and Halifax Regional Municipality is on the hook for half of it as per its agreement with the province to split any losses evenly.
The projected deficit was presented to Halifax regional council as Events East, the government agency that manages and operates the convention centre, sought approval for its 2020-2021 convention centre business plan Tuesday.
Events East was given permission to submit its plan, which is already eight months underway, later in the year “due to ongoing uncertainty and changing public health guidelines.”
SIX-MONTH CLOSURE
Carrie Cussons, president and CEO of Events East, said the pandemic forced the convention centre to close for six months.
Since reopening in September, the downtown facility is now hosting scaled-down, local events.
“We normally generate significant revenue from the events we host,” Cussons said. “Unfortunately the types of events that we have been able to host are much smaller and do not have as large revenue streams.”
Cussons said all of the convention centre’s variable staff, such as kitchen staff and servers who are part-time
and paid hourly, have been laid off, but the revised amount given for salaries and benefits dropped by only $374,000 because most salaried employees have remained employed during the pandemic.
However there are fixed costs that need to be paid whether there are events hosted at the convention centre or not, Cussons said.
Maggie Macdonald, manager of regional recreational services for Parks and Recreation with HRM, said the municipality will draw money from the Halifax Convention Centre reserve to cover the costs.
‘RETHINK WHOLE APPROACH’
But Coun. Sam Austin (Dartmouth Centre) said the reserve, which is used to fund payments related to the centre, including lease payments and the municipality's share of the operating expenses submitted to Events East, “isn't in good shape even in the best of times.”
“It wasn't balancing how we'd hoped to have it from the getgo,” Austin said.
“It might be time to really rethink the whole approach to that reserve since it hasn't panned out … Topping it up each and every year doesn't seem to be working that well.”
Jane Fraser, chief financial officer of HRM, said the reserve will have a budget of $3.7 million at the end of the fiscal year.
OTHER USES FOR CENTRE?
Coun. Lindell Smith (Halifax Peninsula North) questioned whether the convention centre could be used for other purposes, such as a temporary shelter for homeless people.
“Many organizations are trying to find places to put folks now that the winter is coming. … (Is) the convention centre potentially being looked at in helping with that issue?” Smith asked.
Cussons said neither the municipality or the province has inquired about using the convention centre as a temporary shelter.
Jacque Dube, chief administrative officer of HRM, said it hasn't been identified as a potential site for a temporary shelter “simply because of the ongoing events that have been there.”
“The issue for us and the issue for public health is having people living in the facility at the same time when there are people coming in for events,” Dube said.
Dube said if the convention centre remains closed because of restrictions put in place by public health, the municipality would “likely look at the option.”
Events are currently paused at the convention centre, but if lifted, there will be smaller events in January, February and March.
Cussons said in the future, the convention centre will hopefully attract Haligonians, who may want to use the space for a concert or cultural gathering as it's currently being used, and people from around the world.
“I believe Halifax has a unique position given … the way the COVID pandemic's been managed to date,” Cussons said.
“While the events may be smaller, there will be events that will be hosted on both the national and international level. They will be looking for destinations that are perceived to be safe.”