Has F 35 accounting come to Whitehorse?

Remember when the federal Tories got in so much trouble for low-balling the cost of new F-35 fighter jets? At first they said the jets would cost $15 billion. 

Remember when the federal Tories got in so much trouble for low-balling the cost of new F-35 fighter jets? At first they said the jets would cost $15 billion. Then it turned out they had failed to mention another $10 billion in costs.

It was a clear example of politicians and officials who really, really wanted something, and didn’t want taxpayers to realize how expensive it really was.

The auditor general of Canada harshly criticized the government for the lack of transparency in its accounting.

Let’s now talk about a different project: the City of Whitehorse’s big new $55-million megaplex, which involves two major new municipal buildings and a budget unprecedented in our city government’s history.

The press release the city put out earlier this week said the “total project cost for new Service and Operations Buildings is $55 million.”

Note the words “total project cost.”

First, does the $55-million figure include financing costs for the $29 million in financing the project requires? A quick look at an online mortgage calculator suggests that a $29 million loan, at 4 per cent and amortized over 20 years would require $13 million in interest costs.

That would be a substantial additional cost to taxpayers.

Second, does it include all the consulting costs associated with managing the project? There were eight consulting firms involved in planning the project. How much were their fees? Does the $55 million include those fees plus more fees for such firms going forward?

Third, does the $55 million figure include the $1.5 million figure mentioned in council documents last week for furniture, equipment and art? Or is that not part of the “total project cost” publicized?

By the way, city policy is to spend the equivalent of one per cent of the total budget on art. A $550,000 collection of Whitehorse art would certainly be impressive. It would make the new city headquarters building in effect into the biggest art gallery in town. Hopefully it will be open to the public to view.

Fourth is cleanup costs. The mayor recently told the Yukon News that the blue building on Fourth Avenue was “littered with asbestos.” A wide variety of petroleum and chemical products have been used in the shop there over the years.

How much will it cost to remediate all the surplus city buildings before they are sold? I can’t find a firm estimate in the business case. Is it included in the $55 million, or will we only find out the real number when the buildings are sold in a few years?

Remediation is not cheap, and all this talk of asbestos and chemicals raises a question: could cleanup costs be in the millions of dollars? Low millions? High millions?

To its credit, the city has not counted the revenue from the sale of its old buildings into the business case. It might be possible that the buildings will sell for more than their remediation costs, in which case the $55 million figure would get lower.

But if you believe remediation is that cheap, I have some land near the old oil refinery in Marwell I’d like to sell you.

Fifth is the downtown fire hall, which will be demolished for one of the new megaplex buildings. The city says the fire department is doing a strategic plan. “If it is determined that (a fire hall) is still needed in the downtown core the city will consider all options.” Does that mean that after the megaplex blots out the current fire hall on Second Avenue, the city might have to spend millions on a new downtown firehall?

It’s kind of a big question.

Finally, what else don’t we know about?

To sum up, the “total project cost” according to the city’s press release is $55 million. But does the real cost also include tens of millions extra in interest, consulting fees, furniture, equipment, art, asbestos and chemical remediation costs (net of subsequent land sales), and a new downtown fire hall?

Curtis told the News that the “business plan is airtight.” I don’t know many investors who would consider a business case airtight if it had unknown land remediation and extra fire hall construction costs remaining as large unknowns.

Remember that we are on the hook for this project. The city isn’t getting a billion dollars a year from Ottawa that can smooth over any mistakes like the Yukon government does.

Someone from Ottawa might accuse our mayor, council and administration of F-35 accounting. To clear up any concerns on this, they should re-issue that $55 million press release with a full depiction of the true “total” costs on this project.

My trust in them has been sufficiently shaken by the communications to date on the megaplex, that I also think they should not sign another contract on this thing until they have made their case and put it to a public vote.

Disclosure: I own a house in Whitehorse and pay property taxes. My family uses facilities like the Canada Games Centre that may be affected if the megaplex negatively affect other city programs and services. And I am a user, donor or board member for four of the eleven community groups negatively affected by the city’s recent decision on property tax grants for community groups (and this column is my own opinion and does not speak on behalf of any of them). I also volunteered on the mayor’s campaign in the last election.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on Channel 9’s ” Yukonomist” show or Twitter @hallidaykeith

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Dr. Brendan Hanley, Yukon’s chief medical officer of health, speaks to media at a press conference about COVID-19 in Whitehorse on March 30. The Yukon government announced three new cases of COVID-19 in Watson Lake on Oct. 23. (Crystal Schick/Yukon News file)
Three new COVID-19 cases identified in Watson Lake

The Yukon government has identified three locations in town where public exposure may have occurred

Teagan Wiebe, left, and Amie Wiebe pose for a photo with props during The Guild’s haunted house dress rehearsal on Oct. 23. The Heart of Riverdale Community Centre will be hosting its second annual Halloween haunted house on Oct. 30 and 31, with this year’s theme being a plague. (Crystal Schick/Yukon News file)
Plague-themed haunted house to take over Heart of Riverdale for Halloween

A plague will be descending upon the Heart of Riverdale Community Centre… Continue reading

Indigenous lobster boats head from the harbour in Saulnierville, N.S. on Oct. 21. Elected officials in the Yukon, including all 19 members of the legislature, are backing the right of Mi’kmaq fishers on the East Coast to launch a moderate livelihood fishery. (Andrew Vaughan/CP)
Yukon legislature passes motion to support Mi’kmaw fishery

“It’s not easy, but it’s also necessary for us to have these very difficult conversations”

A pedestrian passes by an offsales sandwich board along Fourth Avenue in Whitehorse on Oct. 22. NDP MLA Liz Hanson raised concerns Oct. 21 in the legislature about increased hospitalizations due to alcohol consumption that correlate with an extension in the hours alcohol can be sold in the territory. (Crystal Schick/Yukon News)
Alcohol-related hospitalizations rise after off-sales hours extended

Reduced hours for off-sale liquor establishments likely part of Liquor Act spring reforms

Tourism and Culture Minister Jeanie McLean (formerly Dendys) speaks during legislative assembly in Whitehorse on Nov. 27, 2017. The Yukon government has announced $2.8 million in tourism relief funding aimed at businesses in the accommodation sector that have already maxed out existing funds. (Crystal Schick/Yukon News file)
Tourism relief funding offers $2.8 million to hotels and overnight accommodations

$15 million in relief funding is planned for the tourism sector over the next three years

The Yukon government is asking for all claims in a lawsuit over the Takhini elk herd be struck by the court. (Mike Thomas/Yukon News file)
Yukon government asks for Takhini elk lawsuit to be struck

The Yukon government is asking for all claims in a lawsuit over… Continue reading

The Yukon government has filed a reply to an outfitter’s petition challenging the reduction of its caribou quota to zero. (Yukon News file)
YG replies to outfitter’s legal challenge over caribou quota

The Yukon government has filed a reply to an outfitter’s petition challenging… Continue reading

The Yukon government is encouraging people to get the flu vaccine this year, saying that with COVID-19, it’s “more important than ever.” (Black Press file)
Get flu vaccine, Yukon government urges

The Yukon government is encouraging people to get the flu vaccine this… Continue reading

Benjamin Munn, 12, watches the HPV vaccine in 2013. Beginning Jan. 1, 2021, the Human Papillomavirus (HPV) vaccine will be available to all Yukoners up to, and including, age 26. Currently the program is only available to girls ages nine to 18 and boys ages nine to 14. (Dan Bates/Black Press file)
HPV vaccine will be available to Yukoners up to, including, age 26

Beginning Jan. 1, 2021, the Human Papillomavirus (HPV) vaccine will be available… Continue reading

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

COMMENTARY: Me and systemic racism

The view from a place of privilege

Today’s mailbox: Electricity and air travel

Letters to the editor published Oct. 23, 2020

Yukonomist Keith Halliday
Yukonomist: Irony versus Climate

Lately it seems like Irony has taken over as Editor-in-Chief at media… Continue reading

Most Read