The costs for a new library in downtown Ottawa have ballooned due to inflationary pressures, forcing the city to come up with an additional $64 million to cover its share of the joint facility, according to a new report.
A report filed with the finance and economic development committee and the Ottawa Public Library Board, to be considered at their respective meetings on Tuesday, shows that the total cost for the new facility has risen to $334 million, up $141 million from the latest estimates.
Dubbed Ādisōke at a ceremony with Indigenous representatives earlier this year, the new facility set for construction at a parcel of land on Albert Street will be shared between the Ottawa Public Library (OPL) and Library and Archives Canada (LAC).
While the report says LAC has covered its share of the inflated costs, the city will need to approve an extra $64 million in spending for a total $168-million contribution to the new library.
Get weekly money news
The library was previously supposed to be finished by late 2024 with an official opening the following year. Now, the project schedule aims for mid-2026 completion.
The entire project had been expected to cost $192.9 million when city council approved it in 2018.
That included roughly $18 million for a 200-spot underground parking garage, which has now seen its cost jump to $28 million. These costs are set to be repaid through parking revenues, however.
“The difference between actual costs and the initial estimate can be directly attributed to escalation in the Ottawa construction market,” the report reads.
Canada’s construction industry has faced immense pressures during the COVID-19 pandemic, with labour shortages, rising prices for materials such as steel and supply chain slowdowns compounding to increase costs for most projects.
The pressures are “exacerbated” in Ottawa with a number of other high-profile projects underway, such as the Parliament Hill renovations and Stage 2 of light-rail, according to the report.
Ottawa’s initial construction cost estimates had factored in price inflation of roughly 10 per cent from 2016 levels.
But using Statistics Canada estimates of construction inflation in Ottawa through to 2023 (the project’s anticipated mid-point), the report now anticipates a 65 per cent hike in prices by then.
Staff propose covering off the city’s share of the shortfall through OPL reserves, development charges and municipal tax debt.
Comments