The Grafton Street Glory Hole, with the convention centre above it. Photo: Halifax Examiner
The municipality is on the hook for an extra $40,000 for last year’s Halifax Convention Centre deficit, and we still don’t know exactly what to expect for the current fiscal year.
The province posted year-end financial statements for Events East, the Crown corporation that runs the convention centre, online Thursday as part of its public accounts.
The provincial and municipal governments share the cost of the convention centre, and split its deficits.
The municipality’s share of the deficit for 2019-2020 was budgeted at $2,695,000. The new financial statements indicate the municipality will pay $2,736,484 — a difference of $41,484.
The province will pay $2,592,694, an increase of $12,694 from the budgeted amount of $2,580,000. (The municipal and provincial amounts differ “due to their different approaches to capital funding,” but they end up paying the same amount “over the years,” according to last year’s business plan.)
As the Halifax Examiner reported in June, Halifax’s share of the deficit for this year is budgeted higher, at $2,804,000, and that doesn’t even include the impact of COVID-19.
The municipality was unable to provide a response to the Examiner’s questions about where that money will come from and what next year’s deficit looks like, but CBC reported earlier this month that the provincial government is expecting to pay an extra $3 million in 2020-2021 due to COVID-19, and the city’s share would be the same.
Update — city spokesperson Maggie-Jane Spray responded on Friday:
The municipality will pay for its share of costs through the Halifax Convention Centre reserve.
The municipality is working with Events east to determine the financial impact of COVID-19 on the current fiscal year. This information will be available through the Events East business plan.
The budgeted balance in the convention centre reserve for 20/21 is $8.153M. The balance at the end of the year will be determined by the operations of the Halifax Convention Centre throughout the year.
No date has yet been scheduled for the Events East budget presentation for 2020, however, it is expected to be available for review in the fall.
The financial statements don’t include the current year’s budget, but they address the difficulty in budgeting for what’s shaping up to be a rough year for conventions.
A note titled “COVID-19 impact” reads:
The global crisis resulting from the spread of the coronavirus disease [“COVID-19”] will have a substantial impact on the Company’s operations, with the timing of recovery uncertain. The spread of COVID-19 has and continues to have on local, national and international impact. Measures taken to contain the spread of the virus, including restrictions on public gatherings, travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to the Company’s operations.
The Company cannot currently estimate the duration or future negative financial impact of the COVID-19 pandemic, however, it is expected that the COVID-19 pandemic will significantly impact operating results for the coming fiscal year due to restrictions on public gatherings and cancellation of events that were scheduled to be hosted at the facility. Discussions are ongoing with event organizers with respect to rebooking events once restrictions have been lifted and health and safety policies and protocols have been established.
The Company has used the best information available as at March 31, 2020, in determining its estimates and the assumptions that affect the carrying amounts of assets and liabilities. Actual results could differ from those estimates. The Company considers the estimates that could be most significantly impacted by COVID-19 to include the estimated credit losses on accounts receivable and the estimated volume of ticket refunds. Any resulting deficits in future periods due to the impact of the COVID-19 pandemic on operations will be fully funded by the Company’s shareholders, the Province and HRM.
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