The Ministry of Health says the scope of The Ottawa Hospital’s new Civic campus has evolved since the project first began, and a nearly 400 per cent increase in price reflects “factors” not captured in the original plan.
Last week, Ontario’s Infrastructure Minister David Piccini revealed the province’s contribution to the new Civic campus had surged to nearly $10 billion, up from its original share of $2.1 billion.
That revelation raised questions about what the actual cost of the project would eventually be, a figure that has yet to be released. Originally, in 2021, it was projected to be a total of $2.8 billion: $2.1 billion from the province and a $700-million local share.
Piccini attributed the ballooning costs to supply chain issues, development-charge fees, and “a number of the municipally imposed fees.” On Tuesday, the health ministry said its contribution to the new hospital had increased so much because the “initial cost estimate for this project was based on a years-old submission.”
“The project scope has since evolved, with additional work and requirements identified through the planning process,” said Lily Barnes, a spokesperson for the Ministry of Health.
“The ministry has worked closely with the hospital to refine the scope and costs, accounting for factors that may not have been captured in the original submission, including the age and condition of existing infrastructure and the community’s evolving health-care needs over the decades ahead.”
The hospital project was put to tender in November 2022. When the tendering process closed in October 2023, there was a single bid for the project: a joint venture between PCL Construction and EllisDon .
By February 2024, Infrastructure Ontario and The Ottawa Hospital signed a development-phase agreement with the builders, which kickstarted construction of a parking garage at the property near Dow’s Lake . Construction of the hospital itself has not begun — the design is complete, the hospital says, and construction timelines and project costs are still being finalized.
Orléans Liberal MPP Stephen Blais suggested the fact there was got one bid has played a role in the increased costs.
“During that process, the hospital and Infrastructure Ontario are literally only discussing price with one bidder. The price isn’t settled on. They’re still negotiating. There is no competitive friction and that’s why I think we’ve seen prices go up by five times and perhaps even larger than that,” Blais said this week.
It is the biggest health-infrastructure project in Ottawa’s history, and, when complete, it will be one of Canada’s largest and most modern teaching hospitals. The updated total cost of the project has not been confirmed, nor has there been an answer on whether the local share will also increase.
Mayor Mark Sutcliffe said last week that the City of Ottawa was considering a $150-million request to help pay for the local share, but it would not shell out billions of dollars to help account for the cost overruns. It’s not the city’s jurisdiction to pay for health care, he said. The Ministry of Health, however, said the city was responsible for chipping in, too.
“The City of Ottawa has an important role to play in supporting a major hospital project that will serve its residents,” Barnes said. “The Ottawa Hospital’s new Civic Campus will follow the same cost-sharing formula as every other hospital project in the province.”
The health ministry said all 60 hospital development projects currently underway across the province followed the same standardized construction cost-sharing formula: 90 per cent provincial funding and a 10 per cent local share. That’s 10 per cent of the construction costs — the hospital must pay 100 per cent of all equipment and furnishings inside the building.
Ontario Liberal MPP for Ottawa South John Fraser said the provincial government should not expect the city or the hospital to pick up the tab for the increased cost. He said the responsibility for an increased local share would inevitably fall on the local residents of Ottawa, “either through fundraising, taxation or some other means.” This shouldn’t happen, he said, adding the province should be the one to pay for any additional costs.
“One could understand a 10, 15, 20 per cent increase maybe. But five times? Between 400 and 500 per cent? It’s not reasonable to expect that,” Fraser said at a media conference at Queen’s Park this week.
To pay the $700-million local share, the hospital asked the City of Ottawa for $150 million , but city councillors have yet to make a decision. The other $550 million is to come from local fundraising efforts. The hospital foundation did not say whether it expected the fundraising goal to increase if the local share of the total cost had indeed increased at the same rate as the provincial contribution.
Fraser called on the province to release the actual cost of the project and to let Ottawa residents know exactly what the local share would be.
“We do not have answers to any of these questions, but here’s what we do have: We have a gigantic parking garage on Dow’s Lake. A big hole in the ground. Nurses without jobs, and patients in the hallway.”
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