The Canadian Museum of Human Rights: Follow the money
The proponents of the Canadian Museum for Human Rights knew they were in trouble in 2004.
- Projected construction costs had risen 47 percent in three years.
- A cornerstone of the project, an endowment fund to bring tens of thousands of students to the museum in Winnipeg each year, had become prohibitively expensive.
- And the amount of money the private sector would have to come up with had leaped from $60 million to $103 million.
What a difference having friends in high places makes.
Within three years the self-proclaimed Friends of the museum were breathing easy as their problems evaporated one by one, and instead it was Canadian taxpayers who were reaching for the oxygen.
"Follow the money" a screenwriter once wrote, and so we did.
The results were as surprising as our discovery that the human rights museum intends to inflate its annual visitor count by including cyber visits to its website.
Five years ago, Izzy Asper issued this statement:
"On April 17th, 2003, on the 21st Anniversary of the Canadian Charter of Rights and Freedoms, I, along with our federal and provincial governments and the City of Winnipeg partners, announced the potential creation of a groundbreaking $270 million Canadian Museum for Human Rights. This will be the largest human rights museum in the world and I am proud to have it located in my hometown of Winnipeg...
The Asper Foundation has proposed a unique partnership for funding the capital cost of the museum, estimated at $200 million for the first phase, with an additional $70 million being required for an eventual possible second phase. These sums include perpetual endowments to provide the income to fund student travel from across Canada. The national student program will sponsor 100,000 high school students and their chaperones from across Canada to visit the museum each year.
The following year, the Friends of the Canadian Museum for Human Rights released their annual report. It raised an alarm.
* The capital cost had grown to $243 million.
* The $35 million endowment fund that was part of the $200 million Phase 1 was now going to cost $50 million, they said, and should be hived off into Phase 2.
* And the $60 million the private sector had promised to raise was now $103 million to cover the increased cost of construction.
Fast forward a year, and Gail Asper, Izzy's heir and prime mover of his museum, is telling the Jewish Tribune the project is a go with no changes other than the bottom line. (All highlights ours)
September 22, 2005
Asper Foundation still needs $120 million for human rights museum
By Rick Kardonne, Jewish Tribune Correspondent
WINNIPEG - The Canadian Museum of Human Rights, slated to be constructed in the centre of Canada, at the intersections of the Red and Assiniboine Rivers in downtown Winnipeg, will be Canada's only major Holocaust museum on a scale equal to Yad Vashem or the Holocaust Museum in Washington, DC. (Gail) Asper said that the total cost of the museum is projected to be $300 million.
The endowment fund, all $50 million, is back in the budget. If there was any doubt, the Asper Foundation spelled it out a few months later.
The Asper Foundation donates $20 million to Canadian Museum for Human Rights
Embargoed until 11:00, CT, January 19, 2006:
Winnipeg, January 19, 2006:
The Asper Foundation today announced a total donation to the Canadian Museum for Human Rights of $20 million. "We view this as an integral investment in the spiritual and economic renewal of Winnipeg and as an investment in firmly positioning Winnipeg and Canada as a global beacon for human rights recognition, promotion and celebration," said Gail Asper, Managing Director of The Asper Foundation.
Total project costs are $311 million - including an endowment fund for the national student travel program.
But there was one significant change to the plans.
December 8th, 2006, Winnipeg, MB for immediate release:: Members of the Richardson Family and the Richardson Foundation today announced a combined gift of $3 million to the Canadian Museum for Human Rights...
Total project costs are $311 million...By year two of operations, it is expected that more than 20,000 students from across Canada will visit the Museum annually as part of a comprehensive national human rights program for young people.
For more information contact:
Kim Jasper, Director of Communications
Ph. 204- xxx-xxxx, Cell: 204-xxx-xxxx
The student component of the museum had shrunk 80 percent, from 100,000 to 20,000.
Then, in April, 2007, the museum backers won the tax money lottery.
The federal government committed to paying up to $100 million to the $265 million cost of construction, plus covering the annual operating costs of $22 million. And they would pass legislation making the Canadian Museum for Human Rights a national museum, the first outside of Ottawa. Glory be.
There was no mention of the endowment fund.
Stop right there.
Did nobody notice that the Friends now claim that the cost of construction has risen only 9 percent from 2004 to 2007, when it rose 47 percent in the 3 years preceeding 2004?
And who, exactly, is supposed to cover future costs which are inevitable in the this the biggest building boom in recent memory?
Well, that very question was asked in a very unexpected place---the Canadian Senate.
It turns out the Standing Senate Committee on Human Rights held a hearing into the human rights museum Monday, March 3, 2008 before passing the law making it a national institution.
Senator James Cowan asked:
" ...you say that the budget to build and fit up the museum, including exhibition development, would be capped at $265 million. These projects have a tendency to run over the expected costs. Who will pick up the tab if the costs exceed $265 million? "
Lyn Elliot Sherwood, Executive Director, Heritage Group, Canadian Heritage, answered.
"The board of trustees will be accountable for bringing this project in on budget and making decisions with respect to the building design and the contingency fund set aside that allow it to bring the project in on budget."
So the people who have failed to raise the private sector's portion of costs is now responsible for cost overruns.
Oh wait ... there's a contingency fund built into the $265 million budget.
Sherwood said the contingency fund was 15 percent.
Or about $40 million if our math is correct.
"That has been factored into planning and is one of the reasons for the urgency of this bill because at the moment the purchasing power of that $265 million is being eroded at the rate of between $800,000 and $1.5 million per month." said Ms. Sherwood.
That means cost inflation will be 8 per cent a year (using the highest number) according to the museum spokeswoman. Nevermind that the rule of thumb in Winnipeg projects is double that, let's use the museum's own figures.
Given that the federal government gave its blessing to a $265 million budget more than one year ago, the contingency fund has already been more than half eaten up.
And because the Friends failed to raise their share of the construction costs before March 31, construction won't start until 2009 at the earliest by which time the contingency fund will be ZERO.
By the time the politicians get their picture in the paper digging shovels into the sacred dirt of the Forks to mark the start of construction, there will be NO cushion against rising costs.
So who do you think will be resposible for the $18- to $20 million in added costs per year?
Uh, huh. You.
But, you ask, what about the kiddies?
Remember that the $265 million is going to construction and exhibits and not an endowment fund to bring students to see the magnificent museum.
Well, the Friends have that figured out. As they tell visitors to their website:
"As a federal Museum, the Government of Canada will fund the operations of the Museum. Business plans developed by the Friends of the Canadian Museum for Human Rights indicate it will cost approximately $22 million annually, including $6 million for the student travel program."
This may come as a surprise to the federal government. It did to us.
The taxpayer has now apparently absorbed the endowment fund and is now on the hook for travel costs of students brought to the Canadian Museum of Human Rights.
But, look, we've come full circle. Where last time we examined the rapidly deflating claims of how many people would visit the museum each year, we accepted that we could at least count on the 20,000 students who form the bedrock of the museum's plans.
Not so fast.
Even after the Friends began talking of 20,000 students annually instead of the original plan for 100,000, they spoke of raising an endowment fund of $50 million, a figure that hasn't changed since 2004.
How many students will $6 million of today's money buy?
Are we watching the visitations shrink before our eyes? And the cost to us explode?
And the usual government watchdogs sleep like babies.