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City taxes hover over museum

Unexpected bill challenges institution's bottom line

By: Mia Rabson

Posted: 09/30/2010 1:00 AM | Comments: 0 (including replies)

DAVID LIPNOWSKI / WINNIPEG FREE PRESS Enlarge Image

Already facing mounting inflation costs, the Canadian Museum for Human Rights is now trying to cover an unexpected tax bill from the city.

OTTAWA -- A mounting city tax bill that could run into the millions the Canadian Museum for Human Rights didn't know it would have to pay is still causing headaches for the developing institution.

According to both the museum's 2009-10 annual report and its corporate plan for 2008-2015 tabled in the House of Commons this week, the museum has yet to get Ottawa to agree to up its operating funding to help it pay for its city taxes and inflation.

"There are two issues that cannot be managed within... the original operating budget of $21.7 million," the corporate plan notes.

When the museum first developed its operating budgets, it didn't address inflation on costs such as heating and electricity.

Also, nobody picked up on the fact national museums have to make payments in lieu of taxes to the municipality in which they are located. Private museums do not.

So its original operating budgets for 2008 through 2012 did not include having to make those payments.

The first two of those payments is now due but the museum is still negotiating with the city and Public Works Canada about how and when they will be paid.

"Public Works and the city have been in discussions for a number of months," said museum spokeswoman Angela Cassie.

The city formally applied for the first two payments in August, said Cassie.

The 2009 bill, which is for the period April-December 2009, is $157,792.21.

The 2010 bill, for the entire year, is $202,938.63.

Both bills are supposed to take into account only the structure completed at the time of the assessment. The museum began construction in April 2009 and won't be completed until 2012.

The museum has previously estimated the tax bill once the museum is completed could be as high as $9 million annually but this year's reports did not give a figure. Cassie said that's because it's still very uncertain what it will be.

Cassie said the discussions underway include a review to ensure the city made accurate assessments on the property thus far.

She noted this process is new not only for the museum but also for the city.

"We're learning from each other," she said.

Neither of the 2009-10 or 2010-11 budgets include any room for the two tax bills. The annual report shows the museum went $5.2 million over budget last year and was allowed to borrow that amount from its 2010-11 federal operating fund allocation.

It went over budget on its exhibit development work that included adding more stops and technical elements to its cross-country tour gathering information on what should be included in the museum's galleries.

It also went over budget on marketing and communications, mainly because of a corporate brand strategy.

Ottawa allowed the museum to borrow the overage from its budget allocation of $21.7 million for 2010-11. That leaves the museum with $16.5 million to spend this year. At the moment, it is forecasting needing $15.85 million.

A spokesman for Heritage Minister James Moore said Ottawa has granted funding for $21.7 million in each of the 2010-11 and 2011-12 years and there are no plans to increase those amounts.

However, the museum has yet to negotiate its operating funds beyond 2011-12.

The museum expects to have detailed operating budgets prepared for the years beginning 2012-13 before the end of this year.

They will take into account funds the museum expects to raise once the doors open from things such as ticket sales, gift merchandise and fundraising.

mia.rabson@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 30, 2010 A5

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