Halifax, Province On The Hook For $11-Million Convention Centre Debt
HALIFAX — The Halifax Convention Centre will lose more than $11-million this fiscal year, and the municipality is on the hook for half of it.
The events business was walloped by Covid-19-related travel restrictions in 2020 and the HCC was forced to shut down for about half of the year.
The result was a deep hit to HCC’s profits, and the municipality and the province will now have to pick up the tab.
Events East Group operates the Nova Centre development that includes the Halifax Convention Centre. The organization presented its business plan to the regional council this week.
Events East was originally supposed to present the plan early this year but asked for an extension after Covid-19 hit.
Carrie Cussons, the president and CEO of Events East, said the pandemic forced the HCC to revise its event target down from 150 to 50 this year.
After reopening In September, Cussons said the centre has now hosted a total of 31 events and expects to pass its 50-event target in March. Those events, she admitted, are also much smaller than the ones the HCC typically hosts.
Coussons said Events East typically has about 400 staff, the majority of which are contract- and seasonal-workers. As Covid-19 has killed most of the centre’s business, Events East has slashed its workforce to about 100 salaried workers.
Those remaining employees are maintaining the operations of Events East facilities, as well as trying to retain and attract business back to the convention centre.
“The events business is not something that happens on a month-to-month basis, but for the most part it happens a year, if not years, in advance,” Coussons explained.
That means staff are still needed to reach out to clients, to reassure them and re-book events.
Revenue From Events Almost Entirely Gone
Although event activity is way down at the HCC, Coussons said there are still several fixed costs at the centre that need to be paid, such as building upkeep and sales activity.
That’s why the centre is looking at more than $11-million of losses this year.
However, the Halifax Convention Centre has historically been a money-loser. This year, before the pandemic hit, HRM was planning for a “normal” year, where it would pay for more than $2.5 million of the centre’s losses.
Originally, Events East expected the HCC to bring in just over $13-million in revenue this fiscal year, while its expenses would have totaled $18,638,000.
That would have left the centre $5.6-million in the red. As joint partners in the venture, the municipality and government of Nova Scotia would have had to split that debt.
Covid-19 eliminated virtually all the centre’s business, leaving it with just $860,000 in revenue for the fiscal year. Events East was able to cut some of its expenses through its layoffs but is still left with more than $11-million in losses.
The municipality’s half of that debt will be paid from a reserve that is funded from property tax revenues collected from the Nova Centre. After drawing out the millions to pay this year’s losses, the reserve will be left with a balance of about $3.7 million.
That number troubles Coun. Sam Austin, who said at Tuesday’s meeting it might be time to re-think how the reserve is used.
He said he understands “we are in extraordinary circumstances right now,” but that the reserve “wasn’t in good shape, even in good times.”
“Topping it up each and every year doesn’t seem to be working that well,” Austin said. “It [hasn’t been] balancing how we hoped to have it from the get-go.”
Optimism For Halifax’s Event-Hosting Future
Coussons told council Events East’s goal in the near-term is to work with organizers to host strategic local and regional events.
She said long-term plans will continue to focus on client retention, reassurance, and rebooking.
“Our primary focus is retaining impacted national and international events for a future year, as well working with our partners to continue to position our Centre and Nova Scotia as a strong destination for future events,” the Events East business plan states.
This includes rebooking 75 percent of impacted national and international events for a future year.
Coussons said events will no doubt be smaller in the near future, however, she thinks Halifax is in a good position to attract national and international business in the coming years.
“I believe Halifax is in a unique position, both because we have been hosting events, and [because of] how the pandemic has been handled here,” she said. “I think it positions us well for the future.”