U.S. tariffs bump up cost of Dieppe community centre to $30.5M
The complex, which would replace the Centennial Arena, was initially expected to cost $29M
As trade officials in Canada and the United States hurry to reach a new NAFTA agreement, one New Brunswick city is already feeling the pressure of high tariffs.
On Sept. 10, Dieppe city council awarded a $30.5 million contract to construction company, Pomerleau Inc., to start building the Intergenerational Community Complex, a community sports complex set to open in the fall of 2020. The city was hoping it would initially be ready to open in 2019.
The initial cost estimate for the project was $29 million, which the city later had to review when the U.S. slapped increased tariffs on steel, aluminum and wood this spring.
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"The construction price came in about [$1.5 million] over our projected cost," said Dieppe Mayor Yvon Lapierre.
The mayor said projected costs were completed about 18 months ago.
"Since then of course, the imposition of tariffs on steel, aluminum and wood products has had a very negative impact on us."
Time to reassess
Lapierre said the imposition blindsided Dieppe council, and they had to take an extra month to reassess the cost of the project.
"Between the time when we made our business plan and today, the tariff on iron increased by 30 per cent and the tariff on wood between 25 per cent and 28 per cent," he said.
The increase in prices of material to build the centre caused the price to go way over what was initially budgeted by Lapierre and his Council.
"We had to resign ourselves to making some changes to our initial plan."
The proposed Intergenerational Community Complex will replace the Centennial Arena, which was built in 1967.
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The complex will feature an indoor walking track, a community kitchen, community rooms that can accommodate up to 150 people, a primary ice surface with about 1,000 seats, a secondary ice surface with about 300 seats, and an intergenerational greenhouse.
But Lapierre said council had to modify the centre's construction plan in order to meet the budget, such as emergency generating services, which would cost more than $1 million.
"Considering that we already have three sites where we have emergency generators we thought that this was something we could cut back and perhaps at a later point in time, reintroduce in that building," he said.
The project will be funded by all three levels of government and people in the community.
Mayor remains cautious
Lapierre said everything else appears to be going according to plan, barring any other tariffs, but he's exercising a certain level of caution.
"If you're going to want to build a project, you're going to have to pay the price," said Lapierre.
Canadian Foreign Affairs Minister Chrystia Freeland is returning to Washington this week for another round of high level talks with her American counterparts.
After weeks of talks, she is hoping to conclude negotiations to revamp NAFTA.
The negotiations are still looking for resolutions on issues such as, protection for Canada's cultural industries and the retention of a dispute resolution mechanism used to challenge punitive anti-dumping and countervailing duty measures.
Both the U.S. and Mexico have already reached an agreement in principle and are threatening to move on without Canada if Ottawa does reach a deal by Oct. 1.
With files from Peter Zimonjic