New Civic campus project will have big-time economic impact, but big-time challenges loom

New Civic campus
Construction on the new Ottawa Hospital Civic campus at Dow's Lake is expected to begin in 2024 and last until 2028. Image courtesy The Ottawa Hospital

The construction of the Ottawa Hospital’s new Civic campus is expected to pump nearly $2 billion into the local economy and create more than 4,000 full-time jobs annually over the four-year life of the project, according to a new study.

The economic impact report, which was prepared by accounting giant Deloitte last October and released this week, says the massive infrastructure project – which has a total price tag of about $2.8 billion – is also expected to generate $150 million in additional tax revenue for the city in each of the four years.

Construction of the 2.5-million-square-foot health-care facility at Dow’s Lake is slated to begin in 2024 and wrap up in 2028.

“It’ll generate a lot of revenues directly into the Ottawa economy,” Nathalie Cadieux, the Ottawa Hospital’s chief financial officer, told OBJ on Thursday.

But the health-care facility’s top number-cruncher also conceded the project faces looming challenges.

The Deloitte report pegs the total cost of the project at $2.68 billion. Cadieux said the hospital is being “conservative” in its projections and is building a cushion into its $2.8-billion total estimate to account for potential cost overruns. 

Inflation fears loom

About 90 per cent of the funding is expected to come from the provincial government, while the Ottawa Hospital Foundation is poised to launch a fundraising campaign shortly to help cover the remaining costs.

Still, Cadieux said that with the annual inflation rate at a 30-year high and supply chain bottlenecks causing headaches for construction companies the world over, keeping the project on budget will be a challenge. 

The Bank of Canada hiked its key interest rate by half a percentage point – the highest increase in 22 years – this week in a bid to get inflation under control, which will further drive up borrowing costs.

“Every time the interest rates go up, it’s an added cost,” Cadieux said. “Certainly, the pace (at which) costs are escalating is something that’s concerning. We hope that in a couple of years it will stabilize. We’re working closely with (the Ontario) government to make sure that we’re appropriately funded and that we keep on top of these escalating costs.”

"Every time the interest rates go up, it’s an added cost. We hope that in a couple of years it will stabilize."

The report estimates that anywhere from 200 to 5,000 tradespeople are expected to work on the project each day as construction of the hospital ramps up, with a daily average of 2,000 workers on site.

With construction firms across the country already sounding the alarm over the growing shortage of qualified labourers, the tradespeople needed to complete the project could be hard to come by – another potential hurdle that’s keeping Cadieux awake at night.

“(Labour) supply and demand is definitely on our mind,” she said. “Our hope is it will stabilize (before 2024). But it’s definitely a risk that everybody is concerned with right now.”

The new Civic campus will replace the current facility on Carling Avenue, which opened in 1924. The new building will include 641 beds, nearly 100 more than at the existing campus, in a one-bed, one-bathroom-per-room model. 

The hospital will also feature a state-of-the-art digital health innovation hub, another innovation centre dedicated to health-sciences research, and a new rehabilitation facility. The new Civic will also be home to an expanded biotherapeutic manufacturing centre that’s expected to develop new vaccines and other health-care treatments.

Cadieux said the new research facilities will boost Ottawa’s burgeoning bioscience and health-tech sectors, which now employ more than 6,000 people. She said the new space – which will accommodate 25 additional basic research scientists, 30 more clinical research scientists and 176 new investigators – will help the hospital expand its R&D partnerships with institutions such as the University of Ottawa and Carleton University. 

“It will help with collaboration across ecosystems,” she said, adding the new campus will enable the Ottawa Hospital to attract top research talent. “I think there's a lot of potential.”