The expansion of the Victoria Hospital has begun. The City of Prince Albert expects to collect over $7m in development/building permit fees, which it will put towards furnishings for inside the building. (Susan McNeil/paNOW Staff)

By Susan McNeil

Hospital expansion

City gets at big bonus in permit fees for hospital

Jul 10, 2024 | 5:00 PM

An unbudgeted minimum $7 million surplus is heading the City of Prince Albert’s way after some digging by the development department showed the province must get development and building permits for the new hospital.

Mayor Greg Dionne pointed out the money will be used to offset the amount the city has to contribute to furnishings for the building.

“It’s been agreed that the amount will go towards furnishings. So if they end up at $8 million when it’s done, then that will be credited to the City of PA for their share of the furnishings,” he said.

After the planning and development department read the applicable legislation that says the province does need to get permits, which are charged based on construction value, Dionne said the negotiations began.

The cost of construction has increased from $350 million when it was first announced, to $500 million and now just under $1 billion. Much of the increase is the result of pandemic-related inflation that hit all construction projects hard.

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At their meeting on Monday, city council agreed to a letter of understanding with the province to have all permit fees applied to what is anticipated to be a significant bill for furnishing the hospital.

That amount alone is about $56 million right now, with the Boreal Health Care Foundation responsible for collecting about $30 million through fundraising and donations. The remaining amount will go to municipalities that are expected to be served by the building.

In this case, that is all of northern Saskatchewan.

“It is their intention to reach all the way to La Ronge. What they’re doing right now is researching who uses the hospital and what area, and they are going to come up with a formula,” Dionne said.

Previously, the municipalities in a health district would foot the bill but this will be a much larger geographical area as health authorities no longer exist.

The hospital is also being built as a regional hospital and is meant to serve the entire North.

Dionne wanted to ensure the province put pen to paper, however, when acknowledging the debt.

“We still don’t have the amount, but we’re at the point now that we want to move ahead with the letter of agreement so that the city is in there and secured,” said Dionne.

The letter deliberately omits numbers because the city wants to be able to include revenue from permit fees still to come.

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susan.mcneil@pattisonmedia.com