Province covers $33M overage for Kamloops hospital renovations

Renovations to Royal Inland Hospital went over budget again, and the province is covering the bill again.

Including the Gaglardi Tower, the hospital upgrades in Kamloops are now estimated at nearly a half-billion dollars.

That’s after accounting for a $33 million budget increase, fully funded by BC health ministry for a second time.

“We’re seeing increases in material and labour costs coming out of the pandemic that were not accounted for in the original budget,” Dan Goughnour with Interior Health said.

He added some projects were delayed due to labour shortages, while plans were sometimes redesigned as construction in the older hospital building brought surprises.

Goughnor and other Interior Health executives briefed the Thompson Regional Hospital District on its progress Friday, Oct. 3.

With the tower completed in 2022, construction moved on to the second phase of the project that includes renovations to the emergency department, pharmacy, morgue and other wings of the hospital.

That phase accounts for $148 million of the $490 million project and it’s now expected to be completed in spring 2027, Goughnor said.

Asked by director and Kamloops councillor Bill Sarai where the cost increases were coming from, he couldn’t specifically say. He did say Interior Health expects no more increases after going over budget twice.

“I can say that with the budget increase, as part of agreeing to it, we have locked the price in,” he said. “That was part of the negotiation, ensuring that would be the last of it.”

The hospital district board came down hard on construction overruns and Interior Health’s delayed communication. Its $40 million overage was covered by the province then, and the $33 million will be covered this time, the board heard.

Typically, the hospital board funds roughly a third of the costs for new equipment and construction at regional health care facilities.

While construction continues at Royal Inland, the neighbouring BC Cancer Centre should soon see construction. The more than $300 million project will bring long-awaited radiation therapy to Kamloops, scheduled to start taking patients by 2028.