The Hudson’s Bay Company store redevelopment project in downtown Winnipeg has seen its estimated cost balloon to $310 million from the initial $130-million projection.

The project is known by its Indigenous name, Wehwehneh Bahgahkinahgohn.

The Southern Chiefs’ Organization (SCO), which is developing the project, unveiled the updated figure during a news conference inside the former department store on Wednesday. SCO Chief Jerry Daniels attributed the increase to supply-chain pressures, inflation, potential U.S. tariffs on construction materials, and the added complexity of upgrading a heritage building. Structural reinforcements and energy efficiency improvements have also contributed to the higher costs, Daniels told reporters.

The six-storey structure, originally opened in 1926 and closed in 2020, is being converted into a mixed-use development featuring 373 housing units, as well as office, retail, and restaurant spaces for Indigenous entrepreneurs. Interior demolition is underway. A large crane has also been installed to aid in the construction of an atrium.

In a news release, SCO described the crane’s installation a key milestone in the project’s advancement.

The federal government initially committed $65 million in a mix of forgivable and low-interest loans when SCO took over the property in April 2022. In 2024, after costs escalated, Ottawa provided an additional $31 million. The redevelopment is expected to be completed in 2028.

The previous Progressive Conservative provincial government committed $35 million in support, while the City of Winnipeg provided $10 million in tax breaks.

The original plan included a health centre offering Western and traditional medicine. But, citing comments from Daniels, the Canadian Press reported that aspect is being reconsidered due to costs. Assisted-living suites for elders have also been scrapped, as the organization did not account for them in the initial budget, and a governance office for the 32 First Nations members has been scaled back to a smaller meeting space, according to CP.

While no new financial commitments have been secured, Daniels remains optimistic about obtaining additional funding. He vowed that the project will be completed.

The federal government is investing an additional $31 million in the redevelopment of a former Hudson’s Bay Company department store in downtown Winnipeg.

Infrastructure Canada is investing $25 million through its Green and Inclusive Community Buildings Program. Meanwhile, PrairiesCan, a regional economic development agency, will furnish $6 million via the Community Economic Development and Diversification program.

The project has an estimated cost of $200 million after the originally anticipatedl $130-million price tag was increased in December 2023.

The Southern Chiefs’ Organization, an Indigenous governmental group, is redeveloping the former Bay store as an economic, housing and cultural hub project known as Wehwehneh Bahgahkinahgohn. The project is slated to create housing, business, and cultural spaces accessible to both First Nations and non-First Nations citizens.

Ottawa previously committed $65 million, in the form of a $55-million forgivable loan and $10-million low-interest loan. The SCO represents 34 Anishinaabe and Dakota Nations.

If all goes according to plan, the redeveloped property will contain affordable housing units, assisted living units for elders, a childcare centre, a museum and gallery, space for entrepreneurs, two restaurants, and public spaces that honour the land and commemorate residential and day-school survivors and children who did not return home.

The redevelopment is also slated to include a Governance House for the chiefs of the southern First Nations in Manitoba.

The Infrastructure Canada investment will help fund HBC building repairs and upgrades that reduce energy consumption and emissions. The PrairiesCan portion will cover the development and launch of Miikahnah Connect, a First Nations-focused workforce development app and redevelopment site preparation efforts.

The HBC endeavour is one of two adjacent major redevelopment projects on which the SCO is partnering with True North. The company, through its real estate development arm, and SCO have signed a memorandum of understanding to collaborate on the Portage Place project.

Like Wehwehneh Bahgahkinahgohn, the Portage Place Project is slated to include numerous multi-family residential units, including affordable housing, and mixed-use spaces.

True North’s diverse ownership interests include the Winnipeg Jets of the National Hockey League.

The two redevelopments have a total projected cost of $850 million. True North and SCO have pledged to prioritize First Nations inclusion in advanced education and skills training and memberships.

Pictured: Future redevelopment of the former Hudson’s Bay store in downtown Winnipeg.

Rendering: Southern Chiefs’ Organization