File photo (image credit - CFJC Today)

By Michael Reeve

RIH Renovations Over Budget Again

Ministry of Health to cover latest round of cost overruns at Royal Inland Hospital

Oct 4, 2025 | 2:05 PM

KAMLOOPS — When the B.C. NDP government provided its budget update last month, buried in it was a $33-million increase to the Phase 2 portion of the Phil and Jennie Galgardi Tower at Royal Inland Hospital.

According to the Ministry of Finance, costs for the Phil and Jennie Gaglardi Tower project, which also included renovations at Royal Inland Hospital – increased from $457-million to $490-million “to reflect revised project cost.”

It’s the second time that the project has gone over budget, as the original price tag was approximately $417-million. The Thompson Regional Hospital Board (TRHD) was asked – and it declined – to help fund the previous cost overruns, which the Province eventually paid for.

Last month, Mike O’Reilly, the chair of the TRHD, said taxpayers in the region will not cover this new cost increase, even if Interior Health asked.

“If we look back at the conversation we had with the last cost overrun, the position from the board is we commit ‘x’ amount of dollars for a project we have no involvement in the management of the project, we have nothing to do with so we shouldn’t have anything to do with the cost overruns,” said O’Reilly.

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“I think the position of our board hasn’t changed from that point and I think the ministry understands, Interior Health understands, that is where we stand. And that really set precedent moving forward for any future cost overruns.”

On Friday (Oct. 3), O’Reilly got his wish, as health officials said the cost overruns will be covered by the Province.

“The budget has required an additional increase of $33 million. The increase is 100 per cent funded by the Ministry of Health,” Dan Goughnour, Interior Health’s corporate director of business operations, said.

“IH is not requesting any additional funds from the Thompson RHD for this project.”

The total cost of the project now sits at $490 million, about $73-million over budget.

Groughnour said the increased cost is the result of increases in material and labour costs as well as things like temporary labour shortages and challenges within the existing building infrastructure.

“When you’re working with old buildings, you can sometimes come across things unanticipated, so need a little bit of redesign in the plan,” Groughnour added.

“I can say that, with the budget increase, as part of agreeing to the increase, we have locked price in there, so that should be it as far as any further increases on Phase 2 of the tower project.”

The TRHD has so far contributed about $172 million of the total project cost.

– With files from Victor Kaisar/CFJC Today