EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
But, to me, the reality is, if I’m doing the math correctly, we had $200 million originally given to us for 725 houses and then another $100 million given to us for 286 houses.
From that, we were told that these houses were supposed to be delivered.
Now there is another $110 million that we’ve had to find within the departments of the government.
Obviously the 3 percent that has already been given by different departments is hard to take in terms of budgets that are already tight to begin with.
Now with the other $110 million on top of the $300 million, that’s $410 million that we are spending on these houses.
Again, we want to see these houses built, we want to see Nunavummiut living in these houses and get rid of overcrowding.
As I mentioned in my comments, it’s sad that it doesn’t actually scratch the surface in terms of the overcrowding that we do have in our houses.
But at the end of the day, that $110 million, and the minister did allude to us trying to forget about it, it’s hard to forget $110 million when, initially, the Nunavut Housing Corporation was telling us that they were going to be able to build 286 houses for $100 million.
So, in my way of thinking, if things were managed properly, if proper ordering was done, if everything was done in the way that we were told as regular members was being done properly, we should actually, in essence, have an extra 286 housing units constructed to provide to Nunavummiut and have those people living in those houses now.
To me, that is what is upsetting regular members and that is what is upsetting us on our side in terms of being told that everything is fine and then finding out afterwards that it’s not.
To me, it’s not a witch hunt, which some people are saying, it’s not laying blame, it’s making sure that we can finish the houses that we already have.
Some of the houses, we are being told, I think it was 60, if my memory is correct, that are going to be completed and finished, and then there are going to be 110 that are going to be framed in and then, obviously in stages, we will complete those and eventually put people in the houses.
That leaves another 115 that are sitting empty where they’re in crates. As the report points out, theft is one of the things that they mentioned as a big concern, which I don’t think and, as I ask questions when we’re doing the questions, I don’t see that as being the issue. I think it’s just the way it’s presented.
To me, Mr. Chairman, those are the issues, I think, of what we’re trying to find out today.
One of my questions to either the minister or the current president is it seems to go back to, as Mr. Okalik was asking a couple questions there, the idea that we are under new management, but I don’t know.
To me, if I was the president or if I was a minister, I would want answers and I would be concerned.
It seems like no one, even within this report that we received, picked up the phone. The auditing firm that was hired from the south had no problem with picking up the phone and calling Nunavut and incurring long distance phone calls to ask questions of people.
I don’t know why they couldn’t have picked up the phone and made almost a local call to the former president and just say, “Could you clear up some of these questions for us?”
If the former president’s office was anything like my office, maybe those initial prices for what it was going to cost to build these houses are hiding underneath a pile of paper or something. I’m not sure where they ended up, but again, no one has asked where they are.
My first question is: what is it going to take to raise the concern level of the corporation to have it raised high enough to have them check into these matters?
As I indicated the other day, to be frank with all of you, even my colleagues, we will answer the question, but it doesn’t guarantee that you’re going to be satisfied because that’s for you to determine, not me.
You have made a lot of many… what would you call that? You say questions need answers.
Some of them have been answered.
I told you and I stated the choices of the previous administration and the corporation three or four years ago made wrong investments, and they did not accurately provide the information necessary to the government of the day.
They walked on top of it and they never saw it coming. I did when I was sitting on your chair on that side.
During 2006, the tenders for marshalling were all over the place, and one failed and had to me moved during the middle of the winter, which resulted with the Illamar set up being structured.
I indicated to them that if the corporation at that time were in the private sector, they would have been fired. Mr. Okalik certainly remembers that; he alluded to that to me personally the other day. Indeed, I saw them coming.
The costs were eventually going to skyrocket. Eventually they are going to come out one day and we’re going to suffer from it. When did we start actually seeing the figures?
Not from the previous corporation, previous Crown officials who are no longer employed, by the way, but the blame goes directly to the current administration.
The morale of them currently right now is suffering because of the statements that are continuing to be made in this very powerful institution to undermine the work being carried out to complete the units.
There are two reasons that I want to indicate here. One is that the trust, by and large, had a deficit that is difficult to explain, obviously.
I think we should reflect for a minute that the rules for tendering and awarding contracts were based on the contracting procedures that were used and continue to be used in some cases, not so much by the Nunavut Housing Corporation now, that allow for a tremendous amount of import labour.
When you have a huge import labour, the cost is greater because the accommodation costs are huge.
They were obligated to use hotels, and these are not cheap these days.
So the labour cost provision sector has been a tremendous reason for the costs, plus some of the wrong investment that I alluded to earlier, which we cannot explain.
We can try to explain, but no one nor me will be satisfied with the choices that the previous administration and the Crown corporation made at that time.
So what we have done so far is have been granted permission by the FMB that when evaluating contract tenders and RFPs or negotiated contracts, that provision is one area be considered to use either existing housing or, by all means, cheaper accommodations for import labour.
Also, we have been granted the maximum local employment.
In terms of the budgeting issues, I just want to indicate to you that there are approval requirements that we are obligated to carry out under the Financial Administration Act as well as the Auditor General’s continuing direction that we have the approval of the funds first before we spend.
I don’t believe today that we have received approval for extra costs that we have identified to spend them.
So you may be wondering, “Why aren’t they being carried out beyond December 15?”
Have you granted us permission to spend the money or allocate the funds?
The question will be, “Have we submitted it?”
I alluded to that the other day. It’s the scheduling issues at the cabinet and we have been under pressure to handle all of this.
There are processes involved which we can’t just walk all over.
So we will try to respond, but let’s be fair. The comments that are being made by very powerful individuals or this Assembly undermine continually the good work that the Nunavut Housing Corporation and the district offices supervising projects. They are feeling the impact.
They too are human beings. They too have feelings. They too feel when tabled documents with names on them are being splashed around all over.
Their privacy rights may have been impacted.
If I have done that, I would apologize for them.
I will now apologize for some of my colleagues tabling the documents without having to explain it outside of the House.
I see too and wonder why they were not included in the discussion document, which would have given us an opportunity to respond to them.
We must be careful. We will explain, but let me say that this is a conflict issue.
Are we taking measures to resolve some of them?
Yes. It’s this current executive from the Nunavut Housing Corporation that has provided the details and had them confirmed by the auditor. There are problems, and they want to address them.
Steps have been taken to better control financing and budgeting, and the project management has to sharpen up so that they carry out projects. Will it satisfy my colleagues?
I cannot guarantee that, as I said a couple of days ago.
So I’ll let Mr. Barriault, Mr. Chairman, explain some of the detailed questions on that.
As the Chair, I wish to comment before we break for lunch.
The standing committee is simply trying to get information as to what was incurred by the Nunavut Housing Corporation when it came to an over-expenditure of money rendered through the Nunavut Housing Trust.
If the local housing organization over-expended, I am sure the Nunavut Housing Corporation would be quite curious as to where the over-expenditure occurred and would be asking questions.
We are simply trying to do that here.
As to the good work that the minister keeps referring to by the past Nunavut Housing Corporation, I am sure there were good workers.
Hon. Tagak Curley: Mr. Chairman, I responded to some of the general statements that were made.
I am not at all questioning your role as the Chair. I think, in my view, you should be doing exactly that.
I was given an opportunity to respond and I had to because there was a reference to the members on this side maybe doing a witch hunt or something.
No one has ever alluded to that. I try to refrain from it.
In fact, I’m trying to lay out a history of how the cost escalators that should have been known were ignored.
I promised during my statement that we will respond to questions.
I think, in my view, to try and indicate to the House that we are not prepared to respond is really out of question.
Before we break for lunch, we will continue on at one o’clock, but I would also like to state for the record that although there has been expression on good work done, I also would like to publicly state that there was a $110 million blunder.
So we will break for lunch and come back at one o’clock.
Food is being served upstairs. (interpretation) Thank you.
>>Committee recessed at 12:08 and resumed at 13:01
Chairman (interpretation): Thank you. We can now resume our meeting.
Thank you. We now have a quorum.
Mr. Elliott was making some comments and we will continue from there. Minister Curley.
Just before we left for lunch, you had touched up on the $110 million cost overrun.
We can respond to that question and we wish to provide responses. That is why we have appeared before the committee. There were some ongoing questions about the circumstances prior to this government taking on its mandate and many of the questions revolved around these decisions made beforehand.
We will be responding to the issues you voiced.
We are not trying to hide anything nor are we camouflaging any issue, neither at the cabinet level nor at the FMB. We have agreed that we need to provide explanations on this matter and that is why we are in front of you.
Furthermore, we are here to also talk about the auditors’ report and that is the reason why we are appearing before your committee. Thank you.
Mr. Curley has made a mention to the previous administration and it was the previous administration that put the current president in place. Since he has taken over his position as president, has Mr. Barriault been in contact with the previous president of the Nunavut Housing Corporation?
He alluded to my statement.
I don’t recall actually saying that the current president was appointed by the previous administration. I never alluded to that. If he wants to clarify the question, I can try and answer it.
Yes, I can clarify the question.
My question is to Mr. Barriault. Has he been in contact with the previous president of the Nunavut Housing Corporation?
Yes, we spoke and the last time, I believe, would have been in December, shortly after I had been hired in this capacity.
During those discussions, was the Nunavut Housing Trust discussed?
Mr. Barriault: I can’t recall the exact details of the discussion.
This is something that would have occurred nine or ten months ago, I guess, now.
In general, I was assuming a new position and we just spoke in general about the operations of the Housing Corporation.
So at that time, the former president gave no indications of any concerns or problems, things to look into possible overspending? That never came up in the discussions.
No, that was not brought up specifically.
There was no indication at that point that there was a large budget problem as we later found out.
So, as of last December when you last spoke to him, there was no passing on of the reigns in terms of “Maybe this is a concern in terms of ordering.
This is the way we are doing business within the Housing Corporation for the housing trust. This is the person in charge of different aspects in terms of hiring people, hiring contractors, doing tendering,” it was just, “I’m out of here. Have a good day and good luck.”
I am just curious. I don’t know.
It is a $200 million project, and you start a new job. When we became regular members and started with the Nunavut Leadership Forum, we came down and were given an orientation as to what our roles and responsibilities were as regular members.
We were given different workshops on how to handle press and media, and different things like that.
Were you not given that type of an advantage to be able to do your job?
I did not go through any formal orientation as such to the nature that the member has mentioned.
There were quite a number of Housing Corporation staff in place at the time who informed me as to the status of various projects and ongoing operational issues.
So as of December of last year, as things have started to unfold, questions have come up and issues are being brought forward in terms of how things were done, and as the minister had said in terms of previous administration doing things in certain ways, you never felt inclined to pick up the phone and ask for some guidance from someone who had experience from the past.
As the issues were uncovered, it was fairly clear or apparent to us as to what the problems were.
We know there were budgeting issues, we knew there were financial tracking issues, and those are the things that we knew how to solve and bring forward. It’s a process that we are going through currently.
We are still at general comments, Mr. Elliott. Questions pertaining to the tabled documents before us can be asked.
Perhaps, Mr. Elliott, do you wish to further comment?
In terms of the tabled documents, I’m sure that they are being tabled with the minister.
Before we get into detailed questions about specifics within them, could the minister comment on what he feels in terms of the validity of these, whether more work needs to be done on them, whether there will be follow-ups on them and possibly in communication with the Auditor General? What will be done in terms of next steps?
If the member is alluding to the finance controls, personally as a minister, I’m really not involved in the operation or aspects of the corporation.
I am satisfied that the corporation currently has a number of work plans that they have prepared, as well as responding to the audit report, which is a tabled document.
These are very specific recommendations that are being made.
I believe if the questions are raised with respect to the operational issues, including finance and projects, the corporation and staff are ready.
As a political, responsible minister, my role is to coordinate anything that requires policy issues, particularly with respect to FMB and the cabinet.
That is where my role comes in.
Earlier this week, the minister basically was hoping that we wouldn’t bring up the report anymore.
This morning, he was kind of alluding too that we shouldn’t be on a witch hunt.
Well, we’re not a witch hunt, but we would like to find out what went wrong, who was involved with in when it went wrong, why did it go wrong, and how is it going to get fixed.
Basically, going back to the SIP units, my understanding is that it was going to take about 300 man-hours away from northern labour if the SIP units were built in Ottawa.
That should have made it a lot cheaper because you don’t have southern employees coming up north, staying in hotels, and that.
Also, when we were mentioning that it costs $525,000 per unit, you were stating that single units are more expensive than multi-units, but I have to let the minister know that only half of these were SIP units, the other half were multiplexes, and this is the average figure if you take all that into account.
My question is: why is it so expensive?
I appreciate the member reminding me. I have not remembered whether I had suggested that the members forget about it.
The members are not prepared to sometimes take on the sense of humour that we should be exercising a bit more occasionally.
Maybe we should have an indicator of some sort to say, “This is a joke,” or something, then maybe we would understand it.
Honestly I would never do such a thing. A member has integrity, so do I, and I respect that.
In terms of the details, we certainly will want to get to the bottom of it and members have indicated already that they may not get a satisfactory response.
That part is not my responsibility to suggest, so I’ll have the president respond to the details.
As we had noted when we first brought forward the costing issues with the Nunavut Housing Trust, there were a number of factors that had not been considered or adjusted for in the delivery of the housing trust.
That included escalating costs, basically inflation from year to year.
Another strong factor within all of this is what the market demands in terms of pricing.
We can think that it should cost less to build a SIP house, for example, as Mr. Schell has noted, because of reduced labour content.
However, we cannot control what the tender prices are.
So our revised estimate on the affordable housing units is based on trying to reflect more closely what the market is demanding.
There were only 12 five-plexes that were completed and the price on those 12 five-plexes was a reasonable price, and that’s why they were awarded.
The rest weren’t awarded. My question is: what did they use for a figure to completing them? Did they use the same figure as they awarded those 12 or were they double the price when they estimated how much was the cost to finish them?
In looking forward on the estimating, we have used what are reasonable figures for the different types of buildings and we have taken into consideration other factors that have impacted our costs as well, such as land development costs.
So there have been a number of factors that have impacted on the costs.
As I mentioned land development, in many communities now, lots are no longer available within the developed part of the community and lot development costs are being brought forward and passed on to whoever is building.
So we may have gone from $150 a year, for example, land lease on an existing lot to suddenly being faced with a $75,000 lot purchase.
These kinds of costs do impact the overall figures.
Did you want to expand, Minister Curley?
Hon. Tagak Curley: Mr. Chairman, I would like Ms. Kimball to actually respond in detail in terms of figures.
In terms of preparing the $150 million estimate for the whole, we have revised the estimate for the SIP project. We actually looked at the historical costs in each community.
Some communities have more costs, the airfare to get there can be more, there are varying costs at the hotels, etcetera, plus there are different historical costs in terms of the cost of the contractors in each area.
So these costs reflect more on what we expect we can get in each community.
We looked at it individually, per dwelling type and also per community basis, and there is a detailed schedule provided.
In regard to saying that, there was a regular lease at $150 a year and then they went to these equity leases for $75,000. These equity leases have been around for ten years, so I just don’t quite understand.
When you are building new units, you should have been aware that there were equity leases and they have prices in all of the communities.
Ms. Kimball: From what I can see in the original budget that was prepared for this, it was an average used across all communities and it was significantly lower than what we are now seeing as equity leases. Again, the revised forecast does have the details per community.
So it ranges from some communities where it’s a $250 annual lease up to I think the maximum we are seeing is about $67,000 in a given community per land lease.
So it’s a wide range.
Earlier on when Paul had asked a question or maybe it was Elliott, I can’t remember, you had mentioned that part of the extra cost, of course, is you have to bring southern employees down and they have to stay in hotels.
Now, half of the projects were completed by LHOs and, as far as I see in most of the communities, the LHOs or the Housing Corporation put southern employees in houses.
They did not stay at a hotel. I would like to know how many actually stayed at the hotels from LHOs and how many were actually in houses because my understanding is that most of them were in houses, actually.
If we look back over the life of the Nunavut Housing Trust, there were a number of different methods of delivery of the construction in different communities, so they were not always the same from year to year.
In some years, they were LHO delivery, as Mr. Schell has indicated. In following years in some communities, things were tendered publicly for contractors. There is quite a variety.
In order to try to determine how many hotel night stays, that would be a very intensive and detailed exercise over about a five-year delivery period.
There was definitely a variety of delivery methods and some included putting workers into staff housing of some sort, others through commercial accommodations.
My other question is on the methodology that was used when this so-called audit was done on the housing trust. My understanding is that they couldn’t find any documentation on the original budget process and different things there that could contribute to the shortfall.
I would just like to know what reference was made, as far as to the auditing firm, as to which NHC staff members they were supposed interview.
At any time, did the cabinet give instructions to try to question the previous NHC staff, which would be including the former president of the Housing Corporation?
Ms. Kimball: In terms of the audit, what we did is we met with the Auditor General’s office with some staff there as well as the Department of Finance and developed terms of reference in terms of what we wanted to achieve in this audit.
All of that was based on the ministerial directive that we received to do the audit.
We didn’t give specific guidelines as to who they should speak to.
We kind of let the audit firm take the lead as to who they felt they needed to speak to.
As far as I can recall, talking to the former employees of the organization was never discussed.
Going back to the SIP units, can the minister let the House know who actually designed the SIP panels in order to go out for proposals?
It’s my understanding that it was not actually a design so much as a performance specification.
So what was put out in the request for proposals was what the Housing Corporation wished to see as a product performance.
So designs, as far as the proposal process, were submitted and evaluated in terms of meeting that performance, as well as the ability to deliver on time, and a number of other factors, including cost.
Originally I brought up the question in the House if these SIP units were CSA approved. Apparently they weren’t, but they said that they were in the works of getting them CSA approved.
So my question is: were they ever CSA approved?