EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
I think we were told at the time that process would be looked at in this particular lease because of the size of the lease over that time.
You know going out for an Expression of Interest or Proposals going out. Why when I am pretty sure that’s what happened a couple of years ago; why didn’t that happen.
Community and Government Services did a review of the cost of construction assessment in the order of $18 million for a new building.
Mr. Chairman, I would like Deputy Minister Pam Hine to add to that please.
As the minister said there has been...we looked at options and looked at the construction of a new building and the availability of the existing lease that is currently in the community and also what the needs were of Government of Nunavut departments for space allocation. We found that this decision was the best that we had given the current circumstances and the financial situation of the government.
I know two years ago when we were talking about this I believe there was pretty much only one individual, the poor guy that had to try and put all this stuff together and deal with it.
One of the concerns that I raised at the time there was, “Do you feel that there are adequate resources dedicated to that to make sure that that gets done?”
One person at the time can only do so much.
If you look at the contracting and leasing report that’s tabled there the volumes and volumes of leases that must have to be looked at and the amount of work involved in doing each one of them.
Are they doing anything to try and beef up that area within your department so that it gets the attention that it deserves?
I would say that in looking at it if there is one person doing this there is a lot of undue stress and work on a single person to be able to do.
Again, the deputy minister will respond to that.
Ms. Hine
Ms. Hine: Thank you, Mr. Chairman. Again, the member has raised a very good point.
The property management or property division under Community and Government Services has gone under a number of changes over the last few years. And staffing continues to be a challenge for the department.
Back in 2002, the department centralized community leases from the regions into the headquarters so that we could have consistent administration of our leases.
In 2004, there was the merger between Community Government and Transportation and Public Works and Services. Also at that time some of the staff housing, which was under Public Works, went over to the Housing Corporation.
So we have been in a bit of an evolution. We are trying to build up staff.
Currently we have approximately one and a half full time equivalents; one and a half staff that have been assigned to leases. It isn’t sufficient at this point and we are reviewing that.
We also encourage the staff to take courses in leasing. I am not sure if it’s any reassurance for the members but in my background I am a certified property manager, and a certified leasing officer, so I will also provide some dedicated time towards this file.
We are on page J-11.
It really falls into the mandate question of the CGS.
CGS is probably one of the biggest departments that have to deal with real estate issues, and real estate properties; including leases and negotiating.
Why would you choose to believe that the sole sourced existing contractors is the best route to go without checking to see whether or not there exists a market in this place.
I had believed that we were truly on the path to a competitive real estate market concept in Nunavut.
I have heard many times that aside from Iqaluit, Rankin Inlet, and Cambridge Bay, we’re at that threshold.
Where that market did exist to go through, to go towards the private enterprise for the facilities, and so on, that communities well versed into the 3P concept and tremendously strong supporter of this 3P concept.
I don’t think the community failed in that regard, whatsoever. I now believe the government, CGS failed completely.
I don’t see any expertise whatsoever in terms of financing deals, as well as assessing real estate needs, market evaluations, and so on.
I would like to ask the minister, having gone this far, that you will table this construction assessment.
I think it would be shameful if we didn’t see a copy of that, otherwise we will not be able to assess whether you are really qualified or not because private financing is certainly not impossible; it’s at the doorstep of any businessman who have a proven record to build.
And I think you truly did not represent Nunavummiut all that well by going on a sole sourced route in spite of the fact it’s an attractive way of being offered such a route; any company would like to be accorded by any government for sole sourced negotiated contracts.
But let me tell you, it violates all the principles of free enterprise, it violates your contracting regulations, and I believe the Auditor General will be very much interested in looking over this deal to see whether or not you’re getting the best value for the money that the public of Nunavut are being asked to carry for the next 20 years for a facility that is not worth that much.
So having said that, I would like to ask the minister: will you abide by the contracting regulations, unless there was a provision to enter into a negotiated contract?
I believe all the leases that the government has had an option to renew for a certain period, if not, you are obligated to put forth a notice to the public that the competitive process will be used.
I don’t believe that you have done justice, minister, by going sole sourced before finding out, I can hear you, you say that this was the best value for the money that we don’t have but all the practices of any way of finding out whether the best value was achieved are normally not done by sole sourced approach.
The Auditor General will tell you that you must go through a competitive process in order to find out and compare whether you’re getting the best value for the money over the 20-year period for any projects.
So will the minister tell me why they chose to honour one provision in the contracting regulations and ignore the competitive process available, and it’s available to you.
This issue about the EDC leasing, it goes back to September 2005. We’ve been working on it back and forth, and we had the direction from the FMB to approve that; the approval came from FMB.
I would like to say that all options were looked at in that community and to find the magnitude of that building was hard at the time because there’s over 100 employees in that building, and five departments, I believe, are in there.
We have to make sure they are all accommodated.
And I will, as the member asked, ensure contracting procedures are followed in the future. Yes, I will do that. I would be willing to table the Cost Benefits Analysis when they are available.
I believe that since you alluded to the construction assessment which was the basis for deciding whether or not sole source proceeded, it’s probably already available and I would appreciate the minister’s answer that you will table that report.
The other thing that I would also like to say, not only the general contracting procedures, in my view were not honoured by going through this route.
Also, what was violated also is the fundamental Article 24 of the Nunavut Land Claims Agreement.
Article 24 provision states very clearly that the government will make every effort to allow Inuit to take part in a competitive process and I believe any Inuit company who sees this agreement can actually go through a legal route now.
So you may not, it may be advisable to not sign that deal until you have stated that you are going to put out a notice that you say that you are going on the negotiated route.
In the last year before the NWT was divided, the policy was accepted by the public works government at that time in NWT that even with the sole source route, if they prefer to go through that the government had a policy they accepted would say they would put out a notice that they have a Letter of Intent to enter into negotiated contract with the company and they gave out a two-week notice.
Why did you fail to notify Inuit competitive publicly that you are going through a negotiated contract route on this lease?
Mr. Rafter will take that question please.
It may be beneficial, in fact, to review the leasing of real property policy and incorporate some of the member’s concerns, and update the policy itself.
It has been some five years since the policy was actually written and drafted and typically this government reviews and updates its policies at minimum every five years.
I know the sincerity of the minister and deputy minister; they’re trying to work the best deal for Nunavummiut.
But when I was involved in the drafting of Article 24 and the subsequent policy documents that both governments had, because I was advised that it gives a fair basis for them to play ball with you guys, in this case, no, there was nothing and that violates all the provisions. It is really quite amazing that our own government would do that.
I have a motion that I would like to introduce regarding this process and I wonder, if it’s appropriate, I would like to circulate it before I move it so that the members could have it.
I will give you a few minutes to look at the motion.
Committee Motion 002 – 2(4): Recommendation to Modify Government of Nunavut’s Leasing Policy (Curley)
Chairman (interpretation): Now, that you’ve seen the motion.
I move that this committee recommend that the Government of Nunavut more fully comply with the spirit of Article 24 of the Nunavut Land Claims Agreement by enhancing the transparency of its leasing practices through an amendment to the Government of Nunavut’s Leasing of Real Property Policy to explicitly require that prior to enter into or renewing commercial leases, a public tender or a request for proposals takes place in all circumstances. (interpretation) Is that adequate?
Chairman: Thank you, Mr. Curley. The motion is in order.
Every member has the right to speak once to the motion for a total of 20 minutes. The mover of the motion speaks first. The mover of the motion has the right to the last reply, which closes the debate.
I think most of the speakers, on the issue of leasing, fully represent their constituents, not only that but the requirements of the government to comply and comply with the contracting regulations.
But we have a modern-day treaty, I believe, with the Article 24, which really quite enhances the traditional contracting regulations and financial management instruments in negotiating any contract or leases.
So what I’m trying to say is that we have come to this point where we are in a bind because the government says there is no competitive companies, in particular communities, for this type of thing.
I think if we were all vigilant, I believe that real estate property people, they would have known a year ahead that this lease is about to expire now. There’s no option to renew, so let’s put it out to public tender but someone failed to really knock on the door and say caution.
So in order to prevent that, the motion is clearly; again, I think it provides a notice to the government that it is not acceptable for the minister or the Cabinet to proceed with negotiated contracts without considering all the other options.
I believe that if we’re going to have a strong free enterprise spirit in communities, and the relationship to develop further with the government, we must allow the free enterprise, the real estate companies to compete; at least provide an offer. In the end, you may buy the old, used facilities but give them a chance. That’s what the transparency requirement of the motion is stating.
I would like all the members, including the Cabinet Ministers to vote in favour of this motion and we are asking for a recorded vote on this.
I have no more names. Ok.
To date we have done our utmost to fulfill our obligations from the Land Claim Agreement.
Unfortunately at the time leasing was not covered in the Land Claim Agreement under Article 24 and Nunavut Tunngavik Incorporated has not approached us to cover leases.
We cover contracts and we do an annual review of the policy to make sure that these are put into consideration with the annual review process so we’ll be abstaining because we have to look at this carefully.
But at some time I undertook along with my Cabinet colleagues this morning to do an extensive review of all the leases; the long-term leases that are going to expire in five years, that there would be no discretion but it would go to an expression of interest process before the termination of any lease.
So that is what I undertook to do and that is what we’ll do so that we provide for a competitive process and we agree with that.
So we will adjust our policies accordingly.
I thank my colleague Mr. Curley for putting this motion before us today.
It is very important in my mind that we do have a Leasing of Real Property Policy that is unassailable and can comply with all that we stand for here in the House.
That we get good deals for our limited resources and that the process is transparent.
That we have accountability throughout the process at all stages of what’s outlined within the policy. That it is equitable to all business, organizations wherever they are in the Nunavut, any community across our great territory.
I don’t think that the government should expect that the MLAs are going to simply rubberstamp anything that comes before us just because they’ve got themselves backed into a corner.
Government is elected to govern.
They have to look at all the options. They know funds are limited.
We didn’t give them a credit card to simply go out and sign long-term expensive leases that are going to commit us to much more than the cost of a new building.
We have to get bang, big bangs for our bucks nowadays.
We also have to take into considerations that many of the buildings that are involved are old wherever they are in Nunavut, they are old. We have a responsibility to our Government of Nunavut employees to provide them with modern facilities. We all heard of the sick building syndrome that affects employees across the world.
We have to provide our employees with buildings that are modern, that are conducive to a positive working environment.
The buildings may be good now but if you add another 20 or 30 years onto most of those buildings, as the case may be, you know we are going to be incurring more money at that time to either upgrade the building, or buy the building, or construct a building.
I want to ensure that we are in fact, as the minister said, getting a good deal on leases whether they are being negotiated or being reviewed and for that reason I’ll be supporting this motion.
I would like to actually thank my colleague for bringing forward this motion and the comments that have been made including those made by the Premier in committing to following through to what they said they were going to be doing already anyway on these leases, especially this particular one.
I believe that that commitment was made a few years ago and then forgotten about.
So if we can get it in there that they all have to go through that process I think that it’s better for everybody: a lot more openness, accountability and transparency within the government.
And the view from the outside, too, that the private sector will feel that they will have an opportunity to express some interest, if they so choose to do so.
When you have cases like this where you just sole-source negotiate with someone such that no one else even gets a sniff of that.
I don’t know how much that building cost in 1986 to build but my guess is that it probably cost $3 million or $4 million, and if you look at the leases it’s going to be between $40 and $50 million that has been paid for by the end of the 40 years; a pretty darn good return on an investment, if you asked me.
I think that’s one of the concerns that the Auditor General raised.
Is that the best use of our resources?
I think that’s why going to a more open and transparent process that we will be able to, beyond a reasonable doubt, tell the Auditor General and the public out there that, “Yep. Look that was the best deal that we could get, and here is all the information.”
That question is there. Is it? Or isn’t it?
We don’t know, because no one else had the opportunity to submit a proposal or anything on it.
Is it a better deal than what we had? I’d say anything would have been a better deal than what we had on it.
But is it the best deal?
We don’t know because it never went out there for public input. I think that’s important with our limited resources that we’re not tying them up in long term leases when in fact we may not have to.
This could be a way of ensuring; if that decision is made, that we know 100 percent for sure that it’s the best deal that we could come up with.
But without that process going in there, putting it out there, we’re just guessing.
For that reason I’ll be supporting this motion and I would encourage everybody to support it, instead of just abstaining.
I would like to thank the mover of this motion because I believe that according to my understanding that Inuit Qaujimajatuqangit we all know each other and we never hide anything from each other, especially when you go out hunting.
Amongst Inuit men that you do not hide any information; you disclose all the information to everyone. If there are animals on that side we have to inform everyone.
So that’s our traditional way of doing things, Inuit Qaujimajatuqangit, which our Nunavut Government has been stating that they would like to incorporate Inuit Qaujimajatuqangit and respect it.
For that reason I am in support of this because it’s not going to hurt anyone out there and it’s not going make anyone miss out on anything. So we would like to provide spaces for our employees. If we did things properly there is going to be no fighting, or no concern.
When we do things behind people’s backs, the public is not happy about that.
So therefore, I’m going to be in support of the motion.
Years back prior to the Nunavut Government being created, the federal government used to make their decisions without any consultations or input of the Inuit.
For example, the dog slaughter days. So it really had made Inuit suffer.
So now, Inuit are taking part in these works and they’re taking part in the decision-making, so it hurts us less.
So therefore, for all those reasons, I would like to be in support of this motion because the public has the right to know what is happening with us. When you don’t know anything about something and when you finally find out, it hurts many people in Nunavut.
I’m sure there have been concerns for a long time when the government starts working on leases and I’m sure the public out there would like to take part in the request for proposals.
Even though we might use the same facility, let’s put it out in the open.
If it’s the best way and if it’s cost-effective, then I will be agreeing to it.
I wish to inform the committee I have no more on my list.
Does the mover have a last reply?
Mr. Curley (interpretation): Thank you. I would like to thank all the members who made their comments to the motion.
Just to point out further, I am sorry to move this motion but I had no choice.
(interpretation ends) Mr. Chairman, the reason I wanted to speak and make a comment is that I know for a fact during the early 19th century we were naive in dealing with commercial trade, particularly Inuit, but not today.
We’re not naive that Article 24 does not include leasing. It includes all contracts, including service contracts.
It does not specify what kind of contracts; it tells us all contracts. We’ll leave that definition to the courts.
In the end, I would like to thank all of you; certainly, I hope that the government will use this mechanism, this notice to improve its communication requirements because if the exercise were to be taken by a proponent that may have not been given a chance, it could become a lot more costly if we’re not careful.
So I would like to thank all the members who are supporting it and (interpretation) I will conclude with that for now. Thank you.
That closes the debate on this motion.
All those in favour, please stand, and once I have called your name sit down.
All those opposed, please stand, and sit down when I call your name.
All those abstaining, please stand and then sit down when I have called your name.
Thank you. Okay.
For the motion: nine.
Against: zero.
Those abstaining are seven.
Ms. Brown, you may go back to the witness table and carry on with the debate on main estimates.
We are still on Page J-11.
I agree with you; it’s government services.
I thank the minister and officials for returning today.
I wonder if I could follow up the line of questions from my colleague just to clarify some information.
The minister mentioned how much it would cost to build a new building to get an assessment.
Could you clarify that number again that you mentioned earlier?
I will turn that to Mr. Rafter to answer, please?
The number provided by the departmental officials for constructing a facility of similar size and use with improvement, tenant set-up was in the order of $18 million.
The minister mentioned earlier that there was a 20-year lease, 10 years, and 10 years.
Why did you not go for a five-year lease or a 10-year lease?
I will have the deputy minister to answer that please.
As mentioned earlier the proposals went forward to the Department of Finance for cost benefit analysis and based on the information it was determined that the 20 year lease was the best value for money and in addition, as mentioned, over the 20 years we actually own the building at the end and that was also taken into consideration in the cost benefit analysis.
I thank Ms. Hine for that answer.
Can the minister tell us, did you approach the landlord to ask if they would be interested in a five-year lease?
I would like Ms. Hine to continue with that answer please.
Yes, we did talk to the landlord and they were not willing to provide a five-year option.
It was based on the fact that there were large amounts of improvements that had to be done on the building, $2.2 million, and they felt that the amortization of the repairs over a five year amortization period or lease period would make it too costly for the government.
I thank the minister and Ms. Hine for that answer.
Could the minister or Ms. Hine tell us what would happen in the event the government chose not to renew the lease on the landlord’s terms?
If we should choose that, or if we get a direction to go the other way, I think there would be legalities involved because there’s a letter of intent already in place.
Could you clarify what you mean by that there could be legalities involved?
I would like to ask Ms. Hine to answer that, please.
As the minister said, there’s a letter of intent that has been offered to the landlord.
Should we now stop negotiation, there could be a legal ramification should it be shown that the letter of intent is a binding contract.
I thank the minister and Ms. Hine for that clarification.
Can the minister clarify; have you sought legal opinion on whether that letter of intent is binding on the Government of Nunavut?
No, we haven’t yet.
Could the minister clarify: have both parties signed the letter of intent?
The last question I think I made a mistake.
I think what I will do now is I will ask Ms. Hine to answer that.
Yes, the letter of intent has been signed by both parties, therefore making it a binding contract.
So we would have to take a look at further legal implications should we now back out of negotiations.
I thank the minister and Ms. Hine for the answer.
Earlier the minister mentioned that a lease/buy analysis had been completed.
I would like to ask the minister if she could provide the Members on this side of the House with a copy of that lease/buy analysis. Thank you, Mr. Chairman.
Ms. Hine will respond to that question, please.
Chairman: Thank you, Minister. Ms. Hine.
The lease/buy analysis or the cost benefit analysis was completed by the Department of Finance. We can certainly talk to the Department of Finance regarding the member’s request.
Chairman: Thank you, Ms. Hine. Mr. Peterson.
Could I get a bit of a firmer commitment from the minister?