EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
However, because the work that has been done on the lease has now been completed, and we now have what we think and hope the final answer from the lawyers on those leasing issues, and because the situation with regards to other space now more clear in Cambridge Bay, and because our projections are now more firm, as the minister said we now feel we are in a position within a four to six month timeframe to give those final recommendations to the minister and he then to the Cabinet.
Mr. Rich had indicated that one of the things that they had to do was try and match up their plan with capital planning process of the government.
How does that process work?
I won’t say this particular lease, but any lease, where you’re looking at trying to include something into the capital plan?
What the process that goes through in order to get that done.
There’s several stages to the process, and depends a little bit on whether the facility is a facility that is being done for an individual particular department, or for a general office facility as this is.
Where it’s a general office facility such as this, generally Department of Community and Government Services is the led in terms of making proposals as part of the capital process, those proposals would then come to the ICCP which is the interdepartmental committee on capital planning where their vetted as part of the five year capital planning process.
There’s been a process in place which was allocated a certain amount of money generally based on historic analysis of needs by my department, or historic spending by department which allocates that, and as a result of that planning its fit into that process.
The situation, of course, changed a little bit a year ago, with the changing structure of the departments which realigned the capital budget process as a result of that.
So we’ve now re-established the average for the various departments based on the new alignment.
It’s an evolving process, because it’s a fairly complex planning process that requires multiple departments to be at the table.
Mr. Rich had mentioned the ICCP, I think that’s the acronym he used, when they make a decision on whether or not to include something into the capital planning, after they decide yes this should be on there, is that it, is it on there or what happens after that.
Well ultimately, the ICCP is the responsibility of the Minister of Finance because the lead department on the ICC planning process is the Department of Finance.
The ICCP is the body that doesn’t make the final decision, but reviews capital plans.
The capital plan decisions themselves are made by the Financial Management Board as it approves the capital plan.
So, then it would basically be the Minister of Finance that has the say on that, or has the clout as the chair of the Financial Management Board, and would bring that presentation forward to the Financial Management Board for decision and then it’s all prepared by the Department of Finance officials.
There are two avenues.
There are the ones that go through the Department of Finance and then they’re referred to cabinet and then from there they are then referred to the Legislative Assembly and once they’re included in the capital plans, it’s up to the Legislative Assembly to approve it.
It’s in the planning stages that they are referred to those entities and then referred to the Legislative Assembly.
I am familiar with the approval process of the capital plan after it’s been presented.
The process that we’re talking about is the other side of the fence on deciding what goes on that capital plan.
As regular members, when the capital plan comes forward, we don’t have any input into what actually goes on there.
It’s something that each minister and the cabinet brings forward and the departments bring forward.
They get together and draw straws I guess to see what goes on there.
I know that’s not the case, but you have got to have fun sometimes, to see what goes on there and then once it’s decided at the Financial Management Board and cabinet level, that’s what is going to be on there.
Then it comes forward to the Legislative Assembly as the government plan.
My question was, basically then, if the Minister of Finance as the chair of the Financial Management Board and her officials put that plan together and bring it forward for not this formal side of the sitting but the other side of the approval process, that that’s what they bring forward.
That’s what I was asking.
I guess I would characterize it slightly differently.
It is a collaborative process involving all of the departments that advance capital projects.
In that process the individual ministers will establish the priorities that they see for the component of the capital program that is related to that particular department.
In the case of Community and Government Services, we work with the minister to establish a priority list of projects that is advanced.
That priority list of projects has to fit into a budget envelope that’s available for us.
The interdepartmental committee of staff officials serves as a way to vet projects and to a forum where projects are presented and where priorities can be refined.
But ultimately still, the minister of the department is the one that has to recommend the priorities that come forward from that department.
Then, obviously they go to Financial Management Board.
I don’t sit on the Financial Management Board.
The Financial Management Board is a group that would decide that plan.
Mr. Tootoo: I have 21 seconds left. Thank you, Mr. Chairman.
It is still the Department of Finance puts out this budget envelope that you have to work with after approval from Financial Management Board.
To go back, this is something that has gone on for three years now.
It is a major lease and this seemed odd that a decision to come in before the six months of the lease finishing.
What other options really are there? Are we going to be just stuck with the situation that we are in?
To me, $1.1 million a year for a facility, one could call it highway robbery. What other options are there?
I’m really puzzled at why and how this could have taken so long to come forward and then have any resolve prior, where usually it’s anywhere from five to seven years ahead of time where these things are looked at and decided upon.
Now we are in a situation where we are going to have four to six months to try and do something and that is going to bring us into the time period of when the leases expired.
Are we going to be really left with much of a choice on this one?
It seems like something happened.
It seems really odd that such a major lease doesn’t have a plan well in advance with different options to look at.
I understand as the minister and his officials has identified where the complexities with this particular lease.
Just because they can’t figure out who owes who what, are we getting value for our money on this?
If not, what are we going to do about it?
Those are pretty simple things that could be looked at.
I really wonder why six months or less than a year from the lease being finished that we still don’t know what we are going to do, probably if the minister could respond to that.
It just scares me to think if something happens here is what makes me think when all of sudden we are in a major lease like this and nothing has been moving forward on it.
If I could just get a response to that.
I hear my colleague’s concern regarding this matter, the timeframe that is presented here.
I am glad that when they decided to do the analysis in 2002 that they did.
Also the arbitration hearing that concluded in November of 2003.
This is a unique situation for us because of the size and the complexity of the issues in this one.
The options are being, as I said, carefully reviewed now.
As I said the options will be brought forward in four to six months.
If the opportunity allows I would like to see that before that time is up too.
There are options in there that have been thought up and developed leading to this, which will be presented in the coming months.
Your time is up and I have two names on the list.
Thank the minister again for answering my colleague’s questions.
I heard a lot of comments from Mr. Rich and yourself about staff analyzing contracts since 2002, which leads me to ask the obvious question.
How many staff do you have in your leasing division?
We have 59 leases and I read in the list that there’s $82 million worth of lease contracts.
I’m wondering how many staff we have in a division that oversee, monitor and analyze leases on an annual basis.
Right now, we have Mr. Clark also with us.
Mr. Curley (interpretation): (no audio)
If I remember my colleague’s question about the number of staff, Mr. Clark is the director of that file and then we also have the assistant deputy minister who works closely with Mr. Clark.
There is also a staff person under the director for the leases for monitoring these leases.
Chairman: Thank you Minister Kilabuk.
Mr. Peterson: Thank you, Mr. Chairman Thank you, Mr. Minister.
Did you think that you have enough staff within that division to oversee all these leases and the $82 million value?
In response to my colleague, I want to go back to my earlier comment about wanting to make improvements and the development of more programs to be able to share and bring forward simplified reports and processes.
It depends on the year, if there are a number of renewals or analyses and options being developed.
Up until this point, there really is no great big pressure for additional staff, however, additional staff is always beneficial to our director.
I wanted to ask about this one contract.
The lease in Kugluktuk for the hamlet of Kugluktuk, it’s in Note 4, it says the annual value is $1.00 and Note 4, all it says is $1.00 per year.
Could you clarify what kind of lease that might be?
Sharp, bright colleague of mine.
This is for the use of space for the Department of Justice Correctional Centre which is from the Hamlet of Kugluktuk.
Mr. Peterson: I thank the minister for that response.
Is that for the new correctional or justice facility that was opened earlier this month by the Minister of Justice and my Kugluktuk MLA colleague.
Hon. Peter Kilabuk: Yes it is Mr. Chairman.
Another lease that I wanted to talk about or ask about is the Arviat Health Facility.
It is leased here for 20 years, $859,185.60.
Over the 20 year lease period, it will cost the Government of Nunavut $17 million and change.
I believe it was a P3 project.
I’m wondering if perhaps you or Mr. Clark could explain how the P3 project was structured.
My colleague is quite right.
I’ll have to get Mr. Clark to explain to him how the P3 was established.
In my participation at the cabinet level, this was an opportunity that had presented itself and was considered by cabinet at the time.
I will ask Mr. Clark if he has anything further to add to that.
I don’t have anything to add to that at the moment.
That was turned over to the Department of Community and Government Services after it was accomplished.
We handle the administration of the lease right now, but as a P3, it was not handled, I believe it was handled by the Department of Finance and the Department of Health and Social Services.
Thank you, Mr. Clark.
Could the minister or Mr. Clark indicate whether the health centre will be owned by the Government of Nunavut after the lease expires.
No, my notes tell me that the Government of Nunavut will only own the equipment in April 2006.
I will ask Mr. Clark to add further to my response to Mr. Peterson’s question.
As far as I am aware, no we will not own that building at the end of it.
Again, I am not that familiar with this as a P3, so I would have to get back on that.
I thank the minister and Mr. Clark.
I think we’ll have time over the next couple of days to get back to that particular lease.
I want to follow up on a question that my colleague from Rankin Inlet asked earlier about the health facilities in Cambridge Bay.
I don’t think Mr. Rich gave a clear answer on that.
I think he said one is owned by the Government of Nunavut, there’s a decision to be made on another and another is under discussion.
Could I get a specific answer to the health facility in Cambridge Bay.
Has a decision been made to lease it or will they buy it.
The decision was made to not enter into a lease.
It is probably confidential but is there any information available about why you made a decision not to lease versus the decision to buy it.
What kind of external factors were you working with to lead to make that decision?
We did the type of analysis that outlined the leasing policy, which is an analysis of lease versus purchase, costs factors and other advantage factors and based on the cost of the lease, it was decided not to lease it.
Could the minister tell us what the Government of Nunavut’s current position on the use of P3s in its capital planning process?
I think my colleague, the Minister of Finance, would probably be in a better position to respond to the questions at this time.
When it comes to P3 options, there is always an option to consider that, but at the end of the day it has to be to our advantage to enter into a P3 arrangement.
In the past, that of course had been taken with some projects.
Currently there is always an option that is available to us.
We haven’t made a decision not to continue with that.
It is an option that is considered on a regular basis or depending on the magnitude of the project, if it is to our advantage, we will consider a P3 arrangement.
Chairman: Thank you, Madame Minister Aglukkaq.
I think most of us recognize that and my colleague again from Rankin Inlet put it very clearly that we will never to be able to construct all the facilities that we need for all the functions that we support.
We have to turn to the private sector to help us out.
I think that has become quite clear.
We know that ten percent of our annual budget, just to use a ballpark figure, from over $1 billion budget, only ten percent of it is available for capital projects.
I think we have a burgeoning infrastructure deficit, as we have talked about in the last year.
I wanted to mention that the Auditor General, in her 2001 report recommended that Government of Nunavut review its extensive use of long term leases.
I am not sure about the whole background there.
She obviously was concerned about some of the leases on this list here that we inherited from the Government of the Northwest Territories.
What specific steps has the Government of Nunavut taken since then to address the Auditor General’s concern?
I will get Mr. Rich to respond to that question, that was something that he participated in.
As we mentioned before when the responsibility for all leases was brought back in 2002 to headquarters, the work started to review all of the leases, and that work in ongoing.
We worked more closely with the Department of Finance, particularly over the last two years, to look at the leases that we do have, and also with the Department of Justice to analyze specific long-term leases that we have.
Obviously where we’re tied into a ten or a twenty year lease and it’s an iron clad lease, there’s nothing we can do about that.
What we have been doing is looking forward from this stand point.
We’ve taken the Auditor General’s comments as very constructive and very useful comments to cause us to do very close analyses of leases and to make sure that we don’t get into what would be leases that would be long term and unfavourable for the government.
Obviously we don’t want to do that and we avoid that.
So, we carefully do an analysis of options as we have for instance, with the Cambridge Bay Health Centre that you looked at to make sure that we avoid circumstances that would not be in the best interest of government.
Can the minister or Mr. Rich tell us if you have conducted an analysis of all 59 leases that are on this document.
The department audits and monitors all 59 leases on a regular basis which is ongoing work that continues today.
There is a contract on page two of your document.
It’s under “other”, Winnipeg, and the name of the lease property landlord is 4651 NWT Limited, 20 years, 715 thousand annually.
Who is that company.
The numbered company, Kivalliq Boarding Home, which is in Winnipeg, I fail to see the name written on here.
We don’t seem to have it in front of us but we can get back to my colleague about this information.
Yes, I would like to have that information, hopefully by tomorrow morning.
Can the minister tell us, during the 20 year lease, I think we’re going to be spending $14.3 million, when does the lease expire?
If my information here is correct, the lease will end in 2023, but just going back to his earlier question about the company, I believe that is in the legal registry.
You’re still going to provide the name tomorrow, I take it.
You can probably find that information faster than I can.
Can the minister tell us why the Government of Nunavut chose to lease rather than purchase that building.
I will get Mr. Rich to respond to the question .
This was not a lease that the Department of Community and Government Services was originally or public works of it at that then time was originally involved in negotiating.
The negotiations for this was done directly by the Department of Health and then Department of Community and Government Services became more laterally involved in the negotiations of the lease.
Unfortunately, we don’t have the full information on all of the negotiations that went on for this.
However I can say in terms of a purchase as apposed to a lease.
It’s my understanding there was not sufficient funding available at the time for the purchase which would have been considerably more obviously then the lease.
The lease obviously has the advantage of spreading the cost over a number of years.
Thank the minister and Mr. Rich.
The lease, I guess, was negotiated in 2003, and yet you had your division in 2002.
I wonder why the Department of Health was negotiating the lease when the Government of Nunavut, through your department, had a leasing division to handle leases.
I wonder if Mr. Clark was here then.
We had people in the Department of Community and Government Services who could take the lead in those negotiations.
I’ll refer that to Mr. Rich.
Mr. Rich.  Mr. Rich: Thank you, Mr. Chairman.
I would say that I did a little bit of research on this one prior to the meetings last June with the Auditor General when this was in discussion with the Standing Committee.
The original leases for this property were done in 2002; they were done by the individuals in the Department of Health at that time, and done outside the normal process.
Obviously this is a process that frankly should have gone in a different way, should have been negotiated by the Department of Public Works.
I can’t answer for all the reasons as to why that happened because I was not there at the time.
That, in fact, happened in a different department so one would have to check up to those sources.
I can say I do know from discussions with staff and others, that when it was brought to the attention of the department, that the Department of Public Works at the time, did become involved in it, which is what resulted in the third negotiations of the lease and the take over the lease through Public Works then to insure that it conformed with the policy and was brought into the normal process of leasing for government facilities.
Thank you, Mr. Rich for that answer.
I think I know what buildings we’re talking about.
Before it was just a numbered company but I now know for sure, based on your comments.
This is one of the leases the Auditor General identified as a problem, in her Auditor General’s report last year.
We spent a lot of time talking about it.
This is the lease a Department of Health official negotiated more money or a longer lease, or entered into.
I don’t know if you want to rehash it here before 6 o’clock.
Can Mr. Rich explain to me, explain to the House, does their department take the lead role in all lease negotiations?
Do other departments defer to them in terms of negotiating in terms of leases and P3s.
Yes we do now have that responsibility under Department of Community and Government Services, we do this close work and collaboration with other departments.
So is the minister saying we’ll never see another situation like that contract or lease in Winnipeg ever again.
If I were to say we will never and we did, I would get shot.
I hope we never do because this process that is now in place be quite clear as to the lead department in these leases.
I don’t think we would shoot you; we would probably tie you to a rack and whip you a little bit.
I wanted to review the fine print on page 2.
There is a note that says infrastructural office buildings leased from NCC are not included on this list as they are a flow through cost from the federal government.
Can the minister indicate whether the leases on these ten buildings or facilities, do they all expire at the same time?
The advice that the expiry will be 2019 for all ten.
Mr. Peterson, your time is up and I have one more names on my list.
Mr. Curley: I just want to know that the facility in Winnipeg is quite an essential service, the patient home, the transient facility, a well known company owns that facility, I believe Nunasi has a joint venture with our friend Tony Chang, because he runs the facility in Winnipeg.
They may have had poor partners in negotiating the deal but they did their part so I won’t apologize for that one bit.
I have a question with respect to all these leases.
Why the information was not provided as to whether or not which one, out of 59 leases, which leases has a sunset clause?
The others have an option to renew clause.
Having that information would have cut down a lot of stuff.
Would that information be available because I am sure that there are leases that have an option to renew and some would likely have an option to lease to own facilities.
So which properties are they?
Could that kind of information be provided so we could have an idea that those that do have a sunset clause would be publicly tendered and they not be entered into again or renewed without going through public tender process.
It is quite difficult for us because we have to look at the costs and also keeping in mind what is being asked by us to do.
As I stated earlier because this is our first appearance I am pretty sure that we have omitted some things and as we learn from this we will have a better idea.
As we go along I am sure eventually we will be able to have those things included in there.
Mr. Curley: I need that information.
I asked not all the leases is standard leases.
They are not always there.
Some will have an option to purchase at the end of the term of the lease.
That means that the Government of Nunavut would buy for $1 or some negotiated agreement.
I am convinced that not all have a sunset clause without an option to renew.
Surely as you guys indicated to me earlier that you have the capacity and ability to administer those leases and real estate divisions.
That information is probably easy to get through the computer, where we would assure the public where leases have a sunset clause and rather than extended, go through the public tender process or for any other public competitive process.
I want some indication as to why this information cannot be provided to the committee.
Going back to what the government has been able or not able to make public, there are some factors which have prevented the Government of Nunavut in sharing this information freely.
Some of these include the names of companies, lease termination, lease conditions, which are not usually reported in the public as they can impact future tenders or negotiations and it is because of that, that the information is not included in the report.
Mr. Curley (interpretation): I’m not 100 percent sure that these are the reasons for not providing that information because the information is already public as to who has $1 a lease, or which companies have 20 year leases with the government.
That’s already public.