N.W.T. pays New Brunswick $2.75 million in confidential settlement for Deh Cho Bridge work

The Government of The Northwest Territories recently paid the province of New Brunswick $2.75 million, and politicians won't say exactly why.

The payment was first made public last Thursday when it was questioned by Frame Lake MLA Kevin O'Reilly in the N.W.T. Legislature.

N.W.T. Finance Minister Caroline Wawzonek told the house that the money was part of a confidential settlement between the territory and the province relating to work done on the Deh Cho Bridge by the bridge's original contractor, Atcon Construction. But when pressed for further details on the settlement, Wawzonek refused to provide them.

"There are challenges in terms of whenever there's been a legal matter that gets resolved … one of the things that entices any party to settle a dispute is to be assured that they can be provided some confidentiality rather than having to go through a fully public litigated process," Wawzonek told MLA's.

The $2.75 million payout comes just a few years after it was announced that the Government of New Brunswick was on the hook for $13.4 million for Atcon's faulty work on the bridge.

"Wait a second, I thought we were getting some more money out of the government in New Brunswick to cover some of these costs and then somehow a dispute arises and we end up paying $2.75 million? How does this work?" O'Reilly told CBC.

"I'm quite frustrated about this because I do think that the public is owed more of an explanation than what's available."

$13.4 million loan guarantee

In 2008, the Government of New Brunswick gave the financially distressed Atcon a $13.4 million loan guarantee for its work on the bridge.

A year later, the company was removed from the $202-million megaproject because it couldn't agree on terms for the second phase of construction with the bridge's developer.

A construction audit released by the N.W.T. government in January 2011, identified a number of problems with Atcon's work on the bridge including levelling the rocks that protect the bridge's pier bases.

When the company went into receivership in 2010, the province was on the hook for those repairs, minus the $2.9 million the N.W.T. government had held back from the company to fix any problems created during the company's tenure.

According to a 2017 report from the auditor general of New Brunswick that looked at the financial assistance the province provided Atcon, the territorial and provincial governments agreed that the $13.4 million guarantee would be put in an interest-bearing bank account. The territorial government would then withdraw funds from that account when it needed it to pay to fix the "deficiencies in the bridge construction." 

Initially, Deh Cho Bridge project manager Kevin McLeod said the territory expected to only need about $4 million for those repairs.

"The people of the N.W.T. are in the driver's seat here. This was their project," McLeod told reporters at the time.

"People guaranteed it, they didn't meet their specifications, so now we have to sort it out."

But in its 2017 report, the auditor general of New Brunswick said the cost of the repairs would be more than the $13.4 million provided by the province.

"In July 2016, the [Government of the Northwest Territories] provided [the province of New Brunswick] with a report on deficiencies and costs. We examined the report, which indicates the cost to identify and remediate the deficiencies, in addition to legal and other anticipated costs, is in excess of $14 million," the report said.

How the territorial government went from being owed money from the Government of New Brunswick to having to pay $2.75 million dollars is unclear. 

Wawzonek did say in the house that MLA's were briefed on the settlement but that that briefing was also confidential. O'Reilly refused to provide any additional information on that briefing than what was brought up in the Legislature. 

On Monday, CBC News requested an interview with Wawzonek but she did not make herself available.