Nunavut MLAs OK plan to cover cost overruns

Nunavut MLAs have passed the government's plan to help cover $60 million in cost overruns by the Nunavut Housing Trust, considered to be the largest case of overspending in the territory's history.

Four finance bills were given assent in the Nunavut legislature Thursday night, as part of the government's plan to cut back on spending and postpone projects in order to make up the cost overruns.

"It's the largest in the history of Nunavut, possibly the history of the Northwest Territories and Nunavut, so we've never dealt with that kind of an overrun before," Finance Minister Keith Peterson told reporters outside the legislature late Thursday.

"We've learned a lot as a cabinet and as regular members as to how an issue like this could seriously impact our financial operations."

The Nunavut Housing Trust, which is managed by the housing corporation, was created in 2006 and received $200 million in federal funding to build between 700 and 750 affordable housing units by 2010.

Housing corporation officials cited poor budgeting, poor expenditure tracking and high labour costs as factors behind the $60 million that the trust overspent.

The Nunavut Housing Corp. will have to cut about $19 million of the cost overruns. Peterson said he has asked for more frequent reports from the housing corporation, in the hopes that similar overruns will not happen again.

No programs cut

Under the government's plan, Peterson said it will defer $22 million in capital projects from this year to next year, including work on the water treatment facility in Kugluktuk and renovations at the Qikiqtani General Hospital in Iqaluit.

Some government departments pitched in a total $16 million by imposing hiring freezes, cancelling training, and cutting back on travel. As well, Peterson said the government has reduced its overall contingency fund by $2.3 million.

But Peterson stressed that even with the reduced spending, there will be no cuts to government programs and services.

"We told the departments to stay away from the programs and services because we still want to deliver programs and services to Nunavummiut," he said. "To their credit, they were able to do that."

But Peterson said not all departmental contributions were equal: for example, the Health Department was left out because it is frequently over budget to begin with.

As a result, regular MLAs Paul Okalik and James Arvaluk voted against the Education Department's contribution to the plan.

"I generally support the plan, and it's just the cuts to education that I could not support," Okalik said.

"There's no cuts to health, for example, so there's a precedent there. So why couldn't we apply that to education?"