N.W.T. minister defends government's decision not to disclose costs related to former hospital building

The N.W.T.'s minister of infrastructure is defending her government's decision not to disclose details of its commercial lease for a health-care building it is leasing out to a third party and sub-leasing back. 

According to an auditor general report in the fall, the territory's project to build a new Stanton Territorial Hospital went hundreds of millions of dollars over budget and failed to show good value for money for residents. 

It also looked at how the hospital was built using a public-private partnership (P3) model and how the territory ended up becoming a rent-paying tenant in the old hospital which it still owns — now turned into the Łıwegǫ̀atì health-care building.

Yellowknife North MLA Shauna Morgan says the government's refusal to report publicly on the sub-lease of the Łıwegǫ̀atì building only adds to the scandal of the project. Reporting those details publicly is the only recommendation from the auditor general that the territorial government rejects. 

At the Legislative Assembly on Wednesday, Morgan pressed Infrastructure Minister Caroline Wawzonek on why the government won't accept that final recommendation. 

"Who or what are we protecting by refusing to acknowledge mistakes," Morgan asked. 

She said the territory's plans to complete other major projects, like the Taltson expansion and the Mackenzie Valley Highway, are reasons why it should be transparent about the sub-lease agreement. 

"If this government wants us to take seriously its ambitions to build three new multi-billion dollar mega-projects ... it needs to address head on what went wrong with the Stanton P3," she said.

Wawzonek said the territory considers the Łıwegǫ̀atì building and its lease agreement to be separate from the public-private Stanton project — something the territory disagrees about with the auditor general. 

"There's no matter of any people being protected," Wawzonek said. "The same as on every other commercial lease, we don't report them publicly."

Wawzonek said that's because commercial leases contain private information about the landlord, even though in this case the government owns the building and is sub-leasing it from a third party leasing it from them.

Morgan asked if the department was considering breaking the lease agreement that has the territory paying $78 million to a third party over the course of 30 years. 

"The legacy of this trail of irresponsible decision-making is found all over this budget that's before us," Morgan said. "It's a huge part of our interest payments and debt that has us bumping up against our debt ceiling."

Wawzonek said the territory doesn't want to be the kind of contractual partner that breaks lease agreements. She also said she couldn't speak to decisions that were made when the territory entered into the agreement largely because of poor record-keeping — something the auditor general also noted in its October report. 

Wawzonek said her department is committed to better record-keeping, and its something the government has already begun. Some of that work includes a new procurement committee that oversees procurement and ensures proper regulations are followed, and changes to the capital planning process to provide better information about projects that carry long term costs. 

"I am satisfied that we've made a lot of change and we'll continue to look for opportunities to do that."