Thank you, Madam Speaker. The Yellowknife office or commercial market had approximately 20,000 square feet of vacancy or around 1.6 percent prior to June of this year.
Just recently the new federal government consolidated the Department of Aboriginal Affairs and Northern Development into a new building, which then pushed our Yellowknife office vacancy rate up to 80,000 square feet or 6.4 percent vacancy.
We know that a recent RFP has closed for a new GNWT 60,000 square foot building to house devolution of Aboriginal Affairs from the federal government to the territorial government, knowing full well this building will hold very little net growth in terms of staff positions or expansion during the devolution transition.
In essence, Madam Speaker, we’ll have a new GNWT building with no new forced growth while this government gets their financial house in order over the next couple of years.
Consequently, this new GNWT building will add an additional 60,000 square feet of vacancy into the Yellowknife area, bringing the total amount to 140,000 square feet of vacancy and pushing our market vacancy at over 10.7 percent. This is the point of my statement today.
The historical absorption rate of office space in the Yellowknife area in better years of growth has been around 10,000 square feet per year. Given the future of the NWT during some very uncertain times, with the diamond mine transitions, MGP on hold and our high energy costs of doing business, one can only predict that we have anywhere from 14 to 20 years of inventory of commercial office space dusting on the shelf and force this jurisdiction into one of the worst real estate slumps this territory has ever seen.
To make matters even more troubling, by pushing the marketplace vacancy rates above the safe areas of 4 to 5 percent, we could in essence be sending the wrong message to our institutional capital markets that have been investing in the North, which could further trigger a loss of confidence in our community and erase decades of progress.
We cannot turn back the clock now, as it appears this government was given the mandate to proceed. However, I say with conviction here today that this government must not allow itself to trigger a real estate slump and it should carefully monitor the stability of the markets as we proceed with this new Yellowknife GNWT office building.
I will have questions later today for the Minister of Public Works and Services.
Thank you, Mr. Dolynny. The honourable Member for Frame Lake, Ms. Bisaro.
