Thank you, Mr. Speaker. I will be asking questions to the Minister of Public Works regarding the downtown building that’s being constructed at this time.
I guess my first question to the Public Works Minister is: What will be the full cost of this particular building? Once we hear that on the record, I’d like to know what we will be saving once we understand the investment required to build that building. I want to understand how much we will be saving, as a government, by having that building in place. Let’s start with that. Thank you.
Thank you, Mr. Hawkins. The honourable Minister of Public Works, Mr. Beaulieu.
Thank you, Mr. Speaker. I do not have the cost-benefit analysis of the savings between the construction of this building and continuing to lease office space. What I do have is the initial evaluation when we were going into building this office space. We were looking at the amount of space that we are leasing versus the amount of space that we own and ensuring we have a good balance for the city of Yellowknife. Thank you.
There have been a fair amount of questions regarding the impact of this potential new building. I shouldn’t say “potential” new building; it’s coming like a freight train. Much has been discussed about the vacancy rate and the impact this will have on our city and certainly the impact on attracting more investment from companies wanting to build office space.
What type of evaluation was done on rental vacancy? How does the Northwest Territories, particularly Yellowknife, compare to that study on vacancy rates and how does it compare to across Canada? What is considered a normal vacancy rate when we consider government-owned and leased buildings? I want to understand the type of vacancy vacuum we’ve created and the impact it will have on our local market to attract new investment in Yellowknife. Thank you.
My understanding is we haven’t created a great amount of vacancy. In fact, we are still looking for some office space for some of the departments that are not moving out of lease space. That building will be filled by Department of Transportation and the Department of Health. The information I have here doesn’t indicate that that building is going to create any hardship at all for any of the office people that provide office space, any of the businesses that are providing office space to the GNWT. Thank you.
Some people have informed me that local market with more than a 5 percent vacancy rate can really seriously affect potential investors in a particular market area. So, in other words, once we reach greater saturation than 5 percent in the local market, investors are starting to look at this area and saying, well, why would we be there because we’re just going to build an empty building.
What type of study and balance was taken into consideration and is the Minister able to cite the actual percentage of vacancy that will be created in the local market here? Because I want to understand, and I think the public wants to understand, what potential vacancy we will have here and certainly the effects it will have on potential investors that may want to look north, but don’t see it as a profitable market and probably stay away. Thank you.
Thank you. The information I have is that the office space vacancy in the city of Yellowknife will be between 5 and 7 percent, which is considered to be a healthy vacancy. Thank you.
Thank you, Mr. Beaulieu. Final, short supplementary, Mr. Hawkins.
Thank you, Mr. Speaker. My concern is being at least 5 percent before the building was built or is being built, but certainly let’s get to my last and fourth question, which is about the building and the impact of the cost. Now, the Minister said he didn’t actually have the cost on this building at the very start of my first question. Is the Minister in a position to talk about the costs associated with change orders? So in other words, what was the original budget of this building and what will the final number be when the final cheque is written? We need to get a sense of impact on the change orders and how they affect them and sometimes it’s received as the backdoor bidding, people bid low and then they change order the final price up. If the Minister could get that detail before the House. Thank you.
Thank you. The office space construction is not over budget. There has been no requirement for change order. The only thing that we have changed is that we have moved money from the previous year back because the office space construction was ahead of schedule. But the bottom line is that we went in with a certain budget and we’re well within that budget. Thank you.
Thank you, Mr. Beaulieu. The Member for Mackenzie Delta, Mr. Blake.
