Thank you, Mr. Chairman. I am going to talk about another community for just a minute. I was wondering if the department had done a technical assessment on GNWT-owned office space in Lutselk’e.
Thank you, Mr. Beaulieu. Mr. Miltenberger.
Thank you, Mr. Chairman. I’ll defer that question to Mr. Aumond.
Thank you, Minister Miltenberger. Mr. Aumond.
Thank you, Mr. Chairman. Other than the school and the health station, I don’t believe we have any office space in Lutselk’e.
Okay. The office space that’s been used as the band office, where they have most of the community government…. I wonder if the deputy minister could advise me who owns the office space. Who is responsible for the maintenance on that building?
Thank you, Mr. Beaulieu. Minister Miltenberger.
Thank you, Mr. Chairman. I understand that’s a band owned and maintained office.
Okay. I’ll talk about Inuvik.
Laughter.
I have a question on the demolition of the current structure where the planned office is being contemplated. I was wondering if there was some money put into the capital plan for, I believe, this fiscal year. I was wondering if the department could advise when the demolition will be completed and the land will be ready for a new structure to be put on it.
Thank you, Mr. Beaulieu. Mr. Aumond.
Thank you, Mr. Chairman. Our anticipation is that we will be out to RFP in December and the demolition will be complete by April or May of next year.
Okay. Following up on questions from other MLAs, I know there was indication that because of the nature of the way the office space in Inuvik is spread out around the community, although there may be a 7 per cent vacancy rate, there are small pockets all over the community. I was wondering what the opposition to actually doing a market evaluation would be.
I know that if we support a small business under some of our small business programs, even a person who owns a small business could have a lot less of an impact on something like this. That person is actually going into an area where there’s already a private market providing that service, and the government generally doesn’t support or often doesn’t support a small business in getting started. That’s the market disruption policy. I’m not one hundred per cent sure, but I believe the market disruption policy is something that’s housed in ITI.
I’m wondering what the reluctance, I suppose it would be, on the part of the government would be to actually do a market disruption evaluation of the potential landlords in Inuvik and how they would be impacted if this amount of office space were brought into the community.
Thank you, Mr. Beaulieu. Minister Miltenberger.
Thank you, Mr. Chairman. I’ll refer that to the Minister of Public Works and Services.
Thank you, Minister Miltenberger. Minister Michael McLeod.
Thank you, Mr. Chairman. We don’t see any potential for market disruption in this case. There is very little vacant space. It’s not the same as the comparison that was made with Yellowknife, where there is vacant space, and in order to undertake a project of this nature, we would be disrupting the market by not providing opportunity for the proponents that had space. In this case we have a number of buildings we’re housing our employees in, some with structural problems; for example, the Perry Building that was referenced. There is limited occupancy there. The landlord has discontinued maintenance on this building, and we’re facing potential eviction. There are other facilities that are located in inadequate space, which I mentioned earlier.
We don’t see the market disruption as an issue, because there are really virtually no other accommodations we can utilize. We have had these discussions, as I mentioned earlier, with other developers and have given them the reassurance that we will continue to lease and rent the same amount of space we currently do. I don’t see how we can be disrupting the market.
If market disruption is not an issue and the MLAs on this side of the House are indicating that there could be other priorities that we see because market disruption may be — from that type of evaluation — something that’s missing from this piece of the puzzle, would it be possible for the government to provide some comfort to the MLAs indicating that there is no market disruption? Maybe by getting the individual rental office space sector from Inuvik to indicate that this would not be an issue. I’m wondering if something like that could be easily attained.
Thank you, Mr. Beaulieu. Minister Miltenberger.
Thank you, Mr. Chairman. I’ll refer that to the Minister of Public Works and Services, Minister McLeod.
Thank you, Minister Miltenberger. Minister Michael McLeod.
Thank you, Mr. Chairman. I think it’s relatively easy to decide if there’s a market disruption. There is, first of all, no current space available in Inuvik, and for the second reason, we are planning to accommodate people who we are currently housing in our own facilities that are not up to the standards that are spelled out. Most of our buildings, including the Perry Building, which we need to be out of, do not have barrier free access, do not meet GNWT office space standards. They are not energy efficient; they do not promote environmental sustainability; they have air problems. We can’t allow our employees to work in that environment.
I was wondering if the government or the Department of Public Works has done a technical evaluation on the GNWT-owned office space that would be vacated to move into the new office space.
Thank you, Mr. Beaulieu. Mr. Miltenberger.
Thank you, Mr. Chairman. I’ll refer that question to Mr. Aumond.
Thank you, Minister Miltenberger. Mr. Aumond.
Thank you, Mr. Chairman. Hopefully I have understood the Member’s question correctly. In terms of an assessment about what space they’re coming from to where they’ll be going to, I think the Minister of Public Works has already stated that in our view, based and compared to our own standards, they’re inadequately accommodated — some of them up to a factor of 40 per cent.
Our income support people don’t have the proper security features to protect them. We don’t have barrier free access. In the office space in the Perry Building — we’re on the first floor — we’re not certain about how long our future is going to be there, so we need to have some place to go eventually. The landlord is no longer maintaining that building. The space we’re coming from, in our view, based on our current standards and criteria for office space for employees across the government, is inadequate.
Thank you, Mr. Aumond. Next on my list is Mr. Jacobson.
Mr. Chair, in hearing the Minister regarding the quality for staffing issues in the Beaufort-Delta and Inuvik…. On October 6 I made my Member’s statement regarding staffing, having to share a bathroom in Mangilaluk School, eating lunches in the hallways. Where does that come into play? I’m in support of the building, but the market disruption I’m starting to hear about more and more. I really think it should be looked at.
You’ve got private businesses in Inuvik relying on us. The Minister stated that there is going to be no market disruption; I think that should be relooked at. There is no equality in regard to what we’re dealing with in the small communities. You have communities that are, you could almost say, giving up on our government. They should be really looked at before we go into a community or a town the size of Inuvik — talk to the local businesses and give them that chance and opportunity to speak to us.
Just to let everybody on the other side know, I am in support of the building. But we have to make sure the businesses that do own the buildings in the community of Inuvik are taken a look at before we do anything like that.
Then again I go back to my Member’s statement: where do we get on the list for this? It’s going to be an uphill battle for me to try to get an extension put on Mangilaluk School, which we really need. The school in Inuvik, while I am in support of it, I guess I have to go there with a truck and try to take all the excess, anything left over, to get anything done — take the crumbs.
That’s how it looks to me right now. The communities are left in the dark again. Four years and we’re not going to receive anything. I always say: thank God for the Building Canada Fund. While I am in support of the Inuvik school and I am in support of the building, we should defer in regard to making sure that businesses in Inuvik are taken care of first before we make this decision.
Thank you, Mr. Jacobson. I didn’t hear a question there, but I’ll go to the Minister for a response.
Mr. Chairman, just for some more background. We handed out earlier today to all the Members.... They should have hopefully received it by now. We managed to get all the housing numbers and MACA money, and we’ve redone the funds being allocated by constituency to the Members so that it’s comprehensive. If you haven’t gotten that yet, you will be getting it. The numbers paint somewhat of a different picture. For example, Nunakput is now up to about $34 million over four years.
On the issue of the office building, I appreciate the Member’s comments. Minister McLeod has made the case of why that’s a necessary project.
Thank you, Minister Miltenberger. Next on my list is Mr. Yakeleya.
Mr. Chair, a question to the Minister. I’m trying to catch up to the issue here. In terms of the facility in Inuvik, the facility you’re proposing, have there been discussions with private businesspeople to say, “Can you build the building for us? We’ll lease it, and then nobody’s short on cash”? Has that discussion happened?
Thank you, Mr. Yakeleya. Minister Miltenberger.
Thank you, Mr. Chairman. What was received were some unsolicited proposals that were brought forward and examined, which is where we get the information indicated — a premium of about $38 million. There was no formal request.
Mr. Chair, the unsolicited discussions that you’ve termed this way, the discussions with these people…. Have there been serious discussions with the private people saying, “We know the amount; can we sit down and have some further discussions to come to an agreement we can live by in terms of providing this type of service to the government?” Has that been discussed further in terms of seriously looking at the request you have in here in PWS?
After the receipt of the unsolicited proposals and looking at the portfolio we do have in terms of where all our office space is and the percentage of leased versus owned, the decision was made to proceed with the plans that are now presented for the government to build and own and operate their own office space.
That’s where I’m having some difficulty: buying now in terms of supporting our own government in supporting the private business people by having assets in our community. We support the local people. We support the businesses, so I guess that’s my difficulty: shutting out the businesses in the community. I guess I’m having difficulty with that type of policy in terms of…. I’m having trouble wrapping my mind around this concept. Do we support the local business only when we think it’s to our benefit in terms of ownership and leasing, or do we work with the community? I’m having some difficulty understanding this.
The normal ratio or mix for leased and then owned assets usually is about 60-40. You have 40 per cent where you own it — you have your core business and you control the space — and you have the rest of your portfolio on the lease side. In Inuvik we have 93 per cent leased, 7 per cent that we own. The 7 per cent that we own is 30 to 40 years old and in a state of decrepitude, as the Minister of Public Works has articulated clearly. We have a portfolio in Inuvik that is overbalanced and limits our ability to have our core services in buildings we own and control. It’s an issue, which is one of the reasons we’re coming forward with the proposal to build as opposed to lease.
Is our DPW building included in this decrepitude? It’s also in desperate need of replacement. These are the Minister’s words, how he describes buildings in some of our small communities. That’s a good word to use for some of our facilities in our communities. I want to thank the Minister for explaining to me what the government is looking at in terms of this project being on the books.
I also want to echo Mr. Jacobson that some of our own buildings, even in our small communities, don’t seem to get much high priority in terms of fixing up our facilities here. I understand about Inuvik, and I certainly will take the Minister’s comments to heart about why they’re looking at this facility in Inuvik for our employees up there. But also remember that there are other regions that need facilities; they need to be looked at. The small amount of dollars…. You do what you have to do.
I’d like to say to the government, echoing Mr. Jacobson’s words, that there are other regions that sometimes need to be considered, and some of the facilities.… Go to Tulia; they’ve got the DPW garage with the…. I can’t say it here; otherwise I’ll be thrown out of the House, you see.
Anyhow, I’ll leave it at that, Mr. Chair. I’m going to have some more thought on this.
Thank you, Mr. Yakeleya. I don’t hear a question there. I’ve got one more person on the list, but I’d suggest we take a 15 or 20 minute break and come back with Mr. Krutko.
The Committee of the Whole took a short recess.
I’d like to bring Committee of the Whole back to order. We’re on page 4-4, and on my list I have Mr. Krutko.
Thank you, Mr. Chair. We keep hearing discussions about a proposal that was out there. I’ll clarify for the record. The proposal was for a lease-purchase facility in Inuvik; the idea was to lease to the government for 25, 30 years and buy it out for $1. That was the proposal that was put out in the request for proposal.
But after the request for proposal was sent and reviewed, it came back that there were some financial implications because of Revenue Canada and the way they calculated the revenues from that lease. There was an implication where you had to pay the calculated amount of the lease, the front end, which was assessed at some $10 million. Again, I think the government has never made any attempt to go back and see if there was a possibility of a simple building, such as a P3 like we did in Fort Smith; we’ve been looking at P3s in other areas — the possibility of looking at another option than what was provided.
I’m wondering: has the government looked at options other than the ones that were looked at through the request for proposal in which there was interest from the private sector, along with the Gwich’in and Inuvialuit, in building a facility in Inuvik for the government in regard to office space?
Thank you, Mr. Krutko. Minister Miltenberger.
Thank you, Mr. Chairman. I’ll ask Mr. Aumond to give us the history of how we got the bids and the decision that resulted from that and the decision he made to move to our proposal to build our own building.
Thank you, Minister Miltenberger. Mr. Aumond.
Thank you, Mr. Chair. The Member is correct; we did initially go out for an RFP for a lease-to-own on our own property. We did not receive any proposals for various reasons, including the ones the Member has indicated.
Subsequent to that process closing, we did receive two unsolicited proposals: one for a lease building and one for construction. It was on that basis that we made our plan and brought forward the proposed approach we have before us today.
In regard to the proposal for the lease-purchase, there were some ramifications with Revenue Canada. Was that ever discussed with the Department of Public Works in regard to a proposal in the Inuvik region?
We did have a brief discussion with one of the proponents, who explained to us the difficulty in undertaking that type of approach and basically indicated that that wasn’t doable for them. Really, that’s where we left the conversation.
Is the government considering building any other office space anywhere else in the Northwest Territories?
