Dowland collapse leaves trail of debt across Nunavut, other regions

Rocks and other rubbish were scattered around in front of the old hospital site in Iqaluit last month when all work ceased on the site. (FILE PHOTO)

The financial collapse of Dowland Contracting Ltd. and related Dowland businesses has left a trail of debt scattered across Nunavut and other regions of northern Canada, documents filed with the company’s receiver reveal.

Dowland owes more than $83 million in secured debt to the Royal Bank of Canada and a minimum $51.7 million to a long list of unsecured creditors, many of them suppliers and sub-contractors.

That figure could change, since the amounts owed to some creditors are listed as “unknown,” and it’s not clear how much the company — which employed about 450 workers — owes to its employees.

Documents filed in public by Dowland’s receiver — a company called Alvarez and Marsal Canada Inc. — list hundreds of unsecured creditors across Yukon, Nunavut, the Northwest Territories, Alberta and British Columbia.

While most of those firms are located outside Nunavut, some Nunavut businesses and organizations have been stuck with unpaid debts they may find hard to collect.

One is Inuit-owned Nuna Logistics Ltd., to which Dowland owes $9.4 million.

Nuna Logistics, owned 25.5 per cent by Nunasi Corp. and 25.5 per cent by the Kitikmeot Corp., is listed as an unsecured creditor of Dowland Industrial Works Ltd., a Dowland subsidiary.

Other unsecured creditors, most of whom are owed money by Dowland Contracting Ltd., include a variety of businesses and government organizations in Iqaluit, Rankin Inlet and Cambridge Bay, such as:

• Kitnuna Corp., Cambridge Bay ($231,004.75)

• KRT Electrical, Iqaluit ($224,451.80)

• Petroleum Products Division, GN ($108,472.98

• Jago Services Inc., Cambridge Bay ($85,018.79

• Nunavut Power, ($55,038.85)

• Nunavut Savik, Rankin Inlet ($38,081.12)

• Tumiit Development Corp., Iqaluit ($21,462.00)

• City of Iqaluit ($19,508.80)

• Kitikmeot Supplies Ltd., Cambridge Bay ($14,413.08)

Some of the unsecured creditors are owed only small amounts of money — one debt is listed at “$20.00.”

But one contractor in Whitehorse is listed as being owed $2.1 million and a contractor in Alberta is owed $1.6 million.

Many of Dowland’s subcontractors and suppliers have filed lawsuits in court.

Dowland Contracting Ltd., which in Nunavut had been part of a joint venture with the NCC Group of Companies known as NCC-Dowland, was put into receivership May 21 after a hearing in Edmonton before the Alberta Court of Queen’s Bench.

This means all the company’s assets in the Northwest Territories, Nunavut, Yukon, British Columbia and Alberta are now controlled by the receiver.

The receiver is expected to figure out how to settle the debt held by the firm’s creditors. As a secured creditor, the Royal Bank is likely to find itself at the top of the list.

Dowland’s insolvency led to the company walking away from a contract to do renovation work at the old Baffin Regional Hospital building in Iqaluit.

In response, the Government of Nunavut is now working Dowland’s bonding agent to find a contractor to finish the $32.3 million project.

Surety bonds are a form of insurance that contractors must provide governments when bidding on contracts to protect the client against the risk of non-performance.

The GN won’t say who Dowland’s bonding agent is, but it’s likely a firm called Intact Insurance, whose name appears on many documents connected to the receivership.