Avoiding the blame game
Thanks to last week’s tales of continued financial bungling at the Nunavut Housing Corp., regular members of the Legislative Assembly of Nunavut now have a chance to enjoy one of the greatest pleasures that political life can offer: blaming the other guy.
Given that this matter involves at least $110 million worth of overspending within two programs whose original budgets totaled only $300 million, such outrage is natural.
But if MLAs wish to serve the public interest, they should repress the urge to wallow in the government’s misfortune and try to develop a mature understanding of what went wrong and why it went wrong.
This means putting the fiasco into a proper context If they do that, they’ll likely find that the corporation’s financial blunders were inevitable.
The first of those programs, called the Nunavut Housing Trust, used $200 million that the Conservative government announced in its 2006 budget for the construction of about 725 social housing units in Nunavut. An additional $100 million was divided equally between Yukon and the Northwest Territories.
As we know now, the housing corporation overspent its budget for this program by about $60 million. This occurred, corporation officials said earlier this year, because their staff badly underestimated per-unit construction costs, especially the cost of labour.
The second, which they called the Affordable Housing Initiative, used a $100 million contribution the Conservative government announced in its Jan. 27, 2009 budget. The housing corporation overspent on that program by about $50 million.
This happened because, in the second program, corporation officials repeated the errors they made the first time around. No one caught those errors until December, 2009, when the GN hired a new chief financial officer for the housing corporation.
We’ve all known for a long time now that the Government of Nunavut is a weak, badly-managed organization, with far too many management positions staffed by far too many unqualified entry-level trainees.
These weaknesses are compounded by the decentralization of government offices to 10 far-flung communities and by communications systems that sometimes barely function.
But nowhere is the Government of Nunavut more incapacitated than by the persistent shortage of qualified financial staff, ranging from competent clerical workers to qualified chartered accountants and senior financial managers.
The Auditor General of Canada, and others, have pointed this out for years. But neither the GN nor anyone else ever gave these warnings the attention they deserved.
So it’s inevitable that sooner or later, Nunavut would stumble into a big, messy financial trap. That day has arrived.
The other piece of context is this: the $200 million Nunavut Housing Trust program represents the biggest single construction project that the GN has undertaken since April 1, 1999.
To manage that project, the federal government, in 2006, handed that money over to an entity that was already struggling to keep its head above water. The Nunavut Housing Corp., with a head office theoretically decentralized in Arviat, has never been fully staffed. For most of its existence, about one in four jobs have sat vacant at any given time.
So it’s not surprising that in the two public housing construction programs, the corporation’s overworked and underqualified workers erred repeatedly from the very beginning, especially in their financial calculations.
Had some other Nunavut department or agency been given such a project, it’s likely the result would have been the same — because the incapacity that the housing corporation displayed on this file is an incapacity that was likely built into the Nunavut government even before it was created.
And given the administrative disasters that infect the Department of Human Resources, as is evidenced by the Auditor General of Canada’s recent report on that department, the GN may now be incapable of correcting itself. The dysfunction that we see now may likely turn out to be what we’ll see for generations.
MLAs have been using words like “public inquiry, “forensic audit,” “leadership review,” and so on. It’s obvious that at least some MLAs want certain heads to roll, even if it’s unclear who would replace those who might be removed and whether such forms of retribution could even serve the public interest.
At the same time there’s no doubt the GN must soon produce a complete, detailed explanation of what went wrong within the housing corporation. But the motivation for such a process must be to serve the public interest, not the private political interests of vindictive MLAs. JB