Health board should reconsider
Members of the Baffin Regional Health and Social Services Board may have some good reasons for feeling suspicious of the GNWT and its insistence on a privately-constructed, lease-back replacement hospital for the Baffin region.
But those feelings of distrust and suspicion, all by themselves, don’t justify the stark alternative they’ve thrust upon all residents of the Baffin region: no new hospital now, and no new hospital for many years to come.
The reason for this is simple.
The GNWT, according to most versions of the story, has spent most of the money that Ottawa in its 1988 health transfer agreement with Yellowknife had committed for the renovation or replacement of Iqaluit’s hospital. No one within the terrritorial government has ever explained why and how this happened, and no one has ever stepped forward to take responsibility for it.
So for the current territorial government, there is now only one reality. And that is that little or no capital money only about $10 million perhaps is available to build new hospitals.
That means the only choice available to the GNWT right now is to persuade private companies to build and own hospital buildings for lease to either the GNWT or to health boards.
As the federal government is now doing with various Nunavut government buildings, and as the territorial government itself has done in the past with other projects, the GNWT has said that it will provide loan guarantees to ensure that those companies are able to borrow the money they’ll need for the construction work.
In the Baffin region, the GNWT reached such an understanding with the Qikiqtaaluk Corporation. Jerry Ell, QC’s president told Baffin health board members last week that his company will be able to build a $25 million replacement hospital in Iqaluit next year.
As with planned new hospitals in Rankin Inlet and Cambridge Bay, the GNWT would provide the necessary back-up that QC needs to borrow the money from a private lender. QC would then repay its lenders with money recieved from the health board through a long-term lease. For its part, the territorial government would ensure that the health board is always able to take care of its lease obligations.
At the same time, QC has said its role will be limited to acting as a developer, builder and landlord. And they say they have no plans to get involved in health care delivery which ought to satisfy any fears that parts of our health care system may be privatized as a result of the deal.
At a meeting in Iqaluit Aug. 7 attended by health officials Kelvin Ng, Finance Minister John Todd, Iqaluit MLA Ed Picco and representatives of Nunavut’s three health boards, the GNWT ought to have communicated this situation clearly to the public and to Baffin health board officials.
And the Baffin board’s own officials ought to have also communicated this to the board members who met last week in Iqaluit.
But to the surprise of many, the Baffin board rejected QC’s offer.
Instead, it appears to have opted for an arrangement under which a new fundraising foundation set up by the board would raise new hospital money by seeking charitable donations and by borrowing its own money on the private market.
Under their preferred solution, the board’s foundation would own the hospital, presumably under a lease-back arrangement with the Baffin board.
Ironically, this too would result in a hospital built with “private” money. In this case, the foundation would likely borrow that money from a bank or some other lender or investor who would charge the usual interest rates for the use of their money the same interest that QC would have to recover through a long-term lease-back agreement.
In any event, there’s nothing wrong in principle with the Baffin board’s desire to use a fundraising foundation. But that foundation is only now getting organized, and it’s impossible to imagine that they will be able to raise enough money in time to start construction of a new hospital next year.
All Baffin MLAs, along with Health Minister Kelvin Ng and officials from the Baffin health board were to have met this week in a final effort to save Baffin’s new hospital from oblivion.
Whatever formula they ultimately agree to, the Baffin board must accept at least some involvement from the Qikiqtaaluk Corporation along with the inescapable fact that only private money can get the job done on time. JB