High construction costs cancel projects across Nunavut

New housing units, power plant among cancellations after bids come in over budget

Kugluktuk MLA Bobby Anavilok and Uqqummiut MLA Mary Killiktee (right) asked the legislative assembly Wednesday why major construction projects in their communities had been cancelled. (Photo by Emma Tranter)

By Emma Tranter

Rising construction costs have cancelled or delayed critical infrastructure projects across Nunavut, the territory’s legislative assembly heard Wednesday.

During question period, four MLAs queried cabinet on why projects previously approved in their communities have suddenly been halted.

Netsilik MLA Joseph Inagayuk Quqqiaq said housing units promised in Taloyoak, including two fiveplexes, still haven’t been built.

Housing minister Lorne Kusugak said although the tender for the Taloyoak units closed in March, all the bids came in well over budget, at around $1.1 million per unit.

“They were just all way too expensive,” Kusugak said. “The housing corporation just doesn’t have that type of money.”

This isn’t the first time in recent years the Nunavut government has cancelled projects due to rising costs. Canada’s rising inflation rate, high fuel prices and supply chain delays have all affected construction in the territory during the COVID-19 pandemic.

The government’s mandate, which was tabled in March and sets out priorities for the next four years, pledges to build 1,000 new housing units across the territory.

More than 3,000 new units are needed to accommodate housing demand in Nunavut, according to a 2020 report by the Nunavut Housing Corp.

Quqqiaq asked how the government’s mandate could still be fulfilled, given skyrocketing construction costs.

Kusugak said he is working with the private sector and trying to find “innovative” ways to lower the price of construction.

“We can’t do $5-million per fiveplex … This government doesn’t have that kind of money,” he said, adding the government still wants to build 1,000 units.

“That goal is achievable and we are working towards that.”

Bids submitted in March for construction of Sanikiluaq’s hamlet office, which was destroyed in a storm in 2020, were also rejected because they came in over budget, the assembly heard.

Community and Government Services Minister David Joanasie said because of this, the government will need to seek additional funding for the project. During the assembly’s last sitting, MLAs approved $13 million to rebuild the office.

And in Clyde River, construction of a visitors centre for the community’s Agguttinni Territorial Park was also cancelled because of high construction costs.

“It is very regretful,” Uqqummiut MLA Mary Killiktee said.

Environment Minister David Akeeagok said the government is working with the Qikiqtani Inuit Association on a joint project to get the visitors centre built.

In Kugluktuk, the community’s 50-year-old power plant needs to be replaced but MLA Bobby Anavilok said that hasn’t happened yet.

That’s because bids for a new plant came in well over budget too, said Craig Simailak, minister responsible for Qulliq Energy Corp.

Simailak did not have details on when that project could be built.


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(12) Comments:

  1. Posted by Bob on

    It is unreasonable for the Government of Nunavut to expect to set the price for the new housing unit cost. If officials believe they can deliver a cheaper per unit cost than the market bids, then the onus is on the government to act immediately to build the more affordable cheaper units. But cancelling projects and having no viable plan is not a responsible or accountable government. Previous housing scandals have shown that waste, delays, and corruption follow officials resorting to “innovative ways” outside of the competitive bid process.

    • Posted by Sam on

      The GN caused this problem a decade ago, the civil servants pretty well drove the small local contractors out of business. And it will not change, home ownership outside the regional centres is almost impossible now, and the GN reply and mlas give us more money federal gov.

    • Posted by Iglu on

      But Bob, to award those 5.5 million dollar fiveplexes would be like enabling a substance abuser. Many contractors in Nunavut, their greed has gotten out of hand and they have become addicted to the illogical bids and contracts. The GN has finally smartened up and become financially prudent. The price gouging has got to come to an end. Ask almost any contractor in Nunavut how they are doing financially, and are they making any profit, and 95% of them cry poor. But then they have their million dollar mansions and antique car collections down south, along with toys in the north, that seems to speak volumes otherwise.

    • Posted by Northern Guy on

      Sorry to burst your bubble Bob, but the GN doesn’t have a cadre of qualified carpenters, plumbers and electricians on staff who can jump in and start building houses. They, like the rest of us, are at the mercy of the local industry who always jack up their rates and prices when they see government coming. I am actually happy that the GN didn’t simply cave and agree to whatever outrageous terms were being demanded to get these contracts completed.

  2. Posted by WestKit on

    Why would anyone want to carry the cost of homeownership when the public houses are huge (compared to what I can heat anyway) and maintained without limits and fueled on a regular basis.

    Why not build tiny homes to help alleviate homelessness. A fraction of the costs of regular units to make and O&M should be more affordable saving more to build more.

  3. Posted by Beleaver on

    Forget about visitors centre, Nunavut needs housing! Maybe NTI and QIA can start using those royalties they collected from mining companies to build houses or access funds from Inuit Impact Benefits Agreement?

  4. Posted by ????? on

    Surprise, building costs have risen significantly in the past 2 years! The solution to our current crisis is not to cancell builds but keep building. After all, didnt the GN grind millions of unbudgetted $$ to manage Covid? People are dying from a la k of housing too. Do you really think these costs are going to decrease in the 2 years it’s going to take to rebid the work?! Time to be reasonable and pay the piper for years of poor management at the GN.

  5. Posted by Baba Pedersen on

    Bring back the 512 Units from the 1980’s, nice small 2 bedroom Units
    Mandate that LOCAL Contractors and LOCAL People build them in every community
    EVERY community has the local skills to build these
    Buy Pre-Fabricated Homes from the South and Ship them up. Even if you pay $50K shipping per house it will still be WAY LESS than $1.1 Million per house
    The Nunavut Government has to change the way they currently build/buy homes, the current system does NOT work

  6. Posted by Alex on

    You know, realistically speaking, The housing crisis in Nunavut is an epidemic proportions…..and is the leading cause of most social issues, from addictions to low education levels. Honest to god, they need to treat this as a crisis…..and in a crisis you gotta put all efforts to fixing this issue. You think TB becomes prominent without a housing crisis? Its nice that they spent money protecting themselves from Covid, even going as far as paying 14 day hotels for people. Do it for the housing crisis now, seriously, its a social issue. Its a health issue. Its a living issue and needed to be dealt with forever ago.

  7. Posted by And the rest of the story on

    So lets just take a quick trip down the pricing lane. I won’t go into a lot of detail on pricing but rather give just one example which all those with any logic, a pencil and a piece of paper can extrapolate. So here goes, pay attention to facts rather than continue to speculate. One piece of 2x6x16′ spruce, common framing material in 2018 cost $9.39, then that same 2x6x16 in 2020 cost $23.75, today that 2x6x16 is $35.95. Furthermore that is the price at the lumber yard down south. Add complexity of design, which however could be simplified, current fuel costs, labour rates since everyone got used to the bonuses which had to be payed to keep workers during the two years of Covid. Now are you getting the picture. The only area to get some realistic savings is by making the design easier to construct. The residential design the NHC has been using for the last 5 years or so makes assembly extremely difficult, slowing on site assembly of what could be very simple using conventional and historically economical methodology. However this will not decrease material price, hotel costs, flights, labour, insurance, shipping. So even if you had the idea of having building prefabbed and shipped. The material cost and labour is still there. By the way 50K is about the equivalent cost of shipping raw material for one residential unit. So get your heads out of the clouds, don’t always think you’re being gouged, do some research, see the true cost and then if you can still do it better, cheaper and still to code. By a hammer and a saw and get to it since in the opinion of the peanut gallery there is a fortune to be made. Some other things to consider before you hang up your open for business sign, be prepared to work a lot more than 40 hours a week, in rain, snow, high winds and anything else nature can toss at you. But just a reminder, look at the progression of lumber prices and other factors. Good luck in your future endeavors.

    • Posted by Maq-Pat on

      I believe the standard design also includes a 14.5 foot ceiling. These are not economy units.

  8. Posted by Maq-Pat on

    Seems that we keep doing the same thing expecting a different result. There are countless different was to approach this. For just one example.
    Step 1: Establish a minimum standard for a “unit”.
    Step 2: Publish the fixed multi-year housing budget.
    Step 3: Have all companies (not just the local cabal) compete for who can make the most units for the fixed price.

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