Major Nunavut 3000 contracts late, over budget and lack guarantee
Nunavut Housing Corp. and NCC Development Ltd. agreed on 316 units for $240M; That price is now $270M
Premier P.J. Akeeagok, third left from centre, and Finance Minister Lorne Kusugak, centre wearing a checkered shirt, stand alongside members of Nunavut Housing Corp., NCC Development Ltd. and students from Nunavut Arctic College in Rankin Inlet in 2022. (File photo by David Lochead)
A major component of Nunavut 3000 is late, 12.5 per cent over budget, and not protected against potential contractor defaults.
The Nunavut government has a goal to build 3,000 new housing units by 2030. The $2.6-billion initiative was unveiled in late 2022.
NCC Development Ltd. is a cornerstone of the project. The company has two ongoing agreements with Nunavut Housing Corp. to build 316 units as part of a 10-year partnership to provide 2,000 units of that 3,000-unit goal.
The first agreement, announced in May 2023, was to build 150 public housing units by Oct. 31, 2024, for $105.4 million. Eight months after that deadline, a single 18-unit complex in Iqaluit is complete.
The second agreement, announced in January 2024, was for NCC Development to build 166 units for $134.7 million by Dec. 31, 2025. For that project, foundations and site work appear to be finished for the most part.
Meanwhile, the total price of the original agreements has ballooned from to $270 million from $240 million — an increase of 12.5 per cent — as the result of change orders on the contracts. This brings the average price per square foot up to about $750 across both contracts.
Previously, the two parties had agreed on $630 per square foot on average for the first year’s agreement, and $670 per square foot in the second year.
The change orders and the reasoning for them are listed in a procurement and contracting document Nunavut Housing Corp. published on its website June 6.
Challenges with site work and acquisition of gravel are listed, as well as high shipping costs to remote communities.
Also at fault: the slow pace of work.
“Schedule extensions result in increased general condition costs in communities,” the procurement document said.
This table, published on Nunavut Housing Corp.’s website June 6, shows the estimated completion dates for 150 public housing units NCC Development Ltd. was under contract to complete by Oct. 31, 2024. (Graphic courtesy of Nunavut Housing Corp.)
Unbonded contracts
Nunavut Housing Corp. has opted to forgo a performance bond on its 2024-25 contract with NCC Development, which is now worth $144.2 million after the change order.
Governments sometimes require contractors to put up a sum of money as a guarantee that the work will be completed.
If a development company goes bankrupt or decides it’s too costly to fulfill a contract, a performance bond will cover the cost of the work left incomplete.
“We … examined our risks, history of prior performance bonds that were called, options in terms of default if a contract were to fail, and the cost of bonding to the overall housing supply challenge,” said Alexandria Webb, spokesperson for Nunavut Housing Corp.
“Based on this, [Nunavut Housing Corp.] removed the performance bonding requirement for the NCC Development contract as well as our other large housing supply contracts with other builders.”
The cost of a performance bond on a $144-million contract would likely be around $2 million, estimated Fred Moroz, senior vice-president of BFL Canada, an insurance brokerage company that provides contract bonds.
The vast majority of contracts between the public and government are bonded, he said.
The Nunavut government requires performance bonds on all major work contracts over $1 million, but cabinet granted the housing corporation exemptions on this requirement, said Webb.
“The relatively small cost for a performance bond provides a large amount of security to the territory and the public funds,” Moroz said.
Plus, a bonding company will only issue bonds to companies it feels has the ability to finish the work. As part of the process, the bonding company receives a “large amount of detailed information about the financial and operational capabilities of the development company” before issuing the bond.
“The territorial government would not have this depth of background knowledge about the developer,” Moroz said.
“So, if they were to sue the developer, they may find that the company under contract is a shell company with no assets to pay damages.”
So far, Nunavut Housing Corp. has paid NCC Development Ltd. $187.7 million for the 316 units.
An eight-unit complex in Arviat and 12-unit complex in Cambridge Bay are scheduled for completion this summer, according to the Nunavut Housing Corp. procurement document. Other completion dates range between fall 2025 and mid-2027.
A third purchase agreement between NCC Development and Nunavut Housing Corp. is still under negotiation, said Nunavut Housing Corp.’s Alexandria Webb.
Clarence Synard, president of NCC Development Ltd., declined a request for comment on the change orders, referring Nunatsiaq News back to Nunavut Housing Corp.
This table, published on Nunavut Housing Corp.’s website June 6, shows scheduled completion dates for 166 units NCC Development Ltd. is under contract to complete by Dec. 31, 2025. (Graphic courtesy of Nunavut Housing Corp.)
Applying to NCC again but no response from supervisor. Only accepting from others towns from southerns French people
Alot of “coffee breaks” and site seeing in those nice NCC trucks,
Right. ‘Cause no one in Nunavut drinks coffee everyday, multiple times a day.
Wonder how much gas they pay for personal use of these big gas guzzling trucks they drive at all hours. Our hard earned tax dollars being driven to the ground with no real progress anywhere to be seen.
Does anyone have any idea what they’re doing anymore? Way too many unqualified cooks in the kitchen. NWT would have never let this happen under their watch.
Do you manage multi-million dollar, simultaneous construction projects in several communities across Nunavut?
From 1993 to 1999, the NWT government short funded municipalitites and housing associations in the Nunavut settlement area, they cut infrastructure projects, they cut education budgets.
Why would the west invest in the west between 1993 and 1999 when the East. NWT Government did far more damage to Nunavut and actually set it up to fail by doing this, but we are still here, we might not be thriving but we are surviving.
This is just the start. For almost 18 months now, questions have been raised in the Legislature, in communities and in the press regarding NHC and NCCD agreements and failure to deliver. The May 26th Auditor General’s (AG) damning report about the failures of NHC is dismissed by the Premier. The Housing Minister does not even answer any questions. NHC President Devereaux then does media interviews claiming the project is still a “success” even if it does not deliver on the number of homes he, Kusugak and the Premier had they themselves promised the people of Nunavut back in fall of 2022 under this Nunavut 3000 project. The continued claims of the low cost to build per square foot by these same individuals to justify the contract with NCCD has all been a lie and the people of Nunavut need to understand this. The lack of shame and accountability these people demonstrate is stunning! This is probably just the tip of the iceberg of what we will eventually learn regarding this Nunavut 3000 project. The election is coming. Time to send a clear message about responsibility. Time for a clean-up and perhaps then, some real “success” in housing can be achieved.
In your newspaper on May 28th, Deveraux’s own words from a press conference, “Devereaux said, adding the “status quo” before the projects was 100 units a year.” I think Devereaux needs to go back to school and take some math classes. October 2022 announcement of 3000 new homes by 2030. 33 months later (almost 3 years) 18 have been delivered. So 18 after 3 years is better than the 100×3 years or 300 new units that would have been delivered under the status quo? I mean seriously. He thinks we are all imbeciles!
Show me one house or building in Nunavut that has been completed in under 3 years. Move in ready. Especially a multi-unit public housing building that the government also supplies furniture for. Can you name one?
Public Housing does not provide furniture when we move in
We have to purchase our own furniture
So I don’t think you will ever see a furnished apartment when they are ready
Hey Sigh, Your NCCD or NHC slip is showing. I Have been in Nunavut for almost 20 years now. The territory is filled with plex’s that were all built in two years and ready for occupancy. Lesson for you my friend:
Year one:
* Contract awarded to GC in Feb-March
* GC orders all material and sent up on Sealifts which arrive anywhere from Late June to Mid- October,
* GC Site prep commences early summer
* Construction starts immediately upon arrival of Material
* Construction from August to December – for sake of fairness lets go late and say mid -August to mid December (4 Months)
* Sites shut down for X-mas break (Dec 10th to Jan 10th)
Year Two:
* Construction continues January to October (10 Months)
* Infrastructure hook up i.e, electrical, phone, etc..
*Furniture fixtures are ordered and shipped on sealift
* Construction Substantial Completion and inspections done in November
* Furniture is installed
* December Units are ready for Occupancy.
The territory is littered with units built under that schedule of 2 years and even less. If you think it took 3 years to build and delivery ready for occupancy the 100’s and 100’s of 4, 5, 8, 10, 12 that dot the Nunavut landscape you need to give your head a shake and stop gaslighting. Do everyone a favor and stop insulting the Nunavut Contractors intelligence who have been building this type of housing for the Government and NHC and most importantly Nunavummiut or years and years.
Oh! And by the way, your attempted gaslighting won’t even start a fire, because both the 2023-24 and 2024-25 NU 3000 Contracts that NHC holds with NCCD both have delivery dates of 20 months to 24 months from signing.
How long you have lived in Nunavut is not a qualification. Sounds like you’re a contractor with their panties in a twist…were you one of the companies bidding at $1,300/sq.ft.? You mad bro?
Does anyone remember back in November of last year when some members of the Assembly put forward a “non confidence vote” to remove the Premier for spending an unauthorized million dollars on buses for elderly Nunavummiut and for his general lack of transparency? He just avoids being removed by a 10-8 vote against the motion with one of those against being his own vote.
So now this! An almost 30 million dollar extra paid above and beyond the contracts to NCCD for delivering 18 houses out of 316 in the last 3 years. Missed delivery dates, payment of the contract values to NCCD of over 79% of the $246 million value for homes that were to be delivered in October 2024 and December 2025 and which in many cases will not be delivered until somewhere in late 2026 or early 2027, four full years after the NU 3000 was announced. All the while Nunavummiut wait for homes. No investigation, no accountability, no canceling of contracts, no demand for resignations and no vote of non confidence… Yes, Irony is dead!
Are you saying you prefer the lion’s share of the contracting go to southerners and not an Inuit-owned firm?
It looks like NCC and NHC is focusing on Iqaluit again, work completed for 18 units in a year.
Yes, Iqaluit is a rapidly growing hub of Nunavut. So there will be a focus.
Yes, that’s because that’s where the largest population of people live. Crazy.
Premier PJ treats leadership as cosplay. Everyone else pays the price of his incompetence.
This has our Premier’s name all over it but you know he will try to make it look good and fake his way.
He has been doing so many photo ops, all those pointless meetings with him taking photos of himself with “important people” what actually comes out of those photo ops? Not as much as the premier would like you to think.
All the while his government is taking a nose dive and each department are losing some decent staff. All the while the dysfunction of the GN has been getting worse.
I think more and more of us are seeing through the smoke and mirrors by our Premier, he thinks way too highly of himself now.
We all know this was a joke it will never happen looking at arviat unit that they started before nunavut 3000 and now claiming it under nunavut 3000 just a joke and still not done over 3 years now.
Show me one building or house in Nunavut that has been built in under 3 years, let alone a multi-unit building. I’m talking move in ready, all fixtures and appliances installed and working. And for public housing, all furniture delivered and moved in.
Anyone?
Aqsarniit hotel in Iqaluit
12..5 percent over budget not bad, still waiting to see the real actual costs, 750,000.00 for a 1000 sq house. Young working Inuit outside Iqaluit will never be able to buy a new home. I was at the airport in Iqaluit last year and heard a Housing Corp board member bragging they were going to teach the private contractors a lesson on how to build houses for 640.00 a square foot ..
Housing construction costs used to include the price for the land lease, often close to $100,000 per house.
Under NCC, lot leases are not included. so the real cost per “unit” is even greater than it at first appears to be.
Next, under NWT, houses were often built with 5 bedrooms. From 2010 to 2020, most NHC construction was 2 or 3 bedroom homes, with a few 1-bedroom apartments. Nunavut 3000 is mostly 1-bedroom “units, with a few 2-bedroom and occasionally a 3-bedroom apartment.
Now even a single bed in a shelter is counted as a “housing unit”.
This might be “progress” if the number of units was up substantially, but it’s not.
Minister of Housing, “How many bedrooms have been built in each of the past 10 years?”
Minister of Housing, “What has been the cost per bedroom for construction completed in each of the past 10 years?”
It is sometimes estimated that it costs government around 2x as much to do something compared to the private sector.
The well established reasons for this include; bureaucracy and inefficiency, lack of competitive pressure, political considerations, lack of incentive for cost reduction, higher compliance costs, prevailing wage rates, and a dubious public service motivation.
Nunavut has made the choice (seemingly by default), that our housing needs must be primarily addressed directly by government working through a select group of companies, notionally owned by Inuit.
The main reason for this (I think) is that Ottawa, Iqaluit and Inuit Orgs all agree, and act in a manner consistent with the belief that Nunavut Inuit are and will continue to be children, incapable of doing what other humans already do for themselves.
This is not the only choice. There are many, many other ways of providing for housing. Other choices include convincing and empowering Inuit to finally put on their big boy pants (like any human, including an Inuk, is fully able to do), and do things for themselves.
However, if the government housing choice has been made, it comes with the problems outlined above.
It is no use complaining about missed deadlines, cost overruns, or bureaucratic slip ups, or political choices masquerading as slip-ups from the GN, NHC or NCC.
This is what you will invariably get based on using this method to address housing. Nunavut 3000 will make similar storylines for the next couple of years, until the focus shifts to how to keep the lights, fuel, and water on all these new units.
Good point Lucretius, no one is thinking about the lights/fuel/water for these 3000 units right now. But in the end, i have a nad feeling that the taxpayer who works everyday will be paying for all that, AGAIN.
NCC is 100% Inuit-owned and the Board of Directors (all Inuit) make all of the big decisions…
Run by non-Inuit though, board maybe Inuit but the leadership at the staff level is not.
crazy how these guys are getting away with it and no one is holding them accountable.
Accountable for what? Managing multi-million dollar, simultaneous construction projects across the territory in a jurisdiction with a skilled labour deficit and no easy access to raw materials and parts? You salty Bro that you’re not capable of that?
I am, that’s why i am saying this
This Isn’t Just a Delay — It’s Mismanagement.
NCC wasn’t paying contractors, and Nunavut Housing Corp (NHC) was allowed to bypass performance bonds — bonds that every other contractor is required to provide. Why was this even allowed?
These aren’t small oversights. Contractors were owed millions and were threatening to walk off the job. And only recently did payments start to roll in. It’s not hard to see the chain of failure here — and someone signed off on all of it.
Change orders are normal in big projects — but using them as an excuse for massive overruns and delays is a cover for poor planning and lack of oversight. This is a flagship project, and yet there are no guarantees, no accountability, and now no trust.
And while all this was happening, Clarence Synard of NCC declined to comment. That silence speaks volumes.
This isn’t a small project, and NCC was never the right developer for something of this scale. Nunavut deserves better than mismanaged money, unpaid contractors, and silence.
Since we’re all construction experts here, surely any one of these commenters and/or reporters can point to a single building and/or house that has been completed in Nunavut in a single construction season and/or a year. I’m talking all fixtures installed, appliances – and for public housing – all furniture delivered. Anyone?
Nothing ever happens on construction projects that may cause delays right? Like, weather isn’t ever an issue in Nunavut. All parts and materials can be sourced locally in any community, right? Labour is in ample supply of course. All the construction workers have a comfortable place to stay in any community to come home to after working a 12 hour day, 6-7 days a week, right?? Anyone?
Armchair experts in full force over here…anytime anyone does something new, people freak out over nothing because…it’s new and different.
Hey NN reporters, maybe report on something real like, why does Nunavut have the highest rate of syphillis
Cambridge Bay has had multiple pre-fab and modular projects go up. The early ones were less successful but just a few years back 3 pre-fabs were put up rapidly. Time will ultimately tell regarding their longevity but those 3 which all sold to private owners seem to be holding up well.
There are solutions out there. We just need to leave traditional thinking given the change in the high cost construction environment.
Nunavut Construction Corporation is to busy
Bringing people to court
Their safety officer is all over the place bringing Inuit to court so that they can hire more immigrants
While it’s easy to point fingers at NHC and NCC, they have tried to do something different. Its a bold initiative. Read the reports on the cost of procurement before this program. It was over $1000 per square foot. Most of those were from southern construction companies who saw money bags in the North. Under this initiative, that has been brought down – are the costs rising from $630/$670 to $750 really that big a deal if it’s still 40% less than what the market rate was before? The REAL questions this paper (and the public) should ask is what happened to all those Southern firms who made billions off the housing industry up here and said it could not be done for less? They bailed as soon as they saw their gravy train dry up when NHC held them accountable to a price below $1000 a square foot. Did those companies ever do a construction project in Nunavut without a change order? Did they train a local workforce? The only money they left behind was in local bars and restuarants and hotels. Change orders are a fact of doing business in the construction space.
Why don’t we pause for a moment and applaud NHC for using a local Inuit owned construction company to get some of this done. Isn’t it better to keep that money local than have it all sent down south to southern owners? (And let’s be frank, find me a company who can build at this scale that doesn’t have to import labour – its a fact of business in Nunavut right now… and projects like this are a step towards changing it. How else are Inuit going to get trained on building projects while still living in Nunavut?) Some concession for Nunavut owned/Inuit Owned businesses to help build Nunavut is economic reconciliation. Our construction companies have not had the same time to grow or opportunity to get the experience as the Southern ones. Does that mean the GN shouldn’t follow Nunavut -preferred approach to procurement for large projects?
Nunatsiaq (and others) need to calm down and take a breath with their vast (and constant) criticism of this program. It is easy to be an armchair construction expert from the comfort on your own home (often not from Nunavut…) and cast stones. It’s harder to be on the ground and doing the work towards the ambitious goal that is supporting the single most important thing Nunavummiut need right now – access to housing (of various types too!) Bold changes are often not understood at the time they are being made. If Nunavut 3000 even has a fraction of success and say builds only 1500 or 2000 housing units/beds at fraction of the costs of before, is that really a failure?
Let’s do take a breath and review what is a failure.
a) Holding news conferences and galivanting across the territory and the country telling everyone (since 2022) that NHC was going to build 3000 new homes by 2030 and almost 4 years in has not even remotely delivered even close to 10% of that number. Ignoring the Auditor General’s Report, brushing it off, ignoring other information they had been receiving regarding mismanagement and failures and most importantly not standing up and taking action. Acting like rock stars at conferences and trade shows when all they have done is deliver 18 homes in almost 4 years all the while saying, “its better than what was done before”, when almost everyone knows that’s not true. All of that, builds absolutely no confidence in the population. It just makes them suspicious, upset, critical and demoralized. Accountability for what has happened here lies 100% in the lap of NHC and the government.
b) The constant lying and misrepresentation by NHC, its CEO, Its Minister and other members of the government of the actual costs to build these units. They knew since the onset that the price they were peddling was a “unicorn”. Documents that will eventually surface will clearly show this. Again here, unfortunately what Nunavummiut are learning now through the media and other sources is not even representative of what it will actually end up costing. It’s going to be more.
c) Every dollar above and beyond what NCCD claimed it could build for is a dollar taken away from investment in other home construction. Going from $630 to $755 per sq ft equates to millions and millions of dollars when you’re taking about hundreds of thousands of sq ft of builds. The money to pay for those contractual overruns has to come from somewhere. Thats why it matters.
d) The issues surfacing and being identified now regarding NU 3000 and the NCCD agreement has never been about the work done by Inuit firms and Inuit workers. It is clear that the vast majority of Nunavummiut agree that Inuit training, employment and quality of life should be the earmark and constant, unrelenting goal of any projects taking place in the territory. The failure has been that the training program that was supposed to be implemented has been a failure. Almost 4 years into this NU 3000 go and count the number of Inuit certified tradespersons. The harsh and unfortunate reality is “Southerners”, as everyone calls them, are still doing most of the trades work on NCCD sites.
e) Awarding a massive 2000 unit build to NCCD without allowing other INUIT owned Contractors to bid the job and to potentially calculate all the gifts NHC has provided to NCCD (no bonding, major construction items as “allowances”, free lodging, purchase of equipment, money for training, etc, etc..) is totally UNFAIR. We’re not talking about southern companies being afforded these opportunities, we are talking about offering ALL INUIT owned Contractors a fair shot at bidding these builds while receiving all the same gifts that were given to NCCD.
It’s ok to suggest taking a breath but in the face of all this nonsense it’s hard for Nunavummiut to even catch their breath.
Generally a minister makes decisions after consulting with their cabinet colleagues and then sticks with that decision and takes ownership for it. The officials at the corporation, in responding to the reporter, seem to be distancing themselves from this decision in this response:
“The Nunavut government requires performance bonds on all major work contracts over $1 million, but cabinet granted the housing corporation exemptions on this requirement, said Webb.”
This seems to be at the very least a breach of cabinet confidence, and possibly even a breach of cabinet solidarity. I still remember Pat Arnaqaq being removed from cabinet for less.
Once again, not a word on the matter from Premier PJ or the housing Minister.
PJ brushed off questions about the auditor general’s report stating that he hadn’t read it. Well why not? The AG sends their reports to government well in advance of delivering them to the legislature. It’s as if these guys think they are there to look good and smile but don’t need to know anything about their files. I’m so sick of people who all want to be “leaders” but are lazy and run and hide at the slightest sign of trouble.
We all deserve so much better than this.