MLAs question ministers on $80M increase to fibre optic line project
“I look at my colleagues here and we have a lot of suggested uses for $80 million”
Some Nunavut legislators are questioning what they feel is an unjustified increase in funding to the territory’s Nuuk-Iqaluit fibre optic project.
In August, the federal government committed $151 million to the project, which involves 1,700 kilometres of fibre optic cable running from Nuuk, Greenland, across the Davis Strait to Iqaluit. From there, a branch will extend to Kimmirut.
The Government of Nunavut will design and execute the project, set to be complete by 2023.
Last year, MLAs approved the project, which was originally supposed to cost $126 million.
“After this year passed, we received notification that the project cost jumped commensurate to increased costs and now is estimated at $209 million,” John Main, MLA for Arviat North-Whale Cove, said in his member’s statement on Wednesday, Oct. 23.
That’s an $80-million difference, Main said.
“I look at my colleagues here and we have a lot of suggested uses for $80 million,” Main said.
The federal funds come from the rural and northern communities infrastructure stream of the Investing in Canada Plan.
The project is also currently before the legislature’s committee of the whole as it reviews capital expenses for 2020-21.
Later that day during question period, Joelie Kaernerk, MLA for Amittuq, asked Lorne Kusugak, minister of community and government services, if the $80-million increase had gone through the government’s preplanning process.
That process, as defined in the GN’s capital planning process handbook, “is intended to ensure that the program is clearly defined, and that enough information is available to develop appropriate scope, a reliable cost estimate and schedule, prior to proceeding further in the capital planning process.”
“Did it go through the preplanning stages, yes or no?” Kaernerk asked Kusugak.
“The planning has been done and trying to come up to a definitive figure as to how much it would cost. Once we got more information, we found out that it would be much more expensive,” Kusugak replied.
Main, who sits next to Kaernerk in the assembly, rose next to continue questioning Kusugak.
“Can the minister explain how a project of this magnitude can see such a huge cost increase in the space of one year?”
Kusugak repeated that after the money requested for the project was approved last year, the department reviewed the project and the cost increased after that review.
Kusugak added that in May 2019, his department determined that the funding request to the federal government should be increased to $201.6 million “in order to ensure that maximum available federal funding contribution was available for this initiative if required.”
The next day, on Oct. 24, Main rose again during question period to press Finance Minister George Hickes on the same point.
“In terms of the financial management board, what specific processes and actions took place following that notification from the department that there was an $80-million cost increase to this ongoing capital project?” Main asked.
Hickes said because the federal government increased its contributions to the project, along with a fully funded marine survey of the proposed project area, the GN increased its funding too.
“The Department of Community and Government Services brought it back to [the financial management board] with the recognition that the cost estimates were under-estimated.”
Hickes also pointed out that the GN contributes one-quarter of the money for the project, while the federal government contributes the other 75 per cent.
“As the GN, we’re not on the hook for $80 million, we’re on the hook for 25 per cent of that. So we will be looking at sometime down the road in future fiscal years, be looking at additional funds to complete out this project,” he added.