MLAs stall passage of CGS budget

How much is it costing us?

Until MLAs get an answer to that question, they will refuse to approve the Depart­ment of Community and Government Services budget.

The information they want, but could not get as of Nunatsiaq News press-time this week, is the cost of a controversial office space lease for a building owned by the Enokhok Corp. of Cambridge Bay.

The Enokhok Corp., whose shareholders once included Kelvin Ng, the former MLA and cabinet minister, signed a 20-year office space lease in 1986 with the Government of the Northwest Territories, worth about $1.2 million a year.

That deal, inherited by the Government of Nunavut in 1999, expired in February of 2006. Since then, the GN’s CGS department and Enokhok have continued the lease through what’s called an “overhold.”

But when MLAs discovered last week that the two sides worked out a new lease in a deal that’s now ready to go to cabinet, they said they won’t vote to approve it until they get more information about how much it will cost.

Every afternoon since March 7, MLAs have formed themselves into a “committee of the whole” to study the GN’s 2007-08 budget line by line, department by department, with cabinet ministers and other officials appearing as witnesses.

That work ground to a halt March 14, when MLAs started asking questions about the status of the Enokhok lease during scrutiny of the CGS department’s budget. The CGS department now performs the procurement work that used to be done by the old Public Works department.

Levinia Brown, the minister of CGS, her deputy minister, Pam Hine, and Mike Rafter, the department’s financial comptroller, told MLAs that the GN’s lease payments on the 33,000-square-foot building would be 20 per cent less than what the GN pays on average for leased space.

And they said the GN would own the building after the second lease expires, but they didn’t say when the new lease would expire.

They added that the GN would spend $2.2 million during the first two years of the new lease to make improvements to the aging building.

But they would not tell MLAs about the exact financial terms of the new deal, such as how much money it will cost the government each year. Rafter said that’s “privileged information” and that the lease has not yet been signed.

That answer did not please Keith Peterson, the MLA for Cambridge Bay.

“We are members of the legislative assembly. We are the guardians of the public purse,” Peterson replied.

Peterson went on to say that since the department has already made a recommendation on the lease to the financial management board, they must have some figures that can be provided to MLAs.

A few minutes later, Hunter Tootoo, the MLA for Iqaluit Centre, introduced a motion to defer the CGS budget until MLAs get the information they want.

“It is public money that we’re going to be voting on in this budget, so I think until we get more information that this department be deferred,” Tootoo said.

After Tootoo’s motion passed, MLAs skipped the rest of the CGS department’s budget and jumped into the Department of Culture, Language, Elders and Youth.

When the GNWT signed the Enokhok lease in 1986, it was normal for the territorial government to sign no-bid, untendered deals with private community development corporations, mostly long-term leases for office space or staff housing whose terms were shrouded in secrecy. Those deals usually received little public scrutiny at that time.

Critics said this practice was financially irresponsible and exposed the territorial government to accusations that such leases were a licence to print money for politically-connected business people.

But GNWT officials defended them as a way of helping aboriginal people get into the real estate business in their own communities.

But in 2001, the Auditor General of Canada, Sheila Fraser, told the Nunavut government that they must give the legislature more information about its leases so MLAs understand their true costs before voting to approve them.

Fraser said that as of 2000, the GN was committed to making $486 million in lease payments over the next 20 years, and the following year signed itself on to another $145 million in new leases.

The auditor general said MLAs weren’t getting a chance to properly scrutinize these lease agreements because the GN did not include the information in budget documents.

In one lease, the auditor general said, the final cost to the government was 50 per cent higher than if the government had paid cash for the building.

To prevent these mistakes in the future she recommended that GN officials evaluate new leases to find out whether it’s cheaper for the government to buy such buildings or build them with its own money.

Levinia Brown and her officials told MLAs that officials did do such an evaluation before deciding to renew the Enokhok lease.

As of press-time this week, MLAs had not returned to the CGS department’s budget.