NCC leases cost between $19 and $22 million a year

MICHAELA RODRIGUE
Nunatsiaq News

IQALUIT — The federal government will give Nunavut between $19 and $22 million each year to rent offices and staff houses built by Nunavut Construction Corp.

The federal government would not disclose the exact prices for leasing each of the 250 housing units and 10 office buildings that NCC is building for the Nunavut government.

But the price tag falls within the $19 to $22 million federal government officials estimated in 1995.

Wilf Attwood, Nunavut’s regional director general for Indian Affairs and Northern Development, says Ottawa gives the money to Nunavut through Nunavut’s formula financing agreement with Ottawa.

But Attwood said Nunavut may only be use the money to pay the cost of NCC’s leases. The money covers rent and other operations and maintenance costs such as water, sewage, fuel and cleaning.

The federal government agreed to pay the leases for 20 years. Once each building is complete, the Department of Indian Affairs and Northern Development signs a lease with NCC.

The same day, Ottawa turns those leases over to the Nunavut government.

After 20 years, NCC will still own each of the buildings — including the legislative assembly — and the Nunavut government will have to decide whether it wants to negotiate new deals with NCC.

The arrangement means the federal government pays 100 per cent of the lease costs for the NCC buildings, Attwood said.

“The federal government realized there was an initial injection of capital needed to get the Nunavut government up and running,” he said.

The Nunavut government also leases other buildings outside of this agreement.

Attwood and Ernie Bies, a project manager for Public Works Canada, said the project has been a success because it will be completed ahead of schedule and within the budget. Attwood said it would be more expensive to purchase the buildings outright instead of leasing them.

And it allows the Nunavut government to vacate the buildings in 20 years if the building are no longer suitable.

The Nunavut government, however, must pay out of its own pocket if it wants to renovate or retrofit any of NCC’s buildings.

For example, when the Nunavut government decided to boost the number of its cabinet ministers, it needed to alter the legislative assembly. The Nunavut government picked up the bill for those extra costs, Attwood said.

Attwood and Bies say the project has been a success, but they won’t divulge exactly how much it costs to rent each of the buildings.

“The normal policies of the government is not to disclose the financial details of a particular lease. That generally is held confidential between the developer and leasees,” Attwood said. If the financial terms of government leases were disclosed, it may affect the size of future bids by developers, Attwood said.

To date, NCC has finished building 104 housing units, two office buildings and the legislative assembly building in Iqaluit.

It expects to finish construction on the entire project next spring, said Cody Kenneally, NCC’s employment and training co-ordinator.