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Stanton hospital renewal project costs balloon to $1.2 billion

Canada's auditor general levels sharp criticism over GNWT's management of new hospital
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"The departments of Finance, Infrastructure and Health and Social Services, and the Northwest Territories Health and Social Services Authority, could not show how the Stanton Territorial Hospital Renewal Project provided residents of the Northwest Territories with good value for money," the Office of the Auditor General of Canada stated. NNSL file photo

Canada's auditor general is not impressed with how the new Stanton Territorial Hospital came together.

"The departments of Finance, Infrastructure and Health and Social Services, and the Northwest Territories Health and Social Services Authority, could not show how the Stanton Territorial Hospital Renewal Project provided residents of the Northwest Territories with good value for money," an Oct. 29 news release reads.

That news release is only one small part of a much larger report from the Office of the Auditor General of Canada. The document reveals that the projected costs for the 30-year life of the project have reached about $1.2 billion. That is about a 62 per cent jump compared to the forecast contract costs from 2015.

Deputy auditor general Andrew Hayes states that the government departments and the territorial health authority could not show the renewal project provided solid value for taxpayers because of three failures:

SA国际影视传媒淔irst, decisions that significantly changed the projectSA国际影视传媒檚 scope over time were not based on evidence or analysis; second, key costs were not considered or were underestimated when planning the project; and third, there was little evidence to show whether the project provided expected economic benefits to local and Northern businesses.SA国际影视传媒

The report also highlights that roles and responsibilities for the management of the project have not been well defined among the departments of Finance, Infrastructure and Health and Social Services and the NWT Health and Social Services Authority.

"The Department of Infrastructure could not provide us with evidence that it had verified that the over $71 million it reported as going to registered local and Northern businesses was accurate," the report reads.

Boreal Health Partnership is the contractor hired for this project.

Also, according to the report, the GNWT's sublease made the government a rent-paying tenant in its own building. Meaning, it was paying the developer rent and other fees as a tenant in its own building and taking back some of the risks it had intended to transfer to the developer for nearly 30 years.

"The departments and the authority moved forward with a lease arrangement on the premise that it would achieve the best value for money;" the report states. "However, the government subsequently subleased the entire building back from the developer for its own use without the Department of Infrastructure reanalyzing whether this option would still achieve good value for money."

During a press conference on Oct. 29, Hayes said he's perplexed by the GNWT's actions. 

"I'm concerned by the way these decisions happened," he said.

He added that the GNWT had a number of incomplete conflict-of-interest declarations. However, he did not find any in the materials he examined.

There's also some murky waters around a supposed $71 million that was supposed to go to local and Northern businesses, due to Boreal Health Partnership's work on the hospital.

"That number is not accurate," Hayes said.

Whether costs surpass $1.2 billion, is hard to say, said Hayes. At the moment, that figure remains the projection.

Former NWT health minister Michael Miltenberger originally estimated a renovated Stanton would cost upwards of $200 million but abandoned that idea in favour of a complete rebuild, originally estimated at $300 million, which then rose to $350 million.

During a scrum following Hayes' briefing to the press, when asked who will be held accountable for these gaps in information, Finance Minister Caroline Wawzonek said she does not have a big concern with a lack of government transparency.

"Going back 10 years, what they're saying now is that some of the records that you had at the time, notes, notebooks, etc., some of the records of decisions weren't there, weren't signed," said the minister. "The good news is that a lot of those processes are part of what we have changed in the last few years."

One example she highlighted includes a procurement committee, a place to put the territorial government's guidelines.

"A lot of that change has just gone out. This is a good opportunity to go out, make sure that what is still fairly new for us is, in fact, going to be complying with the best practices that we have in front of us."

This story has been updated to reflect comments made by Finance Minister Caroline Wawzonek.



About the Author: Devon Tredinnick

Devon Tredinnick is a reporter for SA国际影视传媒. Originally from Ottawa, he's also a recent journalism graduate from Carleton University.
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