High construction costs cancel projects across Nunavut

New housing units and a power plant are among the cancellations after bids come in over budget.

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Kugluktuk MLA Bobby Anavilok and Uqqummiut MLA Mary Killiktee (right) asked the legislative assembly Wednesday why major construction projects in their communities had been cancelled. (Emma Tranter / Nunatsiaq News)

Rising construction costs have cancelled or delayed critical infrastructure projects across Nunavut, the territory’s legislative assembly heard Wednesday.

During question period, four MLAs queried cabinet on why projects previously approved in their communities have suddenly been halted.

Netsilik MLA Joseph Inagayuk Quqqiaq said housing units promised in Taloyoak, including two fiveplexes, still haven’t been built.

Housing minister Lorne Kusugak said although the tender for the Taloyoak units closed in March, all the bids came in well over budget, at around $1.1 million per unit.

“They were just all way too expensive,” Kusugak said. “The housing corporation just doesn’t have that type of money.”

This isn’t the first time in recent years the Nunavut government has cancelled projects due to rising costs. Canada’s rising inflation rate, high fuel prices and supply chain delays have all affected construction in the territory during the COVID-19 pandemic.

The government’s mandate, which was tabled in March and sets out priorities for the next four years, pledges to build 1,000 new housing units across the territory.

More than 3,000 new units are needed to accommodate housing demand in Nunavut, according to a 2020 report by the Nunavut Housing Corp.

Quqqiaq asked how the government’s mandate could still be fulfilled, given skyrocketing construction costs.

Kusugak said he is working with the private sector and trying to find “innovative” ways to lower the price of construction.

“We can’t do $5-million per fiveplex … This government doesn’t have that kind of money,” he said, adding the government still wants to build 1,000 units.

“That goal is achievable and we are working towards that.”

Bids submitted in March for construction of Sanikiluaq’s hamlet office, which was destroyed in a storm in 2020, were also rejected because they came in over budget, the assembly heard.

Community and Government Services Minister David Joanasie said because of this, the government will need to seek additional funding for the project. During the assembly’s last sitting, MLAs approved $13 million to rebuild the office.

And in Clyde River, construction of a visitors centre for the community’s Agguttinni Territorial Park was also cancelled because of high construction costs.

“It is very regretful,” Uqqummiut MLA Mary Killiktee said.

Environment Minister David Akeeagok said the government is working with the Qikiqtani Inuit Association on a joint project to get the visitors centre built.

In Kugluktuk, the community’s 50-year-old power plant needs to be replaced but MLA Bobby Anavilok said that hasn’t happened yet.

That’s because bids for a new plant came in well over budget too, said Craig Simailak, minister responsible for Qulliq Energy Corp.

Simailak did not have details on when that project could be built.