Finance minister Michael Miltenberger says his government ‘made clear’ a significant change in plans for Yellowknife’s hospital.
Speaking to Moose FM, Miltenberger also defended the territory’s financial record and its transparency when signing major infrastructure agreements.
Several MLAs feel they were kept in the dark about plans to build an entirely new hospital in Yellowknife. Until recently, the territory’s plan had been to significantly upgrade the existing Stanton facility.
Last week, in announcing the signing of a deal with Boreal Health Partnership, the territorial government made barely any reference to this change and offered no new detail. On Tuesday, in brief public comments, Miltenberger noted the estimated cost had risen to $350 million before spending two hours briefing MLAs in private.
Moose FM: Not too much is known about how things changed over the last few months. Give us an insight into how and when plans for Stanton transformed into plans for a new hospital.
Michael Miltenberger: About a year ago.
For almost all of the past year, it has been presented as a redevelopment of the existing site. That seems to have changed. Is that correct?
When did that change?
Well… the discussions started about a year ago. There was a decision made that we would have the option, and there was a lot of support and encouragement from the regular members, so that option was left open to the various bidders.
When the territorial government announced the signing of that agreement with Boreal Health Partnership last week, very little attempt – if any – was made to specify quite a major change, in that this now meant a new facility and not a substantial redevelopment of the existing building. Why was that?
You assume I agree very little effort was made to tell everybody. It was clear. It was clear in the request for proposals that the opportunity was there. We picked a successful proponent. The proponent added that option in its bid. As we finalized that bid, work was done on that basis.
It doesn’t seem to have been clear to some of the MLAs in the room. Why is that, do you think?
The option was clear. The fact that we were in confidential negotiations with the proponent – the actual detail wasn’t available.
So at what point did you inform regular MLAs that, in actual fact, you’re building a new facility here? It sounds like there were several MLAs in the room for whom this was news.
Well, I don’t want to get into discussion over what MLAs say they may or may not know.
It’s quite important.
I’m not going to guess. The fact is that it was there as an option, it was referred to, it was being considered as we were in final discussions with a proponent. What wasn’t clear was ‘here’s what they’re proposing in terms of design’, so we spent two hours last night walking through all the development that has taken place in regards to what constituted the successful bid.
Should MLAs have been walked through that earlier?
That’s a bit of a hypothetical moot point, isn’t it?
It’s a point of process that was brought up yesterday in relation to the separate matter of what could be termed your diesel subsidy, by Daryl Dolynny. How do you respond to the suggestion of some MLAs that due process in this instance, in that instance, and in the Inuvik-Tuk instance, is maybe not being followed?
I would argue that due process is. And we have the most due of processes in the whole country – maybe with the exception of Nunavut – being consensus-based, where there is involvement throughout this whole process on every project we do. There are some, in this case the P3 one with the hospital, where they weren’t at the table when the decision was made any more than they were at the table when we picked a successful proponent for the P3 project with the fibre-optic line. We told them all about it, we informed them, we showed them what’s being proposed and who’s the consortium, just as we’ve done with this one.
If there are adjustments to be made to that process it would be at this juncture, given we’re at the end of the life of the assembly. I’m assuming there would be discussion about that process, if it’s not deemed adequate by the incoming legislature.
I wanted to ask you about the financial situation the territory is in right now. How would you characterize the financial strength of the territory as we head into the 18th assembly?
I think it’s very good, actually. The economic climate and landscape is fairly grim, in terms of our projected revenues. We know we have to control our costs. We have an AA1 credit rating, one of the best debt-to-GDP ratios in the country, our interest costs as opposed to our revenues are very, very modest – but we have challenges. We cannot let it get out of hand. This is the second recession we’ve been through and we are still delivering a high-quality full slate of services and programs. We’re going to be involved in negotiations with our employees about a fair and affordable collective agreement. All things considered, with all the challenges included, we can manage this if we make the right choices.
Keeping costs under control. Not letting things get out of hand. If we look at the Capital Estimates (pdf) tabled yesterday, the initial estimates for 2015-16 seem to be roughly $98 million lower than the revised estimates for 2015-16 in that same document. Almost a nine-figure sum of money seems quite a large one not to have foreseen in the initial estimates. How does a discrepancy like that come to be?
There are additions to the capital plan and spending, so we included those.
How does that fit with keeping costs under control?
Well, we have to look at the bottom line and we have to look at… let’s talk about lapsing of money that’s not spent, let’s look at revenues, let’s look at our expenditures overall and we have to make strategic investments. We’ve indicated that we are prepared to borrow money, within reason, to make strategic investments.
But if that were to happen every year, it would make a mockery of the estimates, wouldn’t it?
If it were to happen every year – just like low water, forest fires, yeah. We estimate, then we respond and adapt. It’s the government’s responsibility to manage risk and be nimble, and I think our record speaks for itself. We have a very good record, we have a well-managed budget, it’s been acknowledged by our auditors and guys that do credit ratings and such. We manage any number of challenges and still look after the public purse very, very responsibly.
In the two hours that you spent with MLAs last night, what guarantees were you able to give them that the public-private partnership to build a new Stanton Hospital would come in – in your words yesterday – ‘on budget and on time’?
We have numerous checks and balances. If the money doesn’t flow, if certain criteria aren’t met… we have a very strong agreement, we have a deal with a very, very capable consortium. I have every confidence that we have designed a very good arrangement on a P3 basis, the same as we did with the Mackenzie Valley fibre link. It’s there, it encompasses both the hospital and the renovation of the old hospital, and that’s all there available, all 1,600 pages are in the MLAs’ hands. I’m sure that’ll become a public document at some point, so we’ll stand by that.