NUNAVUT - The Nunavut Housing Corporation made "serious" budgeting mistakes managing the Nunavut Housing Trust, leading to a $60 million shortfall, representatives for the NHC said during a press conference on May 6.

Housing Minister Hunter Tootoo at a press conference in Iqaluit on May 6. The Nunavut Housing Corporation needs an additional $60 million to complete houses scheduled to be finished this summer. - Kassina Ryder/NNSL photo

The federal government provided $200 million in 2006 to construct approximately 726 houses across the territory.

During the conference, NHC president Alain Barriault and housing minister Hunter Tootoo said the trust will need an additional $60 million to complete projects.

Less than half of the houses, 319, have been completed. The remaining 407 are scheduled to be finished by the end of the summer, Tootoo said.

"That's the way the schedule is set up right now," he said. "All the Nunavut Housing Trust projects are scheduled to be completed this construction season."

Problems with the trust were originally identified by newly hired chief financial officer Lori Kimball, who informed Barriault when he became NHC president in December 2009.

Once Kimball completed her examination of both the trust and the Affordable Housing Program, Barriault presented the information to Tootoo on April 1 of this year.

"It's effectively an overrun that has been building over a four-year period," Barriault said.

Improper budgeting and increasing labour costs are to blame for the shortfall, Tootoo said. He said labour costs were 72 per cent higher than predicted.

"In dollar terms, the cost of an average home was $75,000 more than expected," he said.

Tootoo also cited a general lack of oversight when it came to keeping track of spending.

"NHC missed this problem every year for four years," he said. "If it had tracked expenditures properly, it could have regained control much earlier. It could have prevented the cost of overruns from reaching this total of $60 million."

Twenty million will come from the NHC budget and the additional $40 million will come from the Nunavut Government, Barriault said.

"We will reallocate within the NHC budget and request supplementary appropriations from the government," he said.

The Affordable Housing Program, which the federal government provided with $100 million for the construction of 285 homes, will also be affected, Barriault said. The estimated cost of the projects will be determined in June.

Tootoo said the NHC must now give a monthly report on its operating procedures, including spending and the progress of construction projects. An independent accounting firm will also produce a report on the discrepancy.

Deputy minister of community and government services Katherine Lausman has also been appointed to the NHC executive committee, Tootoo said.

He said Lausman is "someone that has extensive background in project management because I think that's where a lot of this arose from, along with the budgeting."