GN on hook for Cape Dorset school fire
Insurance did not account for 2010 renovation, will cover far less than value
Beth Brown
Northern News Services
Saturday, November 12, 2016
NUNAVUT
Peter Pitseolak High School was under-insured when it burned down last fall.
Peter Pitseolak High School was under-insured when it was destroyed by fire last fall, as GN insurers were unaware of a $17-million renovation done in 2010. - NNSL file photo
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The GN failed to inform its insurance company of a $17-million addition and upgrade made to the building in 2010.
Insurers valued the property at $14-million, according to MLA David Joanasie.
The issue came up while reviewing Bill 21, regarding the Write-off of Assets Act in a legislative assembly meeting on Nov. 8.
"When the school burned down, we learned that it was underinsured, so we couldn't put a claim in for the remaining value of the school, the book value," said Finance Minister Keith Peterson.
But that wasn't the worst of it.
"There have been three schools in the past that burned down, I believe. The insurer decided there would be a $10 million deductible. In essence, we were to become self-insurers."
As MLA for the constituency, Joanasie had questions.
"We're all aware that the capital items usually have insurance," said Joanasie. "The fact is that there was no insurance for the school and we're going to have to build a new school using the government's money. Can the minister give us an update to today? Are all government infrastructure insured?"
Peterson said the misstep led to a further discussion with insurers to make sure other buildings owned by the territory were insured to their appropriate value.
Joanasie also wanted to know if large infrastructure is ever insured at a higher total of the asset price, given that renovations are standard practice.
Deputy Minister of Finance Jeffrey Chown said government assets are initially insured for their basic value at time of construction, and insurance is only increased following an upgrade.
"Obviously in this particular situation, there was a communication error and the asset was under-insured," Chown said.
He echoed the finance minister, saying that the Risk Management and Insurance Division has been working with Community and Government Services to do a full review of government assets and make sure this doesn't happen again.
The Cape Dorset school has received considerable attention at recent legislature meetings, including a language scandal that rose from unfounded claims of teachers banning students from speaking their native tongue because the English speaking educators couldn't regulate bullying in Inuktitut.
The assembly also spoke about plans for upcoming build of a new high school in the hamlet.
Since the fire, students have been working into the evening in classrooms at the elementary school. Recently, a series of modular classrooms were built to house the students until the new school is built, and this is helping increase attendance.
