Whitehorse Daily Star

Frost cites ‘misappropriation’ in stalled project

Frost cites ‘misappropriation’ in stalled project

By Taylor Blewett on November 17, 2017

A $2-million housing construction project in Ross River has had to “cease and desist” due to “misappropriation” on the part of its contractor, according to Pauline Frost, the minister responsible for the Yukon Housing Corp. (YHC).

However, all of the parties now involved – the Ross River Dena Council (RRDC), Indigenous and Northern Affairs Canada (INAC) and the YHC – are keeping mum about what exactly has gone wrong.

INAC provided the RRDC with $2.2 million in 2016-2017 for “house planning, renovations, and construction” in the community of about 400 people, according to INAC Yukon regional spokesperson Rick Massie.

That funding was intended for the demolition of abandoned homes for future builds, renovations to 10 homes and the construction of three duplexes in Ross River.

“To date, the demolitions are complete and the renovations are in process,” Massie wrote to the Star in an email Nov. 2.

Pressed for any information on the duplex build, Massie referred the Star to RRDC.

“When INAC funds a housing project, it is up to the recipient to manage the funding and the project,” he wrote Nov. 7.

“The recipient must report the results of the project to INAC once it is completed. The recipient decides if they would like to share details of the project with other organizations or the public.”

RRDC Chief Jack Caesar has declined multiple requests for information from the Star over the last several weeks, citing ongoing meetings about the duplex project.

Ross River has long been plagued with housing challenges. They prompted the chief to pen a letter to Yukon political leaders in October 2016, calling for help from the governments in Whitehorse and Ottawa.

Nearly half of the community’s 130 homes were unsafe to live in .

Sixteen others had to be abandoned due to their condition, his letter detailed.

Toxic mould, radon, petroleum and sewage were said to be found in homes throughout the village.

The still-campaigning, soon-to-be governing Liberals put out a statement in response to Caesar’s letter.

“The housing situation in Ross River has reached emergency proportions,” it reads. “A Yukon Liberal government will make this a priority early in its mandate as government of Yukon.”

It’s not clear when the Yukon government became involved in the duplex build in Ross River, but it came up in the legislature Nov. 9.

How much spent

Frost responded to a question from Yukon Party housing critic Wade Istchenko about what money, if any, the Liberals have spent on housing in Ross River – aside from six units of former Yukon government staff housing the government is making available to the RRDC.

Frost referenced “funding allocated from the federal government of $2 million for a project to build additional units in the community.”

The YHC has “stepped up to the plate” and started working with the RRDC, Frost said, to respond to what she went on to call “the current duplex projects that were started” and were not completed.

“Why? Because they ran into some challenges with a contractor out of Vancouver. That project had to cease and desist,” the minister told the house.

Frost said the YHC has been meeting with the RRDC to provide “some intervention” and with the contractor as well. At that point, she said, “we ran into a bit of a challenge.”

This contractor has not been named by the Yukon government, INAC, nor the RRDC.

However, a Vancouver-based company called AYO Smart Home has a page on its website dedicated to a Yukon construction project: three duplexes in Ross River.

“Construction is underway in Ross River! In April 2017, we began the construction of three duplexes for the Ross River Dena Council (RRDC),” the website reads.

“We are honoured to be building for RRDC as our first community project. Designs were made in consultation with Chief & Council and we are working to construct the homes with the help of local labour.

“Construction is nearing the lock up stage for all 3 duplexes and we’re excited to get them wrapped up and ready to move in!”

A call to the company’s listed phone number yields a “not in service” message.

The Star found AYO’s project engineer – the only employee listed on the company’s website – on LinkedIn and reached out for comment from AYO.

The engineer responded via LinkedIn message and said the company’s management has decided not to speak to the press at the moment.

However, he also noted that he has not been working with AYO for a couple of months.

“It disheartens me and it makes me sad that the contractors that come into these communities take advantage of the communities and they don’t work in good faith and we see failures,” Frost told the house Nov. 9.

“The failures result in communities suffering as a result of that misappropriation.

“What we’re doing right now is working with the Ross River Dena Council in securing a local contractor to look at the three duplexes and trying to ensure that we get those built as quickly as we can, in collaboration with our partners.”

It’s not clear what the current state of construction on the duplexes is.

However, Frost did tell the legislature that “the follow-through on that project is starting then from the foundation back up.”

On Wednesday, Yukon Party interim leader Stacey Hassard asked the minister for further information on the duplex contract and any wrongdoing alluded to by her talk of “misappropriation” the week before.

“If the member opposite wants specific details on a project that the Ross River Dena Council has contracted out to the private sector, they can go to the Ross River Dena Council and get that specific information,” Frost responded.

She did confirm in the house last week, and again this week, that the Yukon government is providing advice and support to the RRDC.

The YHC is not, however, taking over responsibility for the duplexes.

As well, the Yukon government is not providing RRDC any financial resources to move forward with the project.

“Putting more money into the community is not going to address the problem,” she said Nov. 9.

Reporters pressed Frost for context on Thursday. She referred the media to the INAC regional office.

“We are there to help when we can. The responsibility really falls on the shoulders of the federal government,” she said.

Hassard is the MLA for Pelly-Nisutlin – the riding in which Ross River is located. He said his party was hoping to glean more details from the minister after she made comments about the duplex project in the house.

“Having this information would help me communicate and provide an update to my constituents. Unfortunately, the minister did not provide any more detail.”

On Wednesday, the Star’s request for more information from the Liberal cabinet was directed to the YHC.

The housing corporation, however, did not provide any of that information to the Star by press time this afternoon.

Comments (24)

Up 1 Down 0

Sk90 on Nov 22, 2017 at 8:56 pm

RRDC is way overdue for a good long time under the microscope, just like LFN still is after several years. All that money is going somewhere, while the rotting and unliveable buildings remain.

Up 1 Down 0

Why? on Nov 22, 2017 at 4:38 pm

Why don’t the residents knock some trees down and build themselves some log homes. Perhaps some pride of ownership and pride in building there own homes would set in and they would look after them. Slice through the red tape and do it yourself people. It is really worth the effort.

Up 2 Down 0

Groucho d'North on Nov 22, 2017 at 3:13 pm

$2 million tax dollars have mysteriously disappeared, and it appears that government is sitting on its thumbs stuck in neutral, or is trying to shove responsibility over to another level of government to follow up. In the private sector we call that "failure to manage", I wonder what it is called in government these days?

Up 14 Down 0

comen sence on Nov 22, 2017 at 8:40 am

This is setting one huge precedent, where does this money come from, our tax dollars, what? They say we are doing great economically now, but if this country ever takes a downturn, with the spending that is done with the incredible top heavy government then what? This kind of spending for one small village, is crazier than Trever the dog episode.

Up 12 Down 0

Resident on Nov 21, 2017 at 9:06 pm

They should also look at the housing coordinator and directer who are always getting paid travel to whse.

Up 17 Down 3

Just Sayin' on Nov 21, 2017 at 12:58 pm

I am sure Mr. Walsh is gathering materials for another lawsuit.

This is the problem with all government, not enough qualified people.
Don't worry, through the new government hiring program they will ask for companies with 80% experience and 20% FN support and those companies will be pre-qualified to bid on jobs.... So, any FN company that forms a venture, will get hired on and do you know who benefits; the company and the band officials. Not the community, not anyone else.

Also, when the houses are constructed because we are required to take care of the FN through the BNA act, who will be going around doing the maintenance on them? FN have shown that some cannot take care of their houses hence the sewage issues, broken windows etc. So, Ms. Frost will need to look at a care and maintenance contact for the housing in RR... RR reminds me of the Faro Mine, always dumping money in, but nothing gets done.

Up 6 Down 0

joe on Nov 21, 2017 at 10:27 am

@ROREX 1983- I agree, although I'm not sure which of the two is worse.

Up 12 Down 2

First Nations capacity on Nov 21, 2017 at 9:28 am

To lump First Nations Communities all in one statement is wrong and disrespectful. Ross River does not have the capacity, that is correct.
They are one of the communities which has not settled land claims.
A lot of First Nations in the Yukon have build up their capacity and manage their own housing program in a solid manner like any other group in the Yukon.
I have worked for and with First Nations governments.
As a person who has many years working in the housing industry, both in the public and private sectors, housing is not easy to do especially in the Yukon.
The 14 First Nations in the Yukon might consider looking at getting together and building a prefab housing plant in the Yukon.
The study has already been done and it is in Department of Economic Development files.
All it would need is to be up dated to today's situation.
Second, I think you have to get approval from the owners of the study.
This would solve this and many other housing issues in the Yukon.
Wilf Carter

Up 13 Down 0

Josey Wales on Nov 20, 2017 at 5:29 pm

Misappropriated they say eh? A lot more letters in that word Vs. theft or fraud.
Good old yukon never lets us down, quite a few foxes guarding the hen house in these parts.
Most places call that a racket, we call it our economy.
How about an update on those misappropriated shot guns and cash from DoE awhile back?
Hoping we will misremember the chronic misappropriating?

Up 16 Down 0

Rorex1983 on Nov 20, 2017 at 1:46 pm

While I agree YHC is not good, HPW is way worse. Yes, the private sector and even the local private sector are best suited for this sort of a build but let's be clear HPW is the worse department or crown corporation in the Yukon.

HPW is far too big to succeed at anything, and Departments of that size are the reason that government is known for being way behind the times, stuck in their ways, and overly bureaucratic. The best departments in the government are those that are small so employees see the big picture and those with a specific well-defined purpose. This is true in the private sector too.

Up 21 Down 1

Rorex1983 on Nov 20, 2017 at 1:38 pm

Just Say'in has got it right and Yukoners see this all too often.

Anyone who has experience working with First Nation governments knows that most don't have the capacity or in-house experience to manage a budget or contract of this size. Begs the question of how self-governing some of the self-governing first nation governments can be. Would not RRDC have been better served if a larger government managed this contract? And does someone else acting on their behalf with their input really question their independence?

Up 19 Down 2

Just Say'in on Nov 19, 2017 at 3:05 pm

Gov. Gave the money to RR and it was up to them to deal with it. There was no Gov. oversight.

This involved tearing down some homes, renovating some homes and building some duplexes. Did the band even have any idea of the scope of this project? They probably at best just ran out of money and hence the contractor left or at worse someone in RR received money for some sort of consulting or something and the money is gone. When money is handed out by Gov. there must be oversight.

Up 18 Down 1

Joe on Nov 19, 2017 at 1:43 pm

YHC doesnt have the qualifications to deal with this. Why are they even in the discussion. This should go to HPW and private sector (yukon)

Up 38 Down 1

Builder on Nov 19, 2017 at 9:37 am

"Toxic mould, radon, petroleum and sewage were said to be found in homes throughout the village."
These are not "challenges", this is lack of maintenance. Period.

Up 25 Down 1

yukon56 on Nov 18, 2017 at 6:37 pm

Normally there are checks and balances in place for any construction projects. Progress must be signed off and then the funds are released. How much is left, little I think if the contractor is gone.

Up 10 Down 20

wondering on Nov 18, 2017 at 12:40 pm

If the people of RR voted in Stacey Hassard, why doesn't he ask them for the details as Ms. Frost suggested? Sounds like he doesn't know anyone in the community. Who elected him? Maybe not many in Ross River. I don't know. Just doesn't sound like he has any relationship with them. How many visits has he done to Ross River? How many events has he participated in?

Up 19 Down 5

jc on Nov 17, 2017 at 9:15 pm

Contractor hasn't made any statement yet. Obviously they just need time to get their lies together. And if this is how the Liberal government works - giving money to outside contractors without guarantees then the Libs will have to pay the price in the next election. I hope the voters have good memories.

Up 15 Down 2

How much money was taken? on Nov 17, 2017 at 8:36 pm

Did the company have a bond, to protect Ross River?
Was there a proper evaluation of the company doing the work?
What experience did the company have to do this work?
RCMP should be involved with?
The Yukon Government politicians, made the statements, to the Ross River people, we will help you but just messed it up.

Up 22 Down 1

Why employ a contractor out of Vancouver? on Nov 17, 2017 at 8:31 pm

The issue here is capacity to actually manage the project.
Governments have a responsibility to make the group who receives the funding.
Blaming someone else is just a cop out, on responsibility.

Up 30 Down 3

Just Say'n on Nov 17, 2017 at 8:23 pm

So the Ross River Band received the money and were completely incapable of overseeing the contract, imagine that. When will people learn that there is not enough expertise there to handle this kind of money. At best it is incompetence at worst corruption. We may never know as it seems everyone is cutting and running. Everyone is too PC to be able to speak to the issue.

As a tax payer I should know exactly what happened with that money. This is why all the money they have received in the past for housing has been squandered.

Up 33 Down 2

Fred Sullivan on Nov 17, 2017 at 6:43 pm

Looked at their website and the qualifications of the engineer that no longer works for them. An Iranian mechanical engineer who has a CV with a lot of overlapping schooling and jobs. Curious how he managed to be in so many different places at the same time. None of the 'qualifications' includes residential construction in a northern environment. AYO seems to have a lot of divergent interests. Only incorporated in 2014.
Lots of questions.
Why did RRDC trust these guys with $ 2,000,000.00 in taxpayer $s?
How did they select them, they're obviously not qualified?
Why isn't there any oversight from the Feds? It is taxpayer money.
Normal construction projects get payments based on progress, so how did the money get "misappropriated" (Ms. Frost's words)
It's easy to blame an outside contractor but somebody signed the cheques they cashed. You don't pay upfront unless there is something very wrong with the relationship between contractor and client representative.

Up 26 Down 3

Matt on Nov 17, 2017 at 5:01 pm

hahahaha.....all getting what you deserve, except of course for the people in Ross that need the homes. Govt and various agencies of Govt continually look South for cheap contractors that have to google "Yukon" to find out where they bid. Dumb and dumber!

Up 15 Down 1

yukon56 on Nov 17, 2017 at 3:51 pm

Who has the money can you guess?

Up 31 Down 0

ProScience Greenie on Nov 17, 2017 at 3:26 pm

Good journalism in this story. Keep digging.

Looks like another consultant type scam. Follow the money. Follow the players.
Not hard to build simple homes but if it's kept simple then there's no gravy for the various players. Sad to say but it's the Yukon Way.

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