Hospital contractor’s quagmire keeps growing

Dowland Contracting's financial woes have spread much farther than the Yukon Hospital Corporation projects. Until it defaulted in February, Dowland had been working as the general contractor building the new hospitals in Watson Lake and Dawson City.

Dowland Contracting’s financial woes have spread much farther than the Yukon Hospital Corporation projects.

Until it defaulted in February, Dowland had been working as the general contractor building the new hospitals in Watson Lake and Dawson City. Last week it defaulted on another hospital job, this time in Iqaluit, Nunavut.

The company walked away from a $36-million renovation of Iqaluit’s Qikiqtani General Hospital with no prior warning to staff or subcontractors at the site. According to a senior member of the project in Iqaluit, the company didn’t tell any of its employees that the project was in jeopardy until a week before it defaulted.

“They just called and said, ‘Everyone’s plane tickets are booked. Get out of Iqaluit now,’” the employee said.

A bonding company has stepped in to ensure that subcontractors at the Iqaluit project will continue working.

Dowland has declined to comment on its financial difficulties in the past. Nobody at the company’s offices in Edmonton, Whitehorse or Kamloops picked up the phone this week.

The Yukon Hospital Corporation has said it didn’t know anything about Dowland’s troubles until February of this year, when news broke that it and Dowland were being sued for unpaid work by subcontractors on the Watson Lake and Dawson City projects.

“Dowland is a very large corporation and, like everyone else, we had no idea until it actually happened in February,” Jason Bilsky, CEO of the Yukon Hospital Corp., told the legislature on Monday.

But that’s contradicted by a letter the hospital corp. received one year ago from a subcontractor owed more than $1 million for its work on the hospital projects. Edmonton-based Nelson Drywall wrote to the hospital corporation’s project manager, Michael Cowper, on May 28, 2012, about its difficulties with Dowland. The NDP Opposition tabled the letter in the legislature on Monday.

Bilsky maintains that all the subcontractors on both projects are being paid again, now that a bonding company and a new general contractor have taken over the projects.

“I think it is very important to state here that all of the subtrades have either been paid or the money that is due them has been put in trust with the bonding company to ensure that they will be paid,” Bilsky said.

Not so, said Nelson’s chief financial officer, Pat McGaffey, in an interview. His company still hasn’t been paid, nor has it heard from the bonding company, he said.

“To date we’ve got no response, not from the hospital corp., from the bonding agency, not from Dowland, nothing,” McGaffey said.

Although he sent a follow-up letter to the hospital corp. via registered mail three weeks ago, he still hasn’t received a reply, and repeated attempts to contact Dowland and the bonding company have all been unsuccessful, said McGaffey.

According to Les Nelson, the president of Nelson Drywall, Dowland CEO Patrick McGuinness agreed to meet in March to resolve the outstanding invoices, but never showed up to the meeting and stopped returning calls.

Essentially, Dowland just stopped paying the contractors and went to ground, letting the projects default under a pile of liens and lawsuits, McGaffey said.

In addition to Nelson Drywall, B.C.-based contractors Dennis Smith Construction and RL-7 Mechanical are also suing Dowland and the Yukon Hospital Corp. over unpaid work at the Watson Lake and Dawson City hospital construction projects.

Dowland is also in trouble in Terrace, B.C., where it is facing 15 lawsuits for unpaid work at the Dasque-Middle hydroelectric project.

In a memo sent to its B.C. subcontractors, Dowland said it is owed millions by the project owner, Veresen Inc., and has taken that company to court for outstanding payments.

According to the March 6 memo, “Dowland has performed a significant amount of work for which we are owed payment by Veresen and, due to the owner’s unwillingness to compensate Dowland as per agreements, we have submitted several claims.”

Dowland’s Iqaluit default comes on the heels of other problems for the construction company. Emails obtained by the News from Gary Fielding, the vice president of operations for Dowland’s industrial branch, say that in April Dowland withdrew money from its employees’ bank accounts after a round of payroll deposits failed to clear the bank.

Fielding’s email blames the bank for the payment reversal, and says it means the company is no longer in control of its finances.

Several other Dowland employees have also confirmed the bank withdrawals, and say even though that round of payroll was eventually put back, they are still owed back-pay by Dowland, in some cases up to three months’ worth.

According to Dowland employees, the Edmonton, Whitehorse and Kamloops offices have been emptied.

Contact Jesse Winter at

jessew@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Zhùr, the ancient wolf pup found mummified in permafrost at Last Chance Creek mine in July 2016. (Government of Yukon/Submitted)
‘Mummy’ wolf pup unearthed in permafrost paints a picture of ice age ancestors

Zhùr is the best preserved and most complete mummy of an ancient wolf found to date.

Former premier Tony Penikett begins a presentation at the Whitehorse Public Library about his book, Hunting the Northern Character, on Dec. 11, 2018. (Crystal Schick/Yukon News file)
Former premier named to Order of Canada

Tony Penikett reflects on career

Ed Hopkins starts the 36-mile race at the Carbon Hill Race Day on Jan. 10. (John Hopkins-Hill/Yukon News)
Dogs take over Mount Lorne for Carbon Hill Race Day

The Dog Powered Sports Association of the Yukon (DPSAY) hosted its annual… Continue reading

As it gets set to turn over ownership of its supportive housing building downtown to Yukon Housing, Options For Independence will not be required to pay back more than $65,000 in City of Whitehorse grants it was provided towards property taxes, decided city councillors on Jan. 11. (John Hopkins-HIll/Yukon News file)
Exemption granted for building transfer

Options For Independence won’t be required to pay back city grants

Mayor Dan Curtis speaks during a city council meeting in Whitehorse on March 9, 2020. Whitehorse property owners can expect their 2021 property tax bills to rise by less than a per cent if the operating budget for the year is adopted as proposed. “A minimal tax increase allows the city to maintain its many existing services and programs, while also supporting important initiatives such as climate change mitigation and enhanced bylaw enforcement,” Curtis said. (Crystal Schick/Yukon News file)
Minimal increase proposed for Whitehorse property taxes

Budget would see 0.34 per cent tax increase

The grace period for the new Yukon lobbyist registry has come to an end and those who seek to influence politicians will now need to report their efforts to a public database. (Mike Thomas/Yukon News file)
Grace period for new lobbyist registry ends

So far nine lobbyists have registered their activities with politicians in the territory

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21, 2020. Some Yukon tourism and culture non-profit organizations may be eligible to receive up to $20,000 to help recover from losses due to the COVID-19 pandemic. (Crystal Schick/Yukon News file)
Details released on relief funding for tourism and culture non-profits

Some Yukon tourism and culture non-profit organizations may be eligible to receive… Continue reading

Mayo-Tatchun MLA Don Hutton won’t be runing for re-election. (Joel Krahn/Yukon News file)
Mayo-Tatchun MLA won’t run for re-election

Liberal MLA Don Hutton won’t be running for re-election. A former wildland… Continue reading

Large quantities of a substance believed to be cocaine, a large amount of cash, several cells phones and a vehicle were all seized after RCMP searched a Whistle Bend home on Jan. 6. (Photo courtesy RCMP)
Seven arrested after drug trafficking search

RCMP seized drugs, money from Whistle Bend residence on Jan. 6

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Whitehorse RCMP are seeing a growing trend of vehicle break-and-enters in the Kopper King area. (Black Press file)
Series of break-and-enters in Kopper King area

Series of break-and-enters in Kopper King area Whitehorse RCMP are seeing a… Continue reading

Signage near the newly opened Dawson City ice bridge. (Sandy Silver/Facebook)
Dawson City ice bridge opens

The Dawson ice bridge has opened. In a Jan. 6 social media… Continue reading

Whitehorse RCMP are requesting assistance identifying three suspects who stole tens of thousands of dollars of property from Cobalt Construction on the evenings of Dec. 28, 29, and 30. They were operating a stolen Toyota Camry, which was beige in colour with the license plate HML66. (Photo courtesy RCMP)
RCMP seeking three suspects after burglary

Whitehorse RCMP are requesting assistance identifying three suspects who stole tens of… Continue reading

Most Read