Yukon companies owed $3.3M from hospital construction mess

Yukon businesses are owed $3.3 million in unsecured debt in the wake of the Watson Lake and Dawson City hospital construction controversies.

Yukon businesses are owed $3.3 million in unsecured debt in the wake of the Watson Lake and Dawson City hospital construction controversies.

Much of that debt is owed to hotels and other local businesses that provided services to the projects’ general contractor, Dowland Contracting. One of the biggest debts is to Arcrite Northern Ltd., which is owed nearly $2.2 million, according to documents filed in Dowland’s receivership.

Companies like Arcrite likely assumed that on two major government projects, the North’s largest construction company was good for the cash. But it wasn’t.

Just as the hospitals were nearing construction, Dowland collapsed into receivership under a mess of liens and lawsuits over unpaid work at the two sites, and the Yukon Hospital Corporation was dragged into the legal mess.

When it found out about the unpaid work, the hospital corporation declared Dowland in default of its contract and the company’s bonding company, Intact, was brought in to cover the risk.

Now Liberal Klondike MLA Sandy Silver says some of those subcontractors still aren’t getting paid, and he wants the Yukon government to do something about it.

“It has come to my attention that some companies that did work for Dowland have not in fact been paid out. Some have even been told that they are not covered by the bonding process and will not be receiving any money at all,” Silver said in the legislature on Wednesday.

“How does the government plan to honour the commitment made by the chair of the hospital board that everyone who is owed money will in fact actually get paid?” he asked.

Yukon Health Minister Doug Graham said he wasn’t worried about the subcontractors, because the hospital corporation would dip into its funds to pay out any legitimate claims that the bonding company refuses.

“The chair of the hospital corporation obviously made that comment with some assurance that he would be able to fall back on the hospital corporation’s resources in the event that a legitimate claim for payment came forward that was not to be paid by the insurance company,” Graham said.

“These companies – these alleged companies – that the member opposite is talking about that have not received payment, or have been informed (they) will not be paid, should be contacting the hospital corporation. That’s who the bond is with; it’s not with the government,” the minister said.

Except that they shouldn’t, because the hospital corporation isn’t involved in the payouts to subcontractors.

“The bonding company is responsible for evaluating the claims, not the hospital corp.,” said CEO Jason Bilsky.

“It’s appropriate for the minister to look at the hospital corp. as the party that is involved. Having said that, we are not involved in the contractual relationship between the contractor and the subcontractors,” he said.

It would actually be a breach of the hospital corporation’s original contract with Dowland if it got involved, Bilsky said.

Bilsky explained that there is a labour and materials bond in place, which covers most of the construction work, but peripheral costs like travel, hotel bills, or airline tickets will have to be evaluated by Intact.

Because Dowland is in receivership, companies with claims can also use the courts to fight for what they are owed, Bilsky said.

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

U Kon Echelon hosts Tour de Haines Junction

U Kon Echelon continued its busy schedule with the Tour de Haines… Continue reading

Melted beeswax, community pottery take centre stage at Arts Underground’s August shows

Two new, and very different, shows will be opening at Whitehorse’s Arts… Continue reading

Northern First Nations call for a major overhaul of mining legislation

The Na-Cho Nyäk Dun, Tr’ondëk Hwëch’in and Vuntut Gwitchin Governments say change is long overdue

Yukon Salmon Sub-Committee recommends First Nations take ‘additional measures’ to conserve Chinook

Recommendation comes as Chinook run on the Yukon River appears unlikely to meet spawning goals

Students prepare for online learning as Yukon University announces fall semester

The school plans to support students who may struggle with remote learning

Changes to federal infrastructure funds allow for COVID-19 flexibility

Announcement allows for rapid COVID-19 projects and expands energy programs to Whitehorse

City hall, briefly

A look at decisions made by Whitehorse city council this week

C/TFN announces Montana Mountain reopening plan

Carcross/Tagish First Nation and the Carcross/Tagish Management Corporation announced the partial reopening… Continue reading

Roberta Joseph reelected as Tr’ondëk Hwëch’in chief

Unofficial results show Joseph with more than double the votes of runner-up

Development incentives considered for three projects

Projects will add 24 rental units to the market

Delegate calls for crosswalk changes to show support for people of colour

Mayor states support for idea, but cautions it could take some time

Whitehorse advises of water system maintenance

Residents on the city’s water system are being advised they may notice… Continue reading

Walkway, signs planned for West Dawson paddlewheel graveyard

Unofficial attraction may get 135-m walkway and interpretive signs, if YESAB application approved

Most Read