Question re: Dawson City sewage treatment - April 27, 2016

Mr. Silver:   Mr. Speaker, earlier this year one of the worst kept secrets in Yukon was finally brought out in the open — the WTF in Dawson would not be handed over to the city as promised. The reason — also not a secret — has been obvious for years: the waste-water facility doesn’t operate properly and the O&M is beyond the capacity of the city to manage. The Yukon Party and Yukon taxpayers have been left holding the proverbial bag. The City of Dawson has rightfully refused to take on this white elephant. In 2014 the government told Yukoners that this plant would cost $340,000 per year to operate.

Can the minister please confirm for the record that the cost to operate the facility is now over $2.4 million per year?

Hon. Mr. Dixon: Yes, indeed, the Yukon government has agreed to assume responsibility for the operation and maintenance of the waste-water treatment plant in Dawson City, including the facility’s water licence. We are currently working on a service agreement with the City of Dawson regarding the long-term operation and maintenance of the plant.

We have retained Corix, a company that specializes in this, to do that work throughout the remainder of the warranty period as they were the company that originally constructed the project. Community Services continues to address deficiencies, warranty issues and training needs and we are working with a contractor and consultants to develop a plan to improve treatment performance for this coming summer.

We acknowledge that the price to operate the plant is unacceptably high right now and we’re working with our partners to bring that cost down. I believe the number referenced by the member opposite is close to correct. I don’t know the exact amount off the top of my head but it is in that neighbourhood which, as I’ve noted, is unacceptably high, but we are doing our best to try to bring that cost down.

Mr. Silver: I appreciate the answer. After seven years of refusing to take “no” from the city, the Yukon Party was forced to agree to keep the keys to this project. Dawson is refusing to accept the WTF because it doesn’t work and it costs millions of dollars to operate — millions more than advertised, Mr. Speaker.

The responsibility for this poor management and overbudget project will stay where it belongs with this government, which has been responsible for the oversight from the get-go. This government likes to talk about good fiscal management, but projects like this demonstrate that the facts don’t match up with the talk. After spending $25 million on a project that doesn’t work and costs way more to operate than advertised, Yukoners have a very clear picture of this government’s inability to manage these larger capital projects.

Is the government now prepared to admit what a disaster this project has been, virtually since day one?

Hon. Mr. Dixon: I think what we have done is stepped up to the plate and offered assistance where it’s needed. We had a unique situation in Dawson that has a very long story. I know the member knows it. Obviously there was originally a proposal for a sewage lagoon — that was voted down in a referendum. There have been court cases and there have been pleadings over the last decade or so that have played into the story but, ultimately, where we are today is we have a large and complex piece of infrastructure that is complex in nature and difficult to run. We’re trying our best to get the costs down. We acknowledge that they are too high right now.

Through discussions with the City of Dawson, we have determined that Yukon government is in a better position to manage those complexities than the City of Dawson would be, so they have been very appreciative that we’ve been willing to step up and help them out with this and work with them collaboratively on it.

Ultimately, Mr. Speaker, I certainly acknowledge that the cost of the plant is excessively high to run and we are doing our best to bring that cost down. I’m told by the engineers in my department that it is possible to get those costs down. I don’t know enough about it from a technical perspective to explain what those actions might be, but my understanding is that there is the possibility to bring the cost of operating the plant down and we’re hopeful we can get those costs down.

If we’re not able to, Mr. Speaker, we’ll have to work with the contractor through our dispute resolution mechanisms to look at other options.

Mr. Silver: It’s unfortunate that the minister refers to the referendum. He’s taking a page from the previous minister’s ability to blame Dawson City residents, instead of taking responsibility for this project.

It’s time for the government to level with the public and admit what a disaster this project is. The O&M is seven times what was promised on a $25-million project that doesn’t work — that actually won’t work as designed. It is too bad that the government can’t get the City of Dawson to take over the responsibility for this project. But it doesn’t end there, Mr. Speaker. Last fall, the minister received a report that recommended two different expensive options to fix the WTF. The cost is another $5 million to $10 million, depending upon which option is used.

Is the company on the hook for these modifications or is the taxpayer expected to pay, once again?

Hon. Mr. Dixon: When I was commenting about the City of Dawson and their role over the years, I wasn’t casting aspersions. I was simply quoting the former mayor. That’s what the former mayor has said to both me and publicly about the role the Yukon government has taken and the leadership we’ve taken in taking on this project.

With regard to the specifics, my intention has been to direct officials in the government to find a way to get the costs down to operate this plant. If it’s determined that the plant, as the member says, simply doesn’t work and we simply have a lemon, then we will have to look at other options. Those include holding the company that constructed the plant to account. There is a range of opportunities for that, including the dispute resolution mechanisms we have in place in the contract. Obviously, no one wants to go down that road, Mr. Speaker, but if we have to, in the interest of taxpayers, we will. That is one option that, of course, remains on the table.

For now, we’ll continue to work with the City of Dawson. We’ll continue to work with the Water Board to try to take on the water licence and find a service agreement with the City of Dawson and ultimately hope to bring the costs of operating the plant down to a more sustainable level. If that’s not possible, we’ll have to look at other options.