Arctic Anglican diocese faces crisis over St. Jude’s construction bill
Dowland receiver demands diocese pay $3 million immediately
(Updated Oct. 7, 3:20 p.m.)
The financial collapse of Dowland Contracting Ltd. this past May has claimed another victim: the Anglican Diocese of the Arctic.
The diocese still owes Dowland about $3 million for construction of the new St. Jude’s Cathedral in Iqaluit, a debt they had been paying gradually from the proceeds of their fundraising efforts.
But after Dowland went under, the receiver in charge of the insolvent company’s assets, a firm called Alvarez and Marsal Canada Inc., now demands immediate repayment of the $3 million, with interest of $30,000 a month.
“These new demands now threaten our very existence,” David Parsons, the Anglican Bishop of the Arctic, told reporters Oct. 7.
Parsons said this puts the church’s extensive social ministry at risk.
In Iqaluit, this includes a thrift shop, the building that houses the local food bank, used by about 100 people a week, and the local soup kitchen, which feeds about 65 people per day.
The social ministry of the Arctic diocese, which serves 51 communities from Nunavik to the Northwest Territories, also includes outreach services to homeless people and transients, a prison ministry, and support for people in hospital.
“It threatens our social ministry for all those who suffer,” Parsons said.
Parsons and Rev. Jonas Allooloo, the Dean of St. Jude’s, have issued an Arctic-wide appeal to anyone who is able to offer help, asking all of them to “do what they can to help the church get through this crisis and save the Arctic’s cathedral.”
Parsons said that between 2005 and 2012, fundraising efforts generated $7.6 million to pay for the construction of St. Jude’s after the original building was destroyed by an arsonist in 2005.
In 2009, Dowland agreed to finish building the cathedral and to receive the balance of payments owed to it later, on a step-by-step basis, as the diocese continued to raise funds.
But all that changed after Dowland went under last May, leaving a long list of creditors stretching across northern Canada.
Now, the receiver in charge of handling Dowland’s assets and raising money to pay those creditors demands immediate payment of the $3 million bill, which the diocese cannot afford.
“The receiver’s request is unrealistic. If we had it, we would pay,” Parsons said.
At the time of the cathedral’s construction, Dowland was involved in a joint-venture with the NCC Investment Group in an entity called NCC-Dowland Construction Ltd.
Under that agreement, Dowland Contracting Ltd. owned 49,000 common shares of NCC-Dowland and NCC Investment owned 51,000 shares, a court document filed with the receiver reveals.
Under their agreement, the two companies made decisions together on what construction contracts in Nunavut NCC-Dowland should bid on.
When the new cathedral was consecrated on June 3, 2012, an NCC-Dowland sign greeted visitors and members of the congregation who came to celebrate the rebirth of the Arctic cathedral.
But it was Dowland Contracting alone that was obliged to finish any construction contracts entered into by the joint venture.
And all moneys paid to NCC-Dowland were to be passed on to Dowland Contracting Ltd., minus “participation fees” that NCC-Dowland held onto, the document said.
This means that when Dowland Contracting went into receivership this past May, Dowland alone remained responsible for collecting unpaid receivables or completing contracts entered into in the name of NCC-Dowland.
The Anglican diocese said that at the time of Dowland Contracting’s collapse, the diocese still owed them $2,652,518, plus interest.
The church said it intends to honour “its intention to repay” but if that’s done under the terms demanded by the receiver, the church’s social ministry would be put in jeopardy.
The collapse of Dowland also rocked the Government of Nunavut, after the company walked away from a major renovation contract for the building that used to house the Baffin Regional Hospital in Iqaluit, a contract entered into under the NCC-Dowland joint-venture.
Dowland was also constructing a new office building for the Kitikmeot Inuit Association in Cambridge Bay.
Following Dowland’s collapse, the receiver and the various companies involved in the project reached a settlement agreement this past August.
Under it, an entity called Kitikmeot Region Properties Inc. will finish the job.