This province cleared an encampment in its largest city. Auditor general says there were significant issues in how it went.

A report from Newfoundland’s auditor general states a $24 million project to turn an airport hotel into a shelter was plagued with 'significant issues.'

ST. JOHN’S – Newfoundland and Labrador’s urgent fix to a homeless encampment in downtown St. John’s saw significant issues through its planning and eventual operation — inflating costs and making it hard to measure outcomes, according to the province’s auditor general.

Denise Hanrahan said Tuesday that the then-Liberal government didn’t follow proper procedures when it leased the entirety of a former airport hotel in St. John’s in 2024 and transformed it into comprehensive shelter service.

Those issues included not following normal tendering practices to select the site, artificially capping the number of rooms to be offered to clients, and planning with the eventual shelter operators — the non-profit End Homelessness St. John’s — before they were formally selected for the project

Some of those contracts were justified using urgent exemptions, but others weren’t.

“It wasn’t consistent throughout,” Hanrahan told reporters Tuesday. “If you had seen consistency throughout then you would say maybe there’s something here you have to appreciate.”

A tent encampment — the first of its kind in St. John’s — grew throughout the fall of 2023 and into the following winter.

It was eventually taken down by police and other government workers in May 2024, after a fire destroyed part of tent at the site near the city’s downtown park.

Volunteers who aided some men and women living in those tents said the encampment was partially a demonstration, urging the provincial government to take action on issues of housing and homelessness in the city.

The lease of the former airport hotel was part of the then-Liberal government’s response to the protest, and concerns about safety were aired by other downtown residents.

“The accelerated approach resulted in incomplete planning, limited documentation and key decisions being made before needs, risks and service requirements were fully understood,” Hanrahan wrote in her audit.

Overall, the shelter program cost more than $24 million for 23 months of operations, the audit found, more than what had previously been disclosed by the provincial government.

“What makes this so disappointing for me, is that homelessness is not a new topic,” Hanrahan said. “The need for attachment to permanent housing for people who may have complex needs is not necessarily a new file.”

Unhoused people ‘now have a better life’

Liberal MHA Fred Hutton, who was Newfoundland and Labrador’s housing minister when some — but not all — of the shelter contracts were signed, said Tuesday the audit didn’t fully reflect how urgently shelter space was needed in the winter of 2024.

He said prior to the COVID-19 pandemic, 75 people required shelter spaces across Newfoundland and Labrador each night, and by April 2024, the number had ballooned to 425.

“Poking somebody in a house or a hotel room without any help is not going to solve your problem long term,” he said, pointing to the affiliated health and social services that are being offered at the airport-area shelter.

Hutton and Doug Pawson, head of End Homelessness St. John’s which still operates the shelter site, both took issue with a calculation by the auditor general, which put the cost per client graduating out of the supported living facility as more than $700,000.

“When you think about 40 people who had been chronically homeless, now have a better life … it’s not an accounting issue,” Hutton said. “You can’t put a price on a person’s life and their future.”

About 70 people remain in the shelter, and they still matter, Hutton said.

Pawson told CTV News Wednesday the auditor general does not seem to have consulted experts on housing or homelessness in her research.

“It’s a very simplistic and rudimentary way of looking at it,” he said. “It doesn’t factor in … what was the alternative if nothing happened?”

He explained an organization in his position could have created better-looking metrics by selecting clients who had fewer needs — but that still wouldn’t have made the value any better.

“Our stated goal was to support folks who have the longest histories of chronic homelessness in our community,” he added. “It’s not just cost per transition, it’s the alternative options and the cost that would be attached to health, justice, other emergency systems that were avoided.”