Minister 'deeply disturbed' by consultant's claim to $1.3M in housing deal with First Nation

Indigenous Services Minister Seamus O'Regan says every penny of the $12.8 million meant to rebuild and renovate dilapidated and mould-infested homes in Cat Lake First Nation will go toward housing in the community, not to a consultant who claims he's owed a 10 per cent fee.

O'Regan said he's "deeply disturbed" by reports that Gerald Paulin is demanding the northern Ontario community pay him $1.2 million for his role in helping to secure emergency housing money from the federal government for the remote community in northwestern Ontario.

"Housing money will go to housing," O'Regan said in question period Friday morning. "It is as simple as that. Housing money goes to housing."

The minister was echoing concerns raised by other First Nations leaders, including Cat Lake Chief Matthew Keewaykapow, who, in an earlier written statement, "adamantly" denied that the band has agreed to the payment.

"The idea that Jerry Paulin or any consultant expects to get a million-dollar windfall out of money that we desperately need for houses for Cat Lake families is atrocious," Keewaykapow said in a statement to CBC News on Thursday.

'His claims for this huge payout are demeaning'

"Jerry Paulin knows the desperate state of our housing situation. His claims for this huge payout are demeaning to all the families who are suffering in Cat Lake."

The housing crisis in the community, located 600 kilometres north of Thunder Bay, Ont., caused it to declare a state of emergency in January. An inspection of all 128 homes a month earlier had found that two-thirds should be replaced, due in part to mould in many of the houses.

After weeks of negotiations, band leaders and O'Regan announced in late February that the community would get $12.8 million from the federal government.

Paulin had signed a contract with Cat Lake in November 2017 for 10 per cent of any new funding the community received. He says that entitles him and his company, Windsun Energy Corp., to $1.2 million as a result of the housing deal.

He told CBC News he had no comment on the chief's statement on Thursday.

"I have to study it and I have to make a decision with my lawyers," he said.

No salary

Paulin says he was not paid a salary during the 18 months he worked with the First Nation.

He says the band did pay for his travel expenses to Cat Lake from both Thunder Bay and his winter home in Florida, and also reimbursed him more than $200,000 for money he spent out of pocket on items for the community ranging from cellphones to equipment parts.

"Put it this way," he said of his role. "If I had not worked for the last year and a half on this emergency housing, they would still have nothing."

Paulin claims he wouldn't be paid from the emergency funding, but from the band's other sources of revenue. 

In his statement, Keewaykapow said the band has not agreed to pay Paulin from the emergency housing funds, but has "proposed options" that are "currently under review." The statement didn't provide any more details.

Keewaykapow also denied that Paulin was responsible for securing the federal money.

"Cat Lake has been working with Canada on our housing-mould issues since 1997, long before this consultant was ever in Cat Lake."

The chief and council say long-term exposure to mould is harming the health of at least 100 residents.

"People in Cat Lake get sick non-stop: coughing, multiple pneumonia incidents, related kidney diseases and increased medical problems," said Deputy Chief Abigail Wesley.

Community leaders blame the crisis on chronic under-funding from Indigenous Services Canada.

The new money includes $5 million to build 15 new homes, $2.1 million to repair and renovate 21 units, and $3.1 million for new prefabricated modular housing units.

'I got it going from Day 1'

Paulin was at the February meeting, but did not attend the closed-door session where final details of the agreement were negotiated.

"I was the lead on the project." he said. "I got it going from Day 1. I worked for 18 months getting that project up and running."

CBC News obtained a copy of Paulin's contract. It was signed by former Cat Lake chief Ernie Wesley. The contract states that Paulin's company, Windsun Energy Corp., "shall receive a consulting fee equal to 10% of all new monies brought into Cat Lake."

In his statement, Keewaykapow said the band ended its relationship with Paulin in February.

According to Paulin, Cat Lake leadership tried to end his contract on Feb. 26, five days after the meeting with O'Regan. He said he received a termination letter dated Feb. 20, the day before the funding agreement was signed. He said Keewaykapow subsequently agreed to pay him $1.2 million over several months.

In question period on Friday, O'Regan said neither Paulin nor Cat Lake signed the agreement with Ottawa in February. Instead, the contract for emergency housing funding was with the Windigo Tribal Council, on behalf of Cat Lake.

The tribal council represents several Indigenous communities in northern Ontario, including Cat Lake.

"It is why we signed an agreement with the community and with Windigo First Nation, and no one else," said O'Regan.

A department official, who spoke to CBC News on background, said Windigo has the technical expertise needed to facilitate the project. The official also said the department had heard concerns from members of the community and "other partners" about the role of consultants in the negotiation.