A Halifax housing co-op is backing-out of a deal which would have paid a fraction of a multi-million-dollar debt to local contractors.

Unpaid contractors are accusing the province of pushing the North End United Housing Co-operative into receivership instead of honouring a deal which would have seen contractors paid 50-cents on the dollar for their work.

“If receivership is granted both the Nova Scotia Housing Development Corporation and the monitor gain,” Joe MacLeod, of Reliable Rooter Ltd., stated in a letter on behalf of the contractors, Aug. 24.

“Grant Thronton gains because they become the receiver and continue to get paid by NSHDC, and will then get back control of their properties and the people of the co-op. The contractors lose.”

The Department of Community Services brought in 17 contractors to redo kitchens, windows, doors, roofs and other work on 30 north end Halifax housing in 2010.

It was budgeted for $3.1 million and funded through federal government and the provincial Social Housing Assistance Repair Program (SHARP).

The province spent $30,000 on a report to find out why the project went $2 million over budget and why contractors were not paid. The Grant Thornton report found 17 contractors are still owed a collective $1.2 million.

Tim Ambrose said he was hired to do demolition and mold remediation work at the co-op. He launched a lawsuit against the co-op and the province for the $100,000 he’s still owed.

“We’re going through the process as we speak. A lien was placed on it, maybe six months ago, and the legal process is underway now,” Ambrose told Maritime Morning, Tuesday, Oct. 18, 2011.

“At this point it seems like spending bad money after bad money,” Ambrose told the talk show. “We’re disappointed for sure. Provincially-funded contract, contractors acted in good faith under the direction of project management that’s hired. Then all of a sudden you don’t get paid toward the end of the project.”