A group of contractors say they're being offered a fraction of what they're owed for a provincially-funded renovation project.

The 17 contractors say the creditor protection offer works out to 17.5 cents for every dollar they're owed by the North End United Housing Co-operative.

The housing co-op only has $200,000 to pay them. The contractors are owed more than $1 million collectively.

The contractors have been waiting nearly two years to get paid, following a renovation project to fix up the co-op that ran millions of dollars over budget.

The co-op's total debt, including secured creditors such as the Halifax Regional Municipality, the Nova Scotia Housing Development Corporation and the CMHC, is more than $10 million.

“They're offering me 17 cents on the dollar, 17.5 which is basically around $40,000,” said Joe MacLeod, president of Reliable Rooter Ltd.

He's owed $290,000 for work he did back in 2010 and said he's been struggling to keep his business afloat without it.

“I just feel shafted by the province that I live in,” MacLeod said.

Drowning in debt

The federal government and Nova Scotia's Department of Community Services, through its Social Housing Assistance Repair Program (SHARP) committed $3.1 million to the project in 2009, but costs spiralled out of control, leaving the co-op severely in debt.

In April 2010 a co-ordinator with the department "expressed concerns and requested financial information relating to SHARP funds that had already been spent," according to a provincial consultant's report.

The department issued a stop work order four months later. The workers say they didn't know about the order.

North End United filed for creditor protection in January and the first details of a proposal were revealed in court Friday.

Wade MacAulay said he’s owed about $90,000, but he'd only get $15,000.

“If I had of realized this was going to happen two years ago, I'd never got involved with North End United Housing Co-op.”

Bobby Gionet is owed about $161,000, but would only stand to get $24,000.

“They knew right form the start that there was no money. They shouldn't have led us on in the first place,” Gionet said.

The proposal would also break up the housing co-op, putting the Ananthoth and Seaview properties in the hands of the Department of Community Services.

"The sense of community that has been created cannot be crushed and will remain; and housing for the residents will remain intact,” said Jonathan Hannam, president of the co-op in a statement.

The judge has scheduled a creditor's meeting to take a vote on the proposal in three weeks. After that, the matter will be back in court at the end of July.