Nunavut’s Inuit org improves financial position

(updated 1:50 p.m.)

Nunavut Tunngavik Inc.’s financial statements show the Nunavut Inuit birthright organization is on a stable footing, with a cash balance of $6.1 million as of March 31, 2012.

NTI was also able reduce the size of NTI’s capital loan from Nunavut Trust during the past fiscal year from $76.7 million to $53.5 million, a decrease of $23.2 million.

“The old debts are smaller now,” said NTI president Cathy Towntongie. “Because of the 21-year-old rule, the debt has gone down.”

To deal with the 21-year-rule, NTI and the Nunavut Trust used a complex accounting manoeuvre whose end result was a reduction in the amount of principal that NTI must repay to the Trust.

That rule says trusts may dispose of “certain properties at fair market value” 21 years after the date the trust was created and every 21 years after that.

Under the Nunavut land claims agreement, the Nunavut Trust received $1.17 billion in compensation money that the federal government promised to pay the Inuit of Nunavut in annual installments.

The bulk of NTI’s annual budget comes from earnings on Nunavut Trust investments. NTI keeps some for itself, and distributes some to the regional Inuit associations.

In the early years, Nunavut Trust investments did not earn enough to cover NTI’s costs, forcing the organization to borrow from the compensation fund’s principal.

So NTI borrowed from the Nunavut Trust’s “capital.”

In 1995, the Nunavut Trust and NTI appeared to agree that NTI must pay all operating loans by 2007.

But those loans were never repaid, and NTI continued to increase its spending, borrowing from Nunavut Trust principal to pay its bills.

Through cash flow management, NTI also reduced $7.1 million on its capital debt.

Overall, NTI’s audited financial statements show NTI’s expenses were $19.9 million, down from $22.6 million in 2011.

The organization spends $9.3 million on salaries and benefits and $1.7 million on consultants.

That’s down from 2011 when NTI spent $10.3 million on salaries and $2.2 million on consultants.

NTI’s president, chief executive officer and chief operating officer received salaries in the range of $161,849 to $180,890.