Leaders ponder how to fund Nunavut
The three parties to the Nunavut accord have begun the work of figuring out how to create a formula financing agreement for the Nunavut territory.
Northern political leaders don’t want Ottawa to simply split its current level of funding between the western territory and Nunavut after division.
Nunavut Interim Commissioner Jack Anawak, Nunavut Tunngavik Inc (NTI) and territorial government representatives met Monday and Tuesday to discuss what type of funding they’d like to see in place after the territories separate.
“There is clearly a requirement to identify two formulas, with two new expenditure bases, based upon two models,” GNWT Finance Minister John Todd told members of the legislative assembly before it wrapped up recently.
The federal government hasn’t yet decided what formula will be used to fund northern territories after division.
“Now there are two separate arrangements between the federal government and the Northwest Territories and the federal government and the Yukon,” an official with the finance department said.
“We’re anticiating there will be a third with Nunavut.”
A working committee of northern officials and federal finance representatives met May 30 to discuss northern financing.
Committee members will meet several times during the next year and eventually make recommendations to DIAND minister Jane Stewart about how Ottawa can fund each territory.
A five-year funding agreement between Ottawa and Yellowknife expires in 1999 and paves the way for a new funding agreement.
Currently, Canadian taxpayers provide about 80 per cent of the total GNWT budget, with the territorial government generating about 20 per cent itself.
The ability of Nunavut and the western territory to generate more than one-quarter of their own annual budgets is expected to be equally limited.
As well as offering suggestions on what formula should be used to fund the North, the committee members will loosely recommend budgets for the territories.
“The federal government is certainly aware of the desire of the North to have some idea (of funding) for planning purposes,” the finance official said. “We will do everything we can do to accommodate that.”
The GNWT is in the process of doing a cost analysis for both new territorial governments. For Nunavut, it’s using the Footprints 2 model; for the western territory it’s using the current GNWT system.
Finance Minister John Todd said in the analysis of Footprints 2, his staff identified shortcomings on personnel.
“I believe there were somewhere in the range of about 100 person years that we felt was perhaps missing in the overall framework for the new government,” Todd told legislators.
That amounts to about 100 positions more than the 624 recommended in Footprints 2.
Larry Elkin, liaison researcher with the Nunavut Implementation Commission, designers of Footprints 2, isn’t surprised to hear that the number recommended by NIC has changed.
“We recognize there could be some changes,” he said. “This is constantly evolving and changing.”
For that reason, he added, Footprints 2 includes a variance of 10 per cent to account for unforeseen developments that could affecting staffing within the Nunavut government.
The GNWT is expected to complete its cost analyses by the end of the month.
Ottawa has committed to fund start-up costs for the government of Nunavut to the tune of $150 million. Those costs include training Inuit for headquarters positions within the government, capital costs for construction of residential and office buildings and establishing and operating an interim commissioner’s office.
There are no official figures of what it will cost to operate the Nunavut government after start-up.