Nunavut infrastructure deficit “remains staggering,” minister says

MLAs start work on 2018-19 capital budget; operating budget won't be ready until late May


Lorne Kusugak, the minister of Community Government and Services, in the legislative assembly March 6 at the opening of the current sitting. Kusugak said Nunavut’s infrastructure deficit “remains staggering.” MLAs are now looking at Bill 1, which would give effect to the largest part of the GN’s 2018-19 capital budget. They’ll also look at Bill 2, which will give the GN nearly $491.8 million in interim money to pay for their operations between April 1, 2018 and June 30, 2018. That’s because the main operating budget won’t be ready until the spring session, set to run from May 24 to June 14. (PHOTO BY STEVE DUCHARME)

As Nunavut MLAs started their line-by-line perusal of the Government of Nunavut’s 2018-19 capital budget this week, Nunavut’s minister of Community and Government Services, Lorne Kusugak, warned that the territory still suffers from huge unmet infrastructure needs.

“We are making progress, but the infrastructure deficit remains staggering,” Kusugak said in committee of the whole March 7.

“As you know, we simply do not have the funding to cover all of the needed projects across Nunavut. Each dollar must be maximized so we can work together on addressing the territory’s total infrastructure needs,” Kusugak said.

This version of the Government of Nunavut’s capital budget is contained in Bill 1, which received automatic first and second reading March 6, allowing it to move into committee.

In it, the GN proposes spending $221.5 million on a variety of building and infrastructure projects, as well as new vehicles and equipment for municipalities.

It’s actually the second part of the capital budget that will kick in this April 1, the date that marks the start of the next fiscal year.

MLAs in the previous assembly had approved the first part of the 2018-19 capital budget in June 2017, but for only $35.5 million, spread among five projects that required early approval.

The biggest of those early capital expenditures were $15 million for that year’s portion of the cost of a new health centre in Sanikiluaq, $10 million towards the new small-craft harbour in Pond Inlet, $5 million for the marine project in Iqaluit and $5.4 million for the new Qikiqtani healing centre in Iqaluit.

But the bulk of the upcoming fiscal year’s capital spending—$221 million—is contained in part two of the 2018-19 capital estimates, which MLAs started looking at on March 7, when CGS department officials, led by Kusugak, appeared in committee of the whole to answer questions about their proposed capital spending plans.

In all, CGS proposes spending another $50.5 million on 24 projects.

Of those, 20 are multi-year projects on which the GN is spending $35.6 million, and 13 of those are cost-shared with the federal government through the federal government’s Communities and Waste Water Infrastructure Fund.

Kusugak said that includes $11.3 million towards a new arena in Rankin Inlet, $2.5 million towards a municipal garage in Cape Dorset, and $2 million towards a garage in Clyde River.

The other four are projects the GN is paying for on its own, which include $3.25 million for tank farm upgrades, $2 million to upgrade the GN’s computer network, $1 million for new fire trucks in Arviat and Pangnirtung, and $1.8 million for pre-planning studies.

The CGS department also proposes an increase in the City of Iqaluit’s contribution agreement from $3.4 million to $4 million, and $3.1 million each for new fire halls in Arctic Bay and Kugaaruk.

Kusugak cautioned, however, that all that does not reflect “the complete picture.”

That’s because some projects, funded by the gas tax fund and the now defunct Building Canada Fund, are still continuing.

And in the near future, Nunavut can look forward to signing a new agreement with Ottawa that will provide Nunavut with another $566 million in infrastructure money over 12 years.

The Liberal government’s infrastructure czar, Amarjeet Sohi, signed a similar agreement with the Government of the Northwest Territories on March 7, giving the N.W.T. more than $570 million over 12 years.

Nunavut’s version of that deal has not yet been signed.

But Kusugak said that to qualify for the $566 million coming its way, the GN must contribute a minimum of $188.7 million of its own money.

“This represents a significant draw on the GN’s capital resources,” Kusugak said.

That’s because the terms of the funding plan stipulate that while Ottawa will contribute 75 per cent of the cost of projects, the participating territory or province must put up the other 25 per cent.

In all, the Investing in Canada scheme, which the federal government announced in its first two budgets, promises to spend $180 billion on infrastructure across Canada over 12 years.

Sohi told the Globe and Mail this week that the federal government hopes to roll out the second phase of that money this month, so Nunavut’s agreement will likely come soon.

In addition to the $50.5 million that the CGS department proposes to spend through the 2018-19 capital estimates, the Department of Education proposes spending $40.5 million.

Among other departments, the Nunavut Housing Corp. will spend $40.3 million, Nunavut Arctic College will spend $8.9 million, the Department of Health will spend $6.5 million, and the ED&T department will spend $6.7 million.

Also during this session, the GN will ask MLAs to approve nearly half a billion dollars in operating funds for the period between April 1, 2018, and June 30, 2018.

That’s because the GN’s main operations and maintenance budget for 2018-19 won’t be ready for MLAs to look at until their spring sitting, which doesn’t start until May 24 and runs until June 14.

So the GN is asking for an interim appropriation of $491.8 million, by way of Bill 2, to keep them going until the main budget is approved later this year.

They’re also asking for a supplementary appropriation of $56.6 million dated to the last fiscal year, 2017-18, in Bill 3, and in Bill 4, an extra $96,000 in capital money, also for 2017-18.

As of this March 8, MLAs were still scrutinizing Bill 1, and had not yet moved on to the other three financial bills.

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