Nunavut MLAs to pore over GN’s 2017-18 capital budget next week

Nunavut Finance Minister Keith Peterson at the Kitikmeot Inuit Association’s AGM in Cambridge Bay last week. With seven and a half years of service as finance minister, Peterson is now the longest serving territorial or provincial finance minister in Canada. (PHOTO BY JANE GEORGE)

CAMBRIDGE BAY—When Nunavut MLAs return to Iqaluit Oct. 18 for the fall sitting of the Nunavut legislature, one thing they’ll talk about is money and what kind of infrastructure the Government of Nunavut should acquire with its limited pot of cash.

On the MLAs’ agenda: the GN’s capital budget for its 2017-18 fiscal year, which starts next April 1.

The capital budget, which MLAs will scrutinize line-by-line in committee of the whole, covers building projects, infrastructure and equipment.

In Nunavut, MLAs pass the capital budget in the fall to allow enough time for tendering and contract awards ahead of next year’s sealift season.

And this year, they will have some costly projects to consider.

That’s because the focus of the capital budget is on big infrastructure projects, Nunavut Finance Minister Keith Peterson said in a recent interview in his Cambridge Bay office.

“We have a fairly large capital plan, as large as ever,” Peterson said—so roughly $200 million, as was the case for the 2016-17 capital budget, along with contingency fund of $30 million.

The 2017-18 capital plan’s multi-year projects include the construction of what Peterson called the “Qikiqtani Correctional Healing Centre.”

That’s a replacement for the aging, cramped and unsafe Baffin Correctional Centre.

The GN’s capital plan from one year ago said the GN anticipated spending $2.75 million on a renovation project at BCC in 2016-17 and $15.9 million between 2018 and 2021.

That $15.6 million roughly represents the 25 per cent of the total cost of the project which Nunavut has to cover under the federal government’s Building Canada Fund.

Peterson told Nunatsiaq News the project, if approved, would cost about $76 million and create approximately 120 beds, with a request for proposal for design going out in 2018 and construction likely finishing in 2020.

The project will see a maximum security addition built onto the existing BCC. When it’s finished, prisoners will be moved in to that addition while the BCC is renovated.

Among the other large capital projects: a new $40-million school for Cape Dorset which was burned down by young vandals last September and will take three years to replace.

After the MLAs approve the capital budget, “we can get into more intense planning,” Peterson said of the capital planning process, which aims to fine-tune cost estimates for major projects.

On the GN’s long-term borrowing obligations, Peterson said that debt is still below Nunavut’s federally-imposed $650 million debt cap.

But there’s never enough money.

“We’re always worried about unforeseen circumstances, like the school that burned down in Cape Dorset,” he said. “That put tremendous pressure on our capital plan because we have to finance 100 per cent of that.”

While Ottawa will announce a new Building Canada Fund next year, Nunavut still has to find its 25 per cent of project costs as the territory’s contribution, Peterson said.

“And, if a project isn’t on time and on schedule, we pay anything over that,” he said, adding that “it’s all about planning.”

The fall sitting of the Nunavut legislature takes place just before the December meeting of federal and provincial finance ministers when Peterson will present business cases for the GN’s infrastructure needs ahead of next spring’s federal budget.

With seven and a half years of service, Peterson is now the longest serving current finance minister in any territory or province.

He plans to lobby support from his territorial-provincial counterparts for more federal money to pay for social housing and energy-related items in Nunavut.

Nunavut wanted a contribution from Ottawa in the last federal budget that would have given the territory $520 million over five years for social housing—although that ended up at $77 million over two years.

“We have to go back and ask them again [for more],” Peterson said.

The distribution of how and where that social housing money will be spent will be decided during the upcoming sitting.

Peterson said he’s also going to seek more money to replace Nunavut’s aging power plants, found unsustainable by a recent Senate report, like the one in Cambridge Bay which dates back to 1967.

Fixing those plants will be an expensive project, with a price tag of $250 million over five years, Peterson said.

Nunavut has no choice but to bring its diesel-run plants up to standard.

“We have to become more efficient,” he said.

Bill Morneau, the federal finance minister, has already started to do pre-budget consultations—and Peterson hopes Morneau makes a stop in Iqaluit to hear more about the GN’s needs.

Total spending by the GN—including capital projects, operations and maintenance, and contingencies—will likely reach the highest levels yet since 1999, edging to $1.8 billion in the 2017-18 fiscal year, Peterson said.

MLAs will consider the operations budget for 2017-18, called “main estimates,” next February or March.

This month’s fall sitting of the Nunavut Legislative Assembly was originally scheduled to start Oct. 19, but Speaker George Qulaut moved the start date back to Oct. 18 to accommodate the Monday-Wednesday-Friday trans-territorial flight schedules that northern airlines now use.