Nunavut school fires create insurance “crisis point:” minister
“I can foresee the Government of Nunavut becoming uninsurable”
Because of recent fires that devastated schools in Cape Dorset and Kugaaruk, Government of Nunavut officials are finding it’s getting harder to buy fire insurance and if the trend continues, the GN could one day become uninsurable, Finance Minister Keith Peterson warned Sept. 14 at a committee of the whole discussion in the legislature.
“In my mind we have reached a crisis point when it comes to insurance and replacing schools,” Peterson said.
Peterson made those remarks at a committee of the whole discussion on a supplementary appropriation bill.
Supplementary appropriations are requests for extra money to cover things not included in the GN’s regular budgets.
This one, Bill 53, requested $11.35 million for capital spending in 2017-18, included two items related to the burned out school in Kugaaruk:
• $5.7 million to be advanced to the Department of Education to start work on building a replacement school in Kugaaruk; and,
• $1.287 million to modify and upgrade the old hamlet office in Kugaaruk for use as classroom space.
Those spending requests prompted Iqaluit-Sinaa MLA Paul Okalik to ask Peterson about security measures at Nunavut schools, especially fencing.
“Has the department considered protecting these valuable assets? They’re not just schools in our communities. We use them for community gatherings, and we use them for very valuable other events that are very important to the community. When they burn down, we lose that asset,” Okalik said.
Peterson replied by saying that he’s not sure if putting fences around schools will necessarily keep people out, but that the GN is looking at available options for security.
And he also said that because of the frequency of school fires in Nunavut, and the risk this creates, the insurance industry is making it more difficult for the GN to get fire insurance.
After a fire destroyed Killinik school in Cambridge Bay in 1997 and a school in Pangnirtung in 1998, plus another fire in 2003 that destroyed the first Joamie School building in Iqaluit, Nunavut’s deductible for insurance claims rose to $10 million.
But now, following the September 2015 fire at Peter Pitseolak School in Cape Dorset and the March 2017 fire that destroyed Kugaardjuq School in Kugaaruk, Nunavut’s deductible has been raised to $20 million.
That means that if a $40 million building burns down, Nunavut’s insurance policy requires that the GN pay the first $20 million with its own money.
And the timing of the Kugaaruk fire was bad for Nunavut—because the GN’s insurance policy was coming up for renewal.
That made it extremely difficult for GN officials to get a new insurance policy.
“It was becoming very difficult to obtain insurance at the time and we had to concede on a couple of issues. Our premiums increased of course. We lost the 15 percent margin they allow for extras, and the deductible increased,” Peterson said.
“It is becoming quite a serious problem. At a certain point if this continues, I can foresee the Government of Nunavut becoming uninsurable. In other words, every school that burned down, we had to pay the entire amount,” he said.
He also pointed out that schools seem to be big targets for arsonists and vandals.
“I don’t know what it is about schools, but schools are the main targets of people in the communities when they decide to burn a building down, unfortunately…,” Peterson said.
Education Minister Paul Quassa also fielded Okalik’s question, saying the Department of Education is starting to look at new security measures for Nunavut schools, such as security guards, which the health department uses in some places.
“All the schools need to have security. As the Department of Health is doing, we are starting to do the same thing, but we are still on the initial stages. Maybe that’s why the member hasn’t seen it. We have already utilized it in some of the schools, hiring security guards,” Quassa said.