GN estimates $50 million deficit for 2011-12
Rainy-day contingency fund of $89 million creates deficit on paper
Nunavut finance minister pauses before his 2011 budget address to show off his shoes to media. Traditionally, finance ministers wear new shoes on budget day, but since the Nunavut government is posting a $50-million deficit this year, Peterson said he opted to wear the same shoes as last year. (PHOTO BY CHRIS WINDEYER)
(Updated March 1, 3:30 p.m.)
The Nunavut government will post a $50-million deficit this year, finance minister Keith Peterson announced Mar. 1.
The GN will take in revenues of $1.35 billion this fiscal year, and spend $1.32 billion. But a contingency fund of $89 million puts the GN into deficit.
“We could cut program spending across the board by three per cent — or even more,” Peterson said in his budget address.
“But that would be a very difficult choice. Many Nunavummiut depend on the government to help them through their daily lives.”
Despite the shortfall, Peterson said the budget contains new program spending, including:
• $32 million for Health and Social Services, mostly for out-of-territory medical costs, medical travel and doctors;
• $18 million for the education department, $13 million of which will go to hire between 50 and 60 new teachers;
• $6.6 million more for municipalities;
• $3 million to increase income support payments to Nunavut’s poorest residents.
“We are spending more, Mr. Speaker, but we must ensure we’re spending smarter,” Peterson said.
Health and Social Services will cost the Government of Nunavut at least $297 million in operations costs this coming year, one-quarter of all government spending on operations.
Of the department’s $32 million increase, more than $10 million goes to cover out-of-territory hospital costs. Nearly $7 million goes to new spending on residential and mental health care. A total of $5.4 million will pay for doctor services, including doctors from outside Nunavut who provide services here.
“We are making an investment in the health of our people that is entirely necessary,” Peterson said. “But at the same time I am concerned about the rate at which [health care] spending is growing.” He said that means Ottawa must provide more money when it renews the Canada Health Transfer agreement.
The government will also hire 50 to 60 new teachers over the next two years-at a cost of $13 million-in an effort to reduce Nunavut’s student-teacher ratio.
Murray Horn, the education department’s director of corporate services, said the move should reduce the ratio of students to teachers from 15-1 now to 14-1 in elementary schools and 13-1 in high schools.
“It’s a significant step forward,” Horn said.
He added that the department will try to hire as many graduates of the Nunavut Teacher Education program as it can, but will also need to boost hiring from outside the territory.
The new education spending also includes an increase of $2.5 million for the Financial Assistance for Nunavut Students, or FANS program.
As part of its anti-poverty efforts, the GN will pump $3 million more into income support, which pays for food and clothing allowances to low-income residents. Those rates will go up April 1 for the first time six years, Peterson said.
Meanwhile, the Department of Economic Development and Transportation will spend $1.1 million to cover upgrades, repairs and replacements for community freezers.
The $6.6 million in new operational funding for municipalities includes $650,000 to fix water and sewage services, which are barely functioning in some Nunavut hamlets.
And the Nunavut Housing Corporation will receive $11 million in new funds this year, mostly to fund utilities costs for public housing units.
Peterson said the government will try to make up the shortfall by cutting government waste, eliminating obsolete programs, and deferring some captital projects.
The finance minister called on all government workers, department managers and MLAs to help government cut costs.
“When finances are as tight as ours, we cannot afford any waste, anywhere,” Peterson said in his budget address. He told reporters beforehand he took a pass on the traditional new pair of shoes for his budget speech, opting for the same pair as last year.
Finance officials said the increase in program spending in the budget is an effort to eliminate the need for MLAs to vote on millions of dollars in supplementary appropriations at the end of the fiscal year.
Deputy finance minister Peter Ma also told reporters the GN already has the cash on hand to cover the shortfall, because of deferred capital spending from last year.
(More to follow)
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