Peterson predicts “belt-tightening” Nunavut budget

Nunavut’s finance minister Keith Peterson prepares to deliver a bare-bones budget to the territorial legislature on March 1. (PHOTO BY JANE GEORGE)

CAMBRIDGE BAY — Nunavut’s finance minister, Keith Peterson, will deliver his budget speech to the territorial legislature March 1.

And the gist of this speech is likely to be “here’s what we have, this is what we can do with it,” Peterson said in a Feb. 16 interview in his home community of Cambridge Bay.

The budget will require belt-tightening from the Government of Nunavut and from every resident in the territory, he said, because “challenging” and “tough” times lie ahead.

“I wouldn’t rule out a deficit,” Peterson said about the budget, which he’s still fine-tuning.

A large contributor to Nunavut’s money woes: the $100-million-plus overruns caused by the Nunavut housing corporation.

“It’s put some pressure on us. It’s forced us to rejig our budget. But we still have to build houses. It’s important,” Peterson said.

As more houses are built, overcrowding will lessen, population health will improve and kids will be more likely to study in school, Peterson said, noting “15 people in a house is unacceptable. We have to build houses.”

But to reduce the size of the potential deficit, GN departments, which have already been asked to trim their departmental budgets by three per cent, will be asked to look for more savings.

“We’ll be signalling that tough times are ahead,” Peterson said.

And vacant positions — about 900 in the GN — could stay that way. A hiring freeze is “possible,” Peterson said, and there may be fewer consultants and casual workers hired by the GN.

As well, the GN’s limited financial resources may be directed to departments that provide essential services and show results.

Positions and programs that don’t give a big “bang for their buck” could be cut in favour of those which offer more benefits, Peterson said.

But, because people in the communities rely heavily on the GN to supply services, Peterson promised that the government plans to be “careful” with any cuts.

Education and health will be spared the pain that other departments may suffer.

“Education is a priority,” Peterson said.

As for the proposed power rate increase of 19 per cent, “it’s going to have an impact on us,” he admitted.

While Peterson said he couldn’t “predict the future,” Peterson said the financial hard times aren’t likely to end soon.

The GN’s federal transfer — which provides 85 per cent of the territory’s revenues — isn’t up for renewal until 2014.

In the meantime, the best option is working with the other provinces and territories to increase funding nationally for areas like health care, which is being squeezed across Canada, Peterson said.

“We’re going to work together on these things. I’d like to get us to the point where out spending matches our revenues,” Peterson said.

And he wants the GN to become less vulnerable to the impact of financial problems like the recent cost overruns in the housing corporation or rising health costs.

“The needs and demands are so great that we wish we had extra,” Peterson said.

But the federal government has its own deficit to tackle, Peterson cautioned. “They’re doing the same exercise,” he said.

On the territorial level, co-operation among elected leaders will be key to make Nunavut work, he said.

And the input of the private sector and the development of mining and the business sector will also be important because “the government can’t be everything to everyone,” and create all the jobs Nunavut will need.

Peterson, who attended this past week’s Kitikmeot Trade Show in Cambridge Bay, said he was impressed by what he heard from businesses and mining companies present, because “they didn’t talk to me about problems, they actually proposed some solutions.”

“That’s where we can all work together,” he said.

With eight major mining developments ready to take off in the Kitikmeot, Peterson sees Nunavut posed to become a powerhouse within five years.

But Nunavummiut will also have to do their part.

“People who are able to work, I encourage them to go to school, and seek out employment opportunities,“ Peterson said.