Nunavut Trust preserves entire land claim compensation fund
Inuit land claim money in good shape
CAMBRIDGE BAY – The $1.1 billion that the Nunavut Trust manages on behalf of Nunavut Inuit has now grown to $1.3 billion.
That's why Nunavut Trust board member Bill Lyall had "nothing but good news" to deliver to the Kitikmeot Inuit Association's annual general meeting last week in Cambridge Bay: the entire compensation fund promised in the Nunavut land claims agreement has now been restored.
The Nunavut Trust's job is to invest the compensation money that Ottawa gave Inuit under the Nunavut land claims agreement.
In 2007, the trust received its last installment, worth $33.9 million, from the federal government, which started making annual payments in 1993.
No more money will arrive after this year, but the future for the Nunavut Trust still looks good. The Trust has preserved all the money paid to it by the federal government and also set aside a $197.8 million dollar reserve to use as a cushion if its investments suffer any losses.
Money earned by its investments is distributed annually to Nunavut Tunngavik Inc. and the three regional Inuit associations to pay for their operations.
In 2007, these groups received a total of $41.2 million. The KIA's portion this year is about $4.2 million.
In 2008, the money that beneficiary organizations get from the Nunavut Trust will come only from investment earnings.
Since 1993, in addition to maintaining its assets, the Nunavut Trust repaid $53 million to the federal government to cover negotiation costs and paid out $580 million to Nunavut Inuit organizations. Of this, $96 million went as loans to beneficiary organizations, which are to be repaid.
In its early years, NTI had to borrow from the Nunavut Trust to pay for start-up costs. Then, in 2002, 2003 and 2004, the Trust's investment earnings fell sharply. Because there were little earnings to distribute, the Trust made loans to NTI instead, depleting its capital.
The Trust also experienced rough years from 1994 to 1997. The Trust has cut the percentage of its total assets that it hands out from a high of 29.6 per cent to four per cent so its capital assets remain intact.
Nunavut Trust said over the long term it should earn enough to fund the beneficiary organizations at a level equal to four per cent of its assets.
This past August, the Trust lost $80 million due to upheavals in the world money markets, but quickly recouped all but $20 million.