“We’re keeping folks working”

From Beijing to London to Washington, the global financial crisis still batters the world's governments – but so far, the Government of Nunavut's doing okay.

"We're keeping folks working," Keith Peterson, Nunavut's finance minister, told reporters June 4 just before he stepped into the legislative chamber to deliver his maiden budget speech.

He said that's because the GN will likely spend more than $300 million on a variety of public works projects this year.

That infrastructure includes the following:

• $120.8 million set out in the main estimates document tabled in the legislature last week to pay for new or renovated infrastructure projects and other capital items;
• about $62 million for new social housing – this money will come out of the Nunavut Housing Trust;
• more than $80 million worth of projects carried over from the previous fiscal year;
• $40 million or more of federal stimulus money that the GN expects Ottawa will try to shovel into Nunavut later this year, but which is still subject to negotiation.

Peterson's speech marked the tabling of the GN's long-awaited operations and maintenance budget for the 2009-10 fiscal year, which began this past April 1.

Nunavut MLAs voted to approve about one-third of that budget this past March, in a series of special votes held near the end of that month's sitting.

This means that for the first time in more than a year, the GN's spending plans will be exposed to sustained scrutiny by MLAs meeting in public.

Peterson said last fall's election interrupted the GN's normal cycle for presenting budget information to the assembly.

But he said the government has been keeping MLAs informed.

"We meet regularly with colleagues, so they have an idea of what we're up to," Peterson told reporters.

Overall, the GN expects to receive revenues of about $1.22 billion this fiscal year, up about five per cent from last year.

About $1.1 billion of that comes directly from Ottawa: roughly a billion through the territorial formula financing agreement and $108.5 million through other federal programs.

The GN will likely raise only $87.9 million on its own: $53.9 million through taxes and $34 million through other sources, such as licence fees.

In turn, the GN plans to spend about $1.25 billion.

This produces a small projected deficit of $29.1 million. That's about the same as the $28.4 million deficit the GN now expects to show for the 2008-09 fiscal year.

At the beginning of 2008-09, the GN first expected to produce a small surplus of about $3.5 million that year.

But last summer's high fuel prices hammered the GN. The territorial government's fuel resupply bill burned a $200-million hole in the GN's budget last year, up from only $140 million the previous year.

Energy has been one of the GN's fastest rising costs over the past 10 years. In 1999-2000, the GN spent only $48.7 million on fuel.

Peterson said the GN's small deficit this year is not unmanageable or a cause for worry.

"We hear a lot of news about doom and gloom around the world. But in Nunavut there is no gloom and doom. It's very stable," Peterson said.

But he did say that the Qanukkanniq program review recently ordered by Premier Eva Arreak may help the GN figure out how and where to save money for next year.

"We'll ask the directors to sharpen their pencils. We want to make sure that if we run a deficit next year that it won't be as large," Peterson said.

Economic data attached to Peterson's budget speech shows that for the first three months of 2009, Nunavut was the only jurisdiction in Canada where retail sales increased – by 3.3 per cent.

"Even in the face of the current economic crisis, Nunavummiut have continued to outspend other Canadians on retail merchandise," the document says.

Everywhere else in Canada, recession-spooked consumers cut way back on their shopping trips, especially in Alberta, where retail sales fell by more than 10 per cent.

GN finance officials say this is likely because many Nunavummiut hold stable government jobs – and feel secure enough to keep on spending.

Peterson said that if there's an overarching theme to this year's budget, it's this:

"We're sending the message out that Nunavut is a stable environment to invest in. We're looking forward to the future"

He also pointed out that this year's budget contains no tax hikes.

Other budget highlights include:

• $8.5 million more for health care, include $1.3 million more for battered women's shelters – the rest goes towards out-of-territory medical patients;
• $2 million to train GN employees;
• $8.6 million to start implementing the Education Act, the Official Languages Act and the Inuit Languages Protection Act;
• a tax credit to help businesses recover the cost of training people;
• $2 million on a "Nunavut presence" at the Vancouver Olympics.

As of press-time this week, MLAs were still doing a line-by-line scrutiny of the budget in committee of the whole.