At $2.5 billion a year, Nunavut’s a bargain

In financial management, the territorial government’s doing just fine

On Tuesday, the Government of Nunavut unveiled a budget in the territory’s legislative assembly, shown here in an undated file photo, that forecasts $2.5 billion in spending for the 2021-22 fiscal year that begins April 1. (File photo)

By Jim Bell

There’s a certain body of opinion in this country — much of which lurks within the darker corners of social media — that claims the Nunavut territory and its public government represent a colossal waste of public money.

You’ve likely seen the comments. “Nunavut’s run by incompetents who can’t count. Freeloading Nunavut takes from Canada and gives nothing back. The whole territory’s just a big drain on something called ‘the taxpayer.’”

By the way, given that just about everyone who spends or receives money in this country is a “taxpayer,” most invocations of the term are meaningless. Taxpayers don’t constitute a separate class of people that stands apart from and above the rest of us — we’re all taxpayers.

At any rate, the Government of Nunavut’s 2021-22 operating budget, unveiled Feb. 23, shows that when it comes to financial management, Nunavut’s doing just fine.

The estimates Finance Minister George Hickes tabled in the legislative assembly that day show that for the fiscal year ending March 31, the territorial government will produce a deficit of only $21.4 million.

Set against an annual budget worth about $2.5 billion, that’s pocket change. It amounts, essentially, to a balanced budget.

For the next fiscal year, the government is projecting an even smaller deficit of about $14.3 million. And the territory’s long-term debt stands at only $446.6 million, all of it borrowed to build infrastructure, such as power stations, housing, and the Iqaluit airport.

Compare that to Newfoundland and Labrador, which is teetering on the brink of insolvency with a projected deficit of about $1.8 billion and a total long-term debt exceeding $23 billion.

Or Ontario. The government that runs Canada’s largest, richest province is staring at annual deficits of around $38.5 billion this year and next. Its total long-term debt as of March 31 last year stood at a whopping $362.8 billion.

Such comparisons between provinces and territories can be tricky, however, mostly because of differences between how they’re financed.

But a more reliable judgment is the kind offered by an independent credit rating agency.

Last fall, DBRS Morningstar took a look at Nunavut’s finances and gave the territory a double “A” credit rating — the same rating it gave Saskatchewan. It gave Nunavut a better score than it gave Nova Scotia, Manitoba, Prince Edward Island and long-suffering Newfoundland and Labrador.

Consider also that the much-maligned Nunavut government is expected to deliver modern government services to a tiny population scattered among 25 small communities located across an expanse of land the size of Western Europe.

It does this, of course, while struggling with one of the harshest environments on the face of the Earth, hampered by transportation and telecommunication services that are laughably inadequate.

And it’s worth remembering also that when this government was born, on April 1, 1999, it had been incapacitated by the stingy financial policies imposed on Canada by Jean Chrétien’s austerity-driven Liberal government.

That meant Nunavut began life with a badly underfunded public government and a crippling infrastructure deficit.

Yes, there’s much that needs to be fixed in Nunavut: education, housing, health care, you name it.

But when you take a close look at what Nunavut’s public administrators have to struggle with every day and how far they’ve come since 1999, you have to conclude that at $2.5 billion a year, Nunavut’s a bargain.

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(21) Comments:

  1. Posted by clap clap clap on

    Sure, on one level it’s great that the territorial government has a balanced budget. It’s also great that the federal government is coming up with the resources required to respond effectively to the COVID pandemic. But neither level of government has any plan whatsoever to address Nunavut’s profound social housing crisis. There are houses so crowded that it would be impossible for everyone living in them to all clap at the same time to celebrate another balanced budget…

  2. Posted by Ian on

    Nunavuts 199-2000 budget was 550 million, thanks to the liberals,

    • Posted by John on

      Nunavut’s 2021 budget 2.5 BILLION thanks to the liberals

  3. Posted by Uvaali on

    Another way to look at the numbers is that Nunavut should be going into a larger deficit by providing more mental health help and build more houses which would overall help people which would make us more contributing to our communities.

  4. Posted by Think About It on

    Spin…that is what this story is. Communities in these provinces spend Capital dollars. Nunavut allocates some money then does not spend it, water plants, landfills, health care. The author of this story should go through how much money has been earmarks for critical infrastructure over the past 10 years and then see how much projects have been completed.

  5. Posted by Google eyes on

    Serious question. Is this a paid GN advertisement? I’m glad everything is going great in Iqaluit while the rest of us meek out a living.

    Badly managed GN infrastructure, schools that would be condemned in the south where there is testing of mould fuel spills air quality, don’t forget health centres are in no better shape.
    Landfills garbage blowing into the ocean.
    Housing crisis you would find in a third world country. Groceries that cost an arm and a leg. Inuit unemployment highest among any group in Canada.
    Water quality I believed described in the leg last week as “piss” by MLA.
    GN, hamlet, and other orgs that have Northern Living allowance no increase in 10 years.

    Yeah GN you are so much better and we all suffer for it.

  6. Posted by The Bottom Line on

    With such a gret job managing their budget, why is it that the GN can’t find funding to address the housing crisis? Why can’t they provide comprehensive mental health supports and proper addictions treatment? Why aren’t there more resources for children and schools? Why isn’t there an effort to reduce food insecurity? Why do we have to travel South to get medical care?

    With all these savings, why aren’t we making sure we invest in .a better future for our communities? Or was it never about Nunavummiut and just about the bottom line?

  7. Posted by Math on

    The article is focused on bottom line only, which has merit—governments should balance budgets. However, as commenters are pointing out, there is a lot to be done here and unfortunately there is a lack of strategy on behalf of the government and elected officials in accomplishing it. The GN desperately needs more strategists that pull together departments and solve critical problems in house and not with with over use of consulting firms. Let’s talk housing for minute; mold, lack of supply, overcrowding, constructing costing that makes no sense, etc. Solutions: mold remediation? Yes that’s part of it, but we need to address problems at their source, and remediation doesn’t stop the cause; an HRV system that introduces fresh air into homes does, and it also provides other benefits; healthier air for less respiratory issues, dryer air equals lower heating costs (takes less energy to heat dry air), etc. Of course, there’s still overcrowding, so let’s address that… what policies get people (that want to) into their OWN homes, to alleviate Housing’s bloated O&M cost per unit and focus that funding on construction? We don’t do this enough in any government, but Nunavut, being Canada’s youngest, should shift gears. Maybe EIA should form a strategy division with Nunavut’s best problem solvers to lead inter departmental collaboration and develop in house solutions to critical problems.

  8. Posted by Nick Arnalukjuak on

    Why does people like the editor has to handle and hang the territorial budget.. it’s like what do you know? It’s tough enough for Inuit in the north.. maybe you should editorialize your own opinion in which you have dwelled.. and not make nunavut as your ruling world.. try it in your home turf

    • Posted by It Is His Home Turf on

      Your ‘home turf’?? You know little of Jim Bell is seems. Nunavut is very much his ‘home turf’.

      He knows more of Nunavut history, society and language than probably 98.5% of the population.

      • Posted by Correction on

        I would have to disagree with you, he might know some things mainly in Iqaluit but over the years it’s plain to see from his editorials it’s very one sided and lacking the complete story.

  9. Posted by Barret on

    Sounds like Jim Bell has been drinking the happy juice. Austerity is nothing to cheer about

  10. Posted by Pork Pie on

    This might be pure fiction, but I feel like Jim ‘phoned it in’ on this piece. Part of me thinks he was trying to smoke out some of our local trolls. Either way, I appreciate his illuminating points regarding the archetypal ‘taxpayer’ though.

  11. Posted by Some Deal on

    When the territory’s budget is essentially covered by 98% of federal dollars, meaning everyone else in Canada in provinces that actually generate revenue, it is not really a deal. The only reason Nunavut exists is because southern Canada is ignorant how much money is sent here to run what is essentially several communities whose industry consists of government and snowmobiling. Does the cost of this have any point besides some old idea of arctic sovereignty? Many places in southern Canada with comparable populations would thrive with this kind of federal support.

    • Posted by josywales on

      How many 100s of billion dollars goes overseas that Canada will never see again?

      • Posted by eskimo joe on

        Nunavut’s a bargain the title says, it is; so will the services to the territory be. billions to oversea, third world, Canada is funding war lords all over the globe sad to say, how do you think most leaders in Africa and third world got on the millionaires list? once the aids $$$ arrives, most is taken/diverted by top governments officials of the recipient country’s leaders. case in point, Haiti, over ten years of that terrible earthquake, the country is still in ruins.

  12. Posted by Progress on

    It would be interesting to see or compare other northern territories and countries with their budgets and their per capita funding. To see where Nunavut stands in comparison with funding and budgets.

  13. Posted by Westerners on

    2.5 billion dollars for a territory of a little over 30 thousand Inuit.
    You do the math…… small cities in southern Canada have more people in them than the whole territory ! $2.5 Billion dollars
    Yet Inuit are the poorest majority in all the country .

    • Posted by Northerner on

      problem is most of the cities have had their infrastructure for some time and most of that infrastructure was paid by the Federal government a long time ago, this is lacking in the extreme in the north and the budget you see with the GN also goes towards building infrastructure.
      A lot of things you see down south that you take for granted is what is needed here.

      • Posted by Westerner on

        With Gn. We Inuit are the poorest ,We have the newest territory and possibly the richest one in all of Canada to boot, yet our government will never “catch up” to the rest of the country . Our people are the most resilient individuals on earth to take this kind of treatment from the government since day 1. Sad but true

  14. Posted by Steve Hill on

    Progress : The information you are requesting is available on the Government of Canada Website: Department of Finance: Federal Transfers to Provinces and Territories.

    The Transfers reflect an Federal Investment on a per Capita Basis, meaning the most populated Provinces of the Federation received the greatest Federal Funding. With Quebec topping the List at $ 26.3 Billion and Ontario second at $ 22.8 Billion. Unsurprisingly, Yukon ranks last a $ 1.3 Billion

    Nunavut is not going to win the per capita expenditure game. There does not exist the Political or Public support for such a rebalancing act.

    Instead, the Government of Nunavut needs to find a precedence for a Federal Injection of Funding to Provinces in specific need. And it is easy to find one : In 2005 the Federal Government sent additional funds, amounting to $ 2.0 Billion each to Newfoundland, New Brunswick and Nova Scotia , under the guise of : Separate Offshore Arrangements ( loans from the Government leveraged against potential future offshore Oil and Gas development revenues – which did not actually materialize). The stated aim of this Federal Transfer was to ‘ Allow the Provinces to immediately and flexibly address its unique fiscal challenges’.

    The immediate and unprecedented lack of housing and the Health and safety issues inherent in such conditions clearly warrants a Separate Special Arrangement of the same type. Which would allow Nunavut the agility to immediately and flexibly address this unique challenge.

    Another option would be to look under the Federal Government Equalization Program. The purpose of this program was entrenched in the Canadian Constitution in 1982 :

    ‘The Parliament and the Government of Canada are committed to the principal of making equalization payments to ensure that provincial/territorial Governments have sufficient revenues to provide reasonably comparable levels of Public Services at reasonably comparable levels of Taxation ‘
    ( Subsection 36(2) of the Constitution Act, 1982)

    Under the Equalization Act, the question becomes more clear : Do we have people in the Provinces of say Ontario or Quebec – or anywhere else in Canada for that matter, living with the same population density per household as we currently have in Nunavut ? And, are the Health & Safety issues associated with the mold infestation problem being properly addressed?
    The Equalization Act would be the best precedence for moving forward with a Supplementary injection of Federal Funding to address the very pertinent and real challenges facing Canadas newest Territory and its Citizens.

    Another Example of Federals Injections for Separate Arrangements would be the National Ship Building Policy. The Federal Government injected $ 4.3 Billion ( 2018 Estimate ) into the design and construction of 6 -with a potential 2 further units – of Naval Offshore Patrol vessels. This was done to immediately address ( and justifiably so) a well documented lack of Naval Capability in the Canadian Navy. This is the same type of Federal Injection that is needed in Nunavut.

    For $ 4.3 Billion – a one time Supplementary Federal Injection, the Government of Nunavut could :

    1) Build a proper Deepwater Port . Allowing both large Tourist Vessels and Ocean
    sized cargo ships to dock in Iqaluit
    2) Develop Hydro electric underground and Dam Based Turbine Generators for
    Hydro Electricity
    3) Construct Public Housing, in a Architectural Style that is in accordance with
    local indigenous traditional architecture ( not some Soviet Area Concrete block
    buildings) that would be handed over to local indigenous peoples at a geared –
    to – income Government backed Mortgage repayment program ,to address the
    shortfall of 3,100 housing units in Iqaluit.

    Looking at an Annual $2.5 Billion Operations Budget, of which 26.56 % of the amount is directly consumed by Housing Subsidies ( so people can actually afford to keep living in their over-crowded homes ) , there is simply no way for a new Territory to be able to activity, constructively move forward with infrastructure developments.

    There will need to be a significant , Separate Arrangement made, and a well defined one time injection of Federal Money to bring the Territory of Nunavut up to a level of living which is more on pare, or : equal too, that of other parts of the Canada.

    That is the premise of the Nation of Canada, as enshrined in our Constitution , in accordance with our Traditions, morals and beliefs and an unassailable right of every Canadian.

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