Fires pose threat to Nunavut self-insurance plan

CHARLOTTE PETRIE

Iqaluit is planning to establish a local fire training centre for volunteer firefighters around Nunavut.

Ian Fremantle, the city’s chief administrative officer, said it’s a necessary move if the territory intends to reduce fires. He also expects it will cost the territory less money to run a local training centre than sending volunteers to the South.

Nunavut mayors also discussed the idea during the Nunavut Association of Municipalities’ annual general meeting held in Cambridge Bay in April.

A closer look at the territory’s proposed self-insurance program worried many members, who realized an unusually high number of fires could deplete the fund overnight.

Two recent fires in Nunavut, and the current state of the global insurance industry, is making it hard for municipalities to get affordable insurance policies.

Iqaluit and all 24 hamlets eventually signed up for a self-insurance program called Namix. Fremantle says the city was forced to sign up, or would have been left with no insurance policy. Their current policy had expired March 31.

“We signed up under duress and have plans to discuss our concerns with the Namix board of directors in the very near future,” Fremantle assured.

One of his main concerns is the city’s role in the program, and the share of premiums that the city pays.

“As the only property-tax base community in Nunavut, we bear the brunt of the insurance premiums. The 24 hamlets are not property-tax based, and so the premiums paid to the plan will be from the City of Iqaluit and Government of Nunavut, which presumably will pay for the hamlets through subsidized funding,” he explained.

In the first year, municipalities will contribute $1.9 million in premiums, and the GN $2 million. A single municipal unit is estimated to cost as much as $16 million, so it’s possible that the fund could be entirely depleted within the first year, Fremantle says.

“If the number of claims were higher than the expected $600,000 for the first year, where would money come from for future claims? There is no written guarantee from government to support funding of claims in excess of projections.”

If the GN is no longer a contributor to the fund after the end of the first year, it would make Iqaluit the largest shareholder in the program.

Fremantle says he worries that Iqaluit could end up providing the largest share of money even though most incidents occur in the hamlets.

Furthermore, with a territorial election next year, there is no guarantee that future governments will make good on the current funding commitment of the GN.

As it stands, the GN has committed to contributing $5 million over five years, with the hamlets and Iqaluit paying $1.9 million per year in the first five years.