GN budget nears $1 billion mark

The Nunavut government will continue to shovel out money as fast as Ottawa can shovel it back in over the next fiscal year, as its annual spending nears the $1 billion mark.

The GN’s 2005-06 budget, tabled in the legislative assembly Feb. 25 by Leona Aglukkaq, the finance minister, estimates about $968.8 million in spending and about $972.4 million in revenues, for a predicted surplus of $3.6 million.

That’s up dramatically from Nunavut’s first budget, in 1999-2000, when the GN projected only $620 million in incoming revenue, with $557 million of it coming from the federal government.

In contrast, Ottawa will give the GN a whopping $890.9 million this coming fiscal year, most of it through a revamped formula financing agreement. At the same time, Nunavut will raise only $89.5 million on its own.

Aglukkaq told MLAs that the GN will stave off an expected deficit only because of the new formula financing agreement reached last fall between Prime Minister Paul Martin and the three territorial premiers.

Those deals, which kicked in during the outgoing fiscal year, 2004-05, give the GN an extra $45.4 million for that year, and wipe out much of the looming deficit that Aglukkaq predicted last fall.

So even though the GN spent $40.9 million more than was budgeted for last year, it’s showing only an $8.4 million deficit for 2004-05.

And for this coming year, Aglukkaq said the GN expects to take in an extra $27.3 million through the formula financing deal, and another $15.5 million through a revamped health funding agreement.

But in the long run, Aglukkaq said Nunavut needs a resource-revenue sharing — or “devolution” — agreement with the federal government, a deal that would give the GN a share of the mining royalties that are now scooped up solely by Ottawa, with a tiny portion going to NTI under the land claims agreement.

“We can only benefit from our natural resources if we have province-like powers. In order to get these powers, we need a devolution agreement with the federal government,” Aglukkaq told MLAs.

Aglukkaq also said she’s pleased that her budget contains more money for the “private sector.”

The Department of Economic Development’s operating budget will rise by about $6 million next year. Most of that is accounted for by a new, $4 million fund marked as “economic development initiatives.”

The GN’s business plan says this money will be used to put up matching funds needed to get federal money for building projects, or to attract “other parties,” which likely means the private sector.

The big, fast-growing people-oriented departments still account for the biggest leaps in GN spending.

The Department of Health and Social Services will see its operating budget rise by 18.1 per cent over last year, while the Department of Education will see its budget rise by 10.5 per cent.

The budget provides $15 million to help the GN pay extra costs created by power rate increases. That includes increases in the GN’s own power bills, plus expected increases to consumer subsidy programs.

The budget also sets aside $60 million for unexpected contingencies.

Johnny Ningeongan, president of the Nunavut Association of Municipalities, said in a press release that the GN’s 2005-06 budget is “mostly a good news story” for Nunavut municipalities.

That’s because the budget provides a $4 million increase to a fund that provides operating money to municipalities, a $500,000 increase to a water and sewage subsidy program, an extra $1 million for NAM’s insurance scheme, and an extra $1.2 million for fire training.

Some budget highlights:

* Total spending (including contingency money): $968.8 million
* Total revenues: $972.4 million
* Predicted surplus: $3.6 million
* Total revenues from Ottawa: $890.9 million
* Total own-source revenues (taxes and licence fees): $81.5 million
* Total projected spending, Health and Social Services: $240.6 million
* Total projected spending, Department of Education: $193.3 million