Government of Nunavut’s deficit less than predicted thanks to feds, says finance minister

After $200 million of unexpected federal funding, Nunavut’s deficit is 29 per cent less than expected

Finance Minister George Hickes delivered the Government of Nunavut’s budget address to the legislative assembly on Tuesday. (Photo by Dustin Patar)

By Mélanie Ritchot

Thanks to nearly $200 million in unexpected funding from the federal government, the Government of Nunavut’s deficit is almost 29 per cent lower than what was predicted last year.

“Had we not received this federal support, I would be reporting a significantly different fiscal situation today,” Finance Minister George Hickes said in his budget address in the legislature on Tuesday.

In November, Hickes predicted the deficit for the 2020-21 fiscal year would be record-breakingly high.

The GN’s deficit for the current year is estimated to be $21.4 million, which is $8.6 million less than the $30 million deficit predicted in last year’s budget.

The infusion of money from the federal government wasn’t expected in last year’s budget.

It includes $130 million for COVID-19-related aid and $58 million to cover medical travel costs through the Non-Insured Health Benefits program.

An increase in funding for the NIHB means Nunavut will save approximately $20 million on medical travel, since the government of Canada is subsidizing more of the GN’s costs.

This amount is expected to change depending on how many people need to travel south for medical reasons.

Even though these are one-time payments, Hickes said he is looking forward to finalizing a “long-overdue” agreement with the federal government for more permanent NIHB funding.

“We have made enormous progress in our relationship with the federal government over the past year,” said Hickes, adding that there seems to be a new understanding between the federal and territorial governments.

Nunavut’s deficit is predicted to dip to $14.3 million in the upcoming fiscal year, as outlined in the territory’s 2021-22 budget, which Hickes presented Tuesday in the legislature.

This includes a $75-million contingency fund — or cushion — that hasn’t been allocated to anything specific yet. The deficit would be smaller if those funds aren’t used up throughout the year.

Last year’s contingency fund of $50 million was needed, so this year’s budget includes a $25 million increase.

Nunavut is expecting more than $2.5 billion in revenues the fiscal year that ends on March 31. The 2021-22 budget predicts nearly $2.4 billion in revenues.

In his address, Hickes said the Nunavut government has emerged from the first year of the COVID-19 pandemic in good shape, the territory’s credit rating remains strong, and “federal officials at all levels appear more willing than ever to work with us.”

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(11) Comments:

  1. Posted by Northern Inuit on

    glad to hear this, the Feds have been a wonderful help to us throughout this pandemic.

    however, Nunavut is like that that Cousin who always seems to know when you get paid and comes up to you “can I borrow, or I hate to ask, or hey Cuz would you mind” with the same story. I would hope one day we would be self sufficient but like that Cousin again, who knows when that day will ever arrive.

    • Posted by CB on

      Although it’s true that 90% of the GN’s revenue comes from federal transfers, this number isn’t all that different from the NWT – a territory with highway access to the South and a more developed resource sector – which derives 85% of its budget revenue the exact same way.

      The people of Nunavut also pay for a fair share of their own expenses. Pre-pandemic, the GN generated approximately 220-250 million dollars in revenue, including 50 million dollars in income taxes and a whopping 25 million dollars from tobacco sales taxes, all from an adult population of less than 25,000.

      Nunavummiut contribute to their own standard of living. But yes, the Arctic will always be an expensive place to live and needs support. It’s also okay to be grateful, while recognizing the current system isn’t working. People shouldn’t be starving and severely house insecure anywhere in a country as wealthy as ours.

      • Posted by Northern Inuit on

        exactly, the GN does make a healthy amount of taxes, tobacco, cannabis and liquor taxes. It would be nice to see Nunavut connected by a type of road from the South but imagine the cost and maintenance on this throughout the year. but the amount of inclement weather we receive throughout the winter does not make it feasible, let alone safe. how many deaths does NWT see from the stretch of Highway 3 where there is no cell service each year?

        Nunavut will always be an expensive place to live, but we should be thankful in the subsidies that we receive for fuel, on Victoria Island people pay $1.08 for Gasoline and $1.03 for heating fuel in Cambridge Bay but in Ulukhaktok NT they pay $1.78 for Gasoline and $1.69 for heating fuel per litre respectively!

  2. Posted by No Moniker on

    What I find most interesting about the support of the current Federal government, both in terms of the budget and our place in the vaccine cue for that matter, is that it has been granted without any noticeable collaboration, help or even participation in the process from our MP; who has chosen instead to occupy her time with an almost steady stream of partisan criticism. I’m not a ‘Liberal’ partisan, but some credit is due here.

    • Posted by No Moniker II on

      She’s been almost non-existent in all of this, other than a random social media post with misinformation on vaccines that seemed divisive. Thankfully, our Premier and Ministers have been working very hard with the federal government during this time.

  3. Posted by What a joke on

    The Minister acts like the federal government paying a bit more for Inuit Healthcare is a win. It isn’t.
    The Minister committed publically to force the federal government pay one hundred percent for the GN to administer the federal program.
    So what he is saying is that he failed his objective but got a few million more. What about the decades of underfunding Minister? Over years and years the GN has paid hundreds of millions of dollars to run a federal program with partial subsidiziation. Tell me what other province or territorial government pays to run federal programs? We do and have the highest indigenous population in the country.
    This has resulted in hundreds of millions of territorial budgets going to flying Inuit patients south instead of building hospitals and infrastructure. It is a federal obligation but here the GN is paying it. Why?
    You talked tough and didn’t deliver. Stop self congratulating yourself. Your failure costs all Nunvammuit, including Inuit, funding for other services and social programs.

    • Posted by Word Choice Matters on

      The minister “forcing” the gov’t of Canada to do anything is a laughable concept – encourage, cajole, shame, certainly, but Nunavut is not in a position to force anything on that front.

      • Posted by Semantics on

        The last time I was volunteering to do something I could stop doing it at any time. GN can do the same.

  4. Posted by Sabrina on

    George did you set aside any dollars for healing towards trauma we have suffered from the past? We still need to heal and become healthier to become productive again.

    • Posted by Disk almost full on

      What are you looking for the government to do to heal you? Is it you that need this specifically, or a more broadly speaking ‘we’?

  5. Posted by George on

    Thank you to the federal government, the GN would of been in a bigger hole. Credit is due to this Federal government.

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