New funding deals a welcome boon for GN
$200 to $300 million in new money
Premier Paul Okalik and his officials believe Nunavut will emerge as a major financial winner after last week’s marathon bargaining session in Ottawa among the country’s first ministers.
That’s because of two big intergovernmental agreements that will direct new federal money to Nunavut. The first, on health care funding, was signed last week; the second, on territorial formula financing and provincial equalization, is likely to be worked out at a first ministers conference on Oct. 26.
Taken together, those two deals could give the Nunavut government new revenues of between $200 million and $300 million, spread out over the next five to six years.
For the GN, it’s a clear sign that the Paul Martin government is more attuned to northern issues than the Jean Chrétien regime ever was, and that years of persistent lobbying by the Nunavut government and Inuit organizations is starting to pay off.
Okalik said he believes the tough stand he took in February of 2003 made a big difference. That was when he and the other two territorial premiers stood shoulder to shoulder in refusing to sign a health care funding agreement that Chrétien had just worked out with the provinces.
“I think it’s obvious that what we did a couple of years ago has really had an impact this time around. I think the prime minister was trying to avoid a situation like that. So he was very active himself on this issue, to make sure that our needs were addressed,” Okalik said.
The two recent agreements are complex, and officials are still figuring out how they would work and how much money they would deliver to Nunavut.
But they’ve been able to produce some tentative estimates.
The first one – last week’s health care renewal deal – will deliver at least $89 million in new money to Nunavut in at least two streams spread out over the next five to six years:
o Nunavut’s share of the increased amounts of cash that will flow from the Canada Health Transfer, the federal program that directs health care money to provinces and territories. For Nunavut that’s worth close to $3 million a year – for a total of about $18 million over six years.
o Nunavut’s estimated share of the new Territorial Health Access Fund, worth at least $71.1 million over five years.
The purpose of the health access fund is to make it easier for northern patients to see doctors and other health care providers. It’s divided into two components:
o a federal commitment to pay 50 per cent of Nunavut’s medical travel costs, worth at least $10 million a year, for a total over five years of $50 million;
o a health reform fund worth $4.3 million, or $21.7 million over five years.
The promise to pay half of the Nunavut government’s medical travel expenses, which have been escalating rapidly in recent years, represents a sweet victory for Okalik and his government.
That’s because, through the terms of the agreement, Nunavut will effectively receive at least 70 per cent of the total amount of extra medical travel money that Paul Martin is promising to give the three territories.
“We are the biggest beneficiaries of the agreement in the North, because we bear the biggest chunk of money for medical travel,” Okalik said.
The territorial health access fund will supply Nunavut with more money to pay for another way of creating access to health care: expansion of the telehealth system, which uses videoconferencing and networked computers to bring patients and doctors together.
Officials caution that their preliminary figures are just early estimates, and that the actual amounts in future years depend on unpredictable factors, such as changing costs for medical travel.
By itself the estimated $89 million in extra health money is a financial boon for the Nunavut government, because it means the territorial government may be less likely in the future to claw money out of other departments to fund the Department of Health and Social Services.
But Nunavut officials are looking forward to another impending agreement that could deliver even more money: a reformed formula financing deal.
The formula financing agreement is the deal that provides the GN with more than 80 per cent of the money it uses to pay its bills.
It’s part of a new arrangement that Paul Martin wants to work out that would deliver more money to the three territories and to smaller provinces that depend on equalization payments.
Martin laid out the federal government’s initial offer in a letter delivered to territorial and provincial premiers on Sept. 13.
Based on what the federal government says in that letter, Nunavut officials believe a revamped formula financing deal could give Nunavut an extra $188 million – as a minimum – over the next six years.
“That would help us in reducing some of the health numbers – for example we could build more housing to offset some of health issues that Nunavummiut face,” Okalik said.
That deal will finalized after a first ministers’ conference to be held Oct. 26.