No layoffs or program cuts – yet

David Simailak, the finance minister, isn’t saying yes or no to the idea of future program cuts or layoffs to help the Government of Nunavut balance its budget.

Keith Peterson, the MLA for Cambridge Bay, pointed out in a question that Ottawa’s transfers to Nunavut are increasing at a rate of 3.5 per cent a year, while Nunavut’s spending is growing at a rate of about 7 per cent a year.

That imbalance, combined with higher fuel costs, is already helping to give the Nunavut government a projected deficit of $8.7 million for the 2005-06 fiscal year.

Simailak responded by saying that Nunavut officials are working within a special task force on territorial formula financing and equalization to find a federal funding formula that better meets Nunavut’s needs.

But Peterson said he’s worried about what will happen if that process fails to secure a better deal for Nunavut.

“Whether the people in Ottawa are listening, it is hard to tell. We could be in serious financial shape if they aren’t listening in Ottawa and the minister’s meetings are unsuccessful,” Peterson said.

Simailak responded by saying that cuts aren’t on the government’s agenda yet, but he didn’t rule them out either.

“The question he is posing I haven’t really thought about, but looking at the funding that we have, we are doing what we can to make sure that we have enough money. At this time I cannot say what it will be,” Simailak said.