NTI can’t afford cash payouts for beneficiaries

It doesn’t make financial sense for Nunavut Tunngavik Inc. to pay direct cash benefits to beneficiaries, the organization’s director of finance told its board of directors during a meeting in Cape Dorset last week.

This past November, the board of directors passed a resolution during NTI’s annual general meeting in Gjoa Haven that directed the finance department to look into the matter.

But finance director Peter Rose told the board last week that NTI investigated the issue in June 1999 and again in September 2000 — and nothing has changed since then.

In 1999, NTI sought a legal opinion from the law firm Nelligan Power. The firm said direct cash payments would endanger NTI’s status as a non-profit organization. Such organizations don’t have to pay income tax.

In 2000, the firm said that Nunavut Trust’s deed would have to be amended if NTI were to provide beneficiaries with yearly cheques.

In addition, each person who received the money — in theory, all Inuit beneficiaries over the age of 16 — would have to pay income tax on it, thereby reducing its value.

Rose calculated that if NTI were to pay each beneficiary $500, it would cost Nunavut Trust more than $7.5 million a year.

“So the question is: Does the small benefit this would bring to individuals justify this very large cost it would represent to the trust?” Rose asked the board.

He pointed out that NTI provides several indirect alternatives to direct cash payments, such as its bereavement travel program and accidental death and dismemberment insurance program.

However, some board members said those measures are not enough.

“I feel there should be more in here,” said Cathy Towtongie, president of NTI. “We know we get royalties from mining worth $7 million today. We could use Attuqtuarvik.”

Malachi Arreak, an NTI board member from Pond Inlet, suggested the regional development corporations provide the funds for direct cash payments.

“The birthright corporations would pay direct cash. This was the projection — what we did when we were negotiating. It would be a benefit, but it would grow and grow,” he said.

But it’s unlikely that Attuqtuarvik and the regional development corporations would provide the payouts — they are supposed to operate as businesses.

And royalties from mining wouldn’t provide the amount of money needed for such a program, Rose said.

They have provided only about $1 million a year at the most for the past couple of years, and less now that two mines in Nunavut have closed.

However, Towtongie was unfazed. “Where are the royalties going to?” she asked.