Nunavut a bonanza for southern businesses, report says

DENISE RIDEOUT

OTTAWA — The Nunavut Association of Municipalities is trying hard to challenge the belief among southern Canadians that Nunavut is nothing more than a drain on the federal government’s treasury.

In fact, they say, Nunavut is spurring growth in several industries in the South.

In a presentation to the House of Commons standing committee on finance, the Nunavut Association of Municipalities unveiled new figures that show the territory is contributing significantly to the South’s economy.

NAM’s president, Keith Peterson, presented a newly released report, “The Economic Impacts of Nunavut on the Rest of Canada,” to the finance committee on Parliament Hill on May 2. The finance committee is holding pre-federal budget consultations with organizations across the country.

The report, which NAM commissioned the consulting firm KPMG of Toronto to do, shows what Nunavummiut have long known: they buy many of their goods and services from southern-based businesses.

With few factories or major industries in Nunavut, stores, businesses and residents turn to the South for everything from fresh vegetables to furniture and building supplies.

According to the report, the federal government gave Nunavut $601 million in 1999 under the formula financing agreement. But that money didn’t simply stay in the territory.

Rather, Nunavut turned around and spent $424 million on goods and services in the South. The following year, Nunavut imported $450 million worth of goods and services from southern Canada.

“These numbers show that Nunavut is not a drain on the federal government,” Peterson told the finance committee members.

As well, the goods and services Nunavut residents purchased from southern-based companies in 1999 actually supported between 4,000 and 9,000 person years of employment in the south.

Peterson said there’s a common misunderstanding among southern Canadians and even some federal government officials that Nunavut is drying up federal funds.

When Nunavut complains about its lack of housing, health-care facilities, and key infrastructure such as paved roads and proper water and sewer lines, Peterson said the usual response is that Nunavut already gets more than its fair share of money.

Peterson said not only does Nunavut not get an abundance of federal funding, it’s actually struggling to get by. “Communities need water plants, desalination plants, roads and schools — the basic things the South already has,” he said.

Now, with its new report in hand, NAM has concrete evidence that money is not just flowing one-way into Nunavut. Peterson said the report can go a long way toward persuading the federal government to invest more — not less — money into the territory.