Paul Martin gives Nunavut the brush-off — for now

IQALUIT — It was the most charming brush-off that a federal politician will ever likely inflict upon Nunavut.

But a brush-off it was.

Federal Finance Minister Paul Martin and his Nunavut counterpart, Kelvin Ng, signed an extension to the Canada-Nunavut formula financing agreement March 8 that provides for no increases in the growth-rate of Nunavut’s annual grant from Ottawa over the next three years.

The “extension” is for the last three years of Nunavut’s first financing agreement with Ottawa.

That deal, which Martin signed in October of 1998 with Jack Anawak, who was then the interim commissioner, contained provisions allowing the five-year deal to be re-opened after two years.

But it appears as if Nunavut finance officials have failed to convince their Ottawa counterparts that Nunavut needs a more generous deal right now.

On Feb. 27, Ng said in his budget speech that Nunavummiut now stand at “an important turning point in Nunavut’s history,” where the Nunavut government is now exceeding its financial limits.

“Given the serious and growing social and economic challenges that we face, it is critical that we maximize our benefits from and seek more favourable treatment through the formula financing agreement,” Ng told MLAs just before tabling his government’s 2001-2002 budget.

Catching flies with honey

Martin spent most of his two-day visit to Iqaluit last week attending various schmooze-ups with members of the Nunatsiaq Liberal Association and the Iqaluit Chamber of Commerce.

But at the end of his stay here he found time to nip into the Nunavut legislature for a brief signing ceremony before heading back to Ottawa.

In his remarks to MLAs, Martin coated his bitter message in dripping layers of golden honey, dodging questions about Nunavut’s financial viability while heaping praise upon all things Nunavut.

Leaving no cliché unspoken, he lauded Nunavut as a “new government pledged to doing things differently.”

“I wish that every Canadian could be here to see this,” Martin gushed.

He heaped praised upon Ng, declaring that Nunavut’s finance minister is “doing a tremendous job.”

He also heaped praise upon his fellow Liberal, Nunavut MP Nancy Karetak-Lindell, saying no one fights harder for Nunavut in Ottawa.

Martin unleashed a thinly-veiled response to news stories and editorials published in right-wing papers such as the Ottawa Citizen and the National Post, which reported that Nunavut’s finances are in a mess.

“When I see the financial management of Nunavut, it gives me great confidence in what they are doing,” Martin said.

At one point, Martin actually seemed to mean what he was saying. Pointing to a class of middle-school children who had sung an Inuktitut-style a-ja-ja version of “O Canada,” he said his memory of their performance “is something that will stay with me for the rest of my life.”

The annual payment from the formula financing agreement is the Nunavut government’s greatest single source of revenue, contributing to a whopping 83 per cent of the money that the government will use to provide services to Nunavummiut over the next fiscal year.

That adds up to $563 million of the $679.5 million that the territorial government is planning to spend this year.

The latest budget projects a $12 million accumulated operating deficit by the end of the 2001-2002 fiscal year. But that’s only in the unlikely event that the territorial public service is fully staffed after April 1, which would require the government to pay out all the wage and benefit money they have budgeted to spend.

Surpluses produced by unspent wages and benefits have, until now, helped cover the Nunavut government’s annual operating deficits.

But Nunavut’s spending on basic needs is growing so quickly, those windfall surpluses won’t be enough to balance the budget in the future.

Other sources?

Ng, however, is cautiously optimistic that there may be other ways of prying more money out of Ottawa.

On March 9, responding to a question from Baker Lake MLA Glenn Mclean, Ng said he believes Martin is sympathetic to Nunavut’s situation.

“He understands some of the specific needs and he will endeavour, if there’s justification, to assist us in that regard,” Ng said.

Ng said officials make annual adjustments to the formula financing agreement, and that this could provide opportunities for Nunavut.

“[T]he media portrayal is that once we have signed the formula financing agreement, there are no open doors, it’s closed for the next three years and that is not the case.”

Ng and Martin have also said Nunavut may get more money from Ottawa through programs that lie outside of the formula financing agreement.

Finance officials from Ottawa and Nunavut have already begun work on a review of Nunavut’s financial situation, another process that might prove fruitful for Nunavut in the future.

Iqaluit Centre MLA Hunter Tootoo, however, says Ottawa’s cold response to Nunavut’s entreaties does not augur well for the future.

“I think if this does not change, all of Nunavut will be affected… people who need housing, people who need better health care and education,” Tootoo said.

Tootoo noted that Martin did not utter the word “housing” at any time.