Report: Clyde River’s very existence is questionable

SEAN McKIBBON

CLYDE RIVER — A draft report on the financial woes of Clyde River questions the hamlet’s future viability and that of other small communities in Nunavut.
“The problem experienced in Clyde River is not unique to that community, and will no doubt be experienced by even more communities in the future,” says a draft debt recovery paper dated Sept. 1999, and prepared by the Avery Cooper consulting firm for the Nunavut government.

The paper says that, inevitably, some communities will not benefit from the current boom in Nunavut while others, either by location or by luck, will benefit.

Clyde River has no industries other than hunting and construction. It has one of the highest unemployment rates in Nunavut and a major housing crisis.

Hamlet officials say that some houses in the community have up to 16 people living in them. They say 146 new social housing units are needed.

For Nunavut’s have-not communities, the paper says their situations may have to be resolved with “customized funding formulae and subsidies.”

Will small communities die?

But other communities may not be so lucky. “In some cases the future viability of the community’s future existence may have to be reviewed,” the paper concludes.

In Clyde River, hamlet officials are wondering which category their community falls into, and what they can do to make themselves viable.

Jonathan Palluq, the hamlet’s SAO, says the report has no new debt recovery plans.

“It doesn’t go far enough,” Palluq said. Nearly everything in the report has either been tried or considered before by himself and Clyde River’s hamlet council, he said.

The biggest problem facing Clyde River’s municipal government is that it doesn’t get enough revenue. Territorial transfers account for only 30 per cent of expenditures, Palluq said.

Other sources of revenue such as lot leases, taxes and heavy equipment rentals don’t make up the difference. The only way to address the lack of revenue is to bring in capital projects or cut back municipal services, Palluq said.

“We need some capital planning to inject some money into the community,” he said.

The hamlet may also have to look at privatizing trucked water services. While territorial legislation doesn’t allow the hamlet to do that, Palluq said that cutting back on municipal services may be the only way for the hamlet to find a way out of its financial mess.

“It might mean fewer jobs at the town, but it would mean more jobs in the private sector,” Palluq said.

The report says, as have other debt recovery plans in the past, Palluq said, that the hamlet’s water and sewage subsidy should be increased to more accurately reflect the community’s needs.

It also says the government should make a one-time $54,000 payment to make up for an incorrect application of the territorial water and sewage subsidy formula. Palluq said hamlet office operations have already been cut back, and that this part of the municipality is now running a surplus.

MLAs need plan

But what really needs to happen is for MLAs to come up with a plan to address the problems in the hamlet, said Palluq. He said everything that can be done at the municipal level has already been done.

The territorial government needs to change its municipal legislation and bring in capital projects such as the wharf being constructed in Clyde River’s bay, or make improvements to the dump, Palluq said.

The Avery Cooper report says the Nunavut government should loan the municipality $400,000. Palluq said the government has given the hamlet $200,000, “just so we can survive the next few months.”

But he said he said a loan would only increase the interest charges the hamlet is already paying. He said the hamlet loses money already to overdraft charges incurred because funding from the territorial government for each fiscal year often comes six months late.

Other suggestions, such as hiring a financial comptroller for the hamlet, cutting back on employee benefits, and increasing revenue from sources other than the government have all been thought of before, Palluq said.

“The guy writing this was getting $200 a day. And he says we should cut back employee benefits. Lots of these people have been working for the municipality for $12 an hour for 15 years on half-days,” Palluq said.

But he said the hamlet may now have no choice but to make the cuts. For instance, the hamlet may no longer be able to compensate retiring employees for unused sick leave.

“It seems like it’s a slope and we’re still sliding down,” said Clyde River’s mayor, James Qillaq.