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January 1, 1999

One of the last milestones along the road to Nunavut: a team led by NWT Finance Minister John Todd negotiates a formula financing agreement with federal Finance Minister Paul Martin.

Interim Commissioner unveils Nunavut's first budget

DWANE WILKIN
Nunatsiaq News

IQALUIT — A sketch of preliminary budget estimates released by the Office of the Interim Commissioner broadly outlines how Nunavut's first government will spend $620 million in its first year of operations.

In unveiling the fiscal framework, Interim Commissioner Jack Anawak said that it provides for a balanced budget and plenty of flexibility for Nunavut's first batch of MLAs.

"It does not pre-empt major policy decisions that will be taken by the duly elected representatives of the people of Nunavut," Anawak said during a press conference at Office of the Interim Commissioner (OIC) headquarters in Iqaluit.

Under the proposed budget, roughly two-thirds of the $580 million earmarked for programs and services would be allocated to health care, education, transportation, community government and social housing.

Spending on culture and languages will be paltry by comparison — just $6 million is allocated for the Department of Culture, Languages, Elders and Youth. That's far less than the government expects to spend leasing housing and office space for employees.

Although the budget framework envisions no spending increases either for education or health care, the OIC's finance department does allow for the creation of two special-reserve funds.

First, a $30 million policy reserve for "high-priority services, programs and projects" would be placed at the disposal of MLAs, and Anawak suggested that this fund could be tapped to enhance Nunavut's beleagured health care system.

He added that spending more money on nurses' and doctors' salaries will not necessarily be the way Nunavut's Legislative Assembly chooses to go about fixing health care problems.

"We want to take a look at the whole department and see where we can make some improvements," Anawak said.

The fiscal framework also calls for the creation of a $10 million operating reserve "to offset unforeseen shortfalls in revenue or unforeseen increases in expenditures not caused by policy or program changes."

Numbers contained in the preliminary budget for fiscal year 1999-2000 are based partly on the assumption that current negotiations with the GNWT for for dividing assets and liabilities will produce no surprises.

Negotiations are reported to be in their final stages and Bob Vardy, deputy minister of finance, said the Nunavut government will most certainly begin its mandate without a debt load or a spending deficit.

"We expect there will be an operating surplus on the books for both Nunavut and the West," Vardy said. "And we think it will be $5 to $10 million."

The OIC budget framework projects that federal transfer payments will equal roughly $558 million, or 90 per cent of the Nunavut government's total revenues in its first year of operations.

Most of the federal operating money, $503 million, will flow from Nunavut's formula financing agreement with Ottawa, signed earlier this year.

The other 10 per cent of government revenues, $63 million, is expected to come from taxes and "other own source revenues."

The Nunavut Construction Corporation will receive $10.2 million in fiscal year 1999-2000 from the Department of Public Works for the lease of 146 staff housing units, the Legislative Assembly and two office buildings in Arviat and Kugluktuk.

Here is a breakdown of the proposed budget for the Nunavut government's 11 departments:

• $142 million for the Department of Education;
• $127 million for the Department of Community Government, Housing and Transportation;
• $112 million for Heath and Social Services
• $75 million for the Department of Public Works, Telecommunications and Technical Services
• $35 million for the Department of Justice;
• $33 million for the Department of Sustainable Development;
• $23 million for the Finance Department;
• $10 million for the Department of Human Resources;
• $10 million for the Legislative Assembly;
• $7 million for the Department of the Executive and Intergovernmental Affairs;
• $6 million for the Department of Culture, Language, Elders and Youth.

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