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Sunday 05.02.2012

Nunavut tables its budget March 8

The budget also includes money to protect industries under international threat such as that posed by the European ban on the import of seal products.

Nunavut has become one of Canada's few governments so far this year to project a balanced budget, but Finance Minister Keith Peterson is warning that red ink flows downhill, Canadian Press reports.



“We do not generate very much of what we spend,” he said in the territorial legislature as he tabled his 2010-11 financial plan Monday. “Fully 93 per cent of our budget comes from the federal government, which faces years of deficits.”

Ottawa, which has predicted a $49-billion deficit this year, has cut transfer payments before when trying to balance its books, Peterson warned. And while transfers are expected to be stable until at least 2014, Nunavut's budget documents point out those payments were cut nearly 25 per cent during the late 1990s.

“We need to reduce our reliance on these transfers,” Peterson said. “It will take years, but we must improve our ability to pay our own way.”

Just how long the road to self-sufficiency will be was hinted at in his $1.3-billion budget.

Social assistance and social housing costs have grown by more than nine per cent a year since 2005. That growth rate is about 50 per cent faster than the growth in federal revenues, more than twice the growth rate of all government revenues and at least eight times faster than the expansion of Nunavut's population.

Health costs are also rising faster than federal transfers.

“It is an open question whether or not (the territorial government) can afford to help ameliorate Nunavut's challenging social conditions further without significantly higher revenues and, if possible, more cost-effective programming.”

Peterson's budget does increase education funding. The government's largest spending increase – $12-million – will help pay for developing an Inuktitut-language curriculum. Its lack has been identified as one of the main reasons for the territory's dismal 25 per cent high school graduation rate. The money will also help develop Inuit leadership within the school system.

“Graduation should not be a challenge,” Peterson said. “Rather, it should be our expectation.”

Nunavut also plans to spend new money to develop what it does have, such as arts and crafts. Film and video production – a $7-million industry in Nunavut – will also receive a small funding boost.

And the government hopes tourism will get a bump from interest generated in the Arctic by the Vancouver Olympics, where Inuit symbols where prominently featured.

The budget also includes money to protect industries under international threat such as that posed by the European ban on the import of seal products. A “communications group” is to be set up to address criticism of Nunavut's wildlife management.

“We face issues outside the territory often because our agenda, our way of life, and our plans are not well understood ... It is about time that we tell our own story, so that we can be understood for who we are,” Peterson said.

Mineral exploration, a mainstay of the Nunavut economy, isn't expected to recover much from last year's sudden drop when the global financial collapse dried up capital for junior mining companies.

Peterson also emphasized again the importance of gaining control from Ottawa over resources and the revenues they create. Still, documents show that devolution isn't the answer for the nearly 11-year-old jurisdiction, CP notes.

“This revenue is likely to be very modest for the foreseeable future,” the documents say.

“It is important that Nunavut's private-sector economy expand and diversify so that it can untie itself from the public sector. The drivers of this expansion are Nunavummiut themselves.”