More than $200 million in unbudgeted relief came from the Government of Canada as help with the Covid-19 pandemic
The large deficit the Government of Nunavut (GN) was expecting due to Covid-19 related spending in November of last year has been offset by a number of financial injections by the Federal government over the course of the Covid-19 pandemic.
The 2021-22 budget tabled for the fiscal year on Feb. 23 credits the feds for helping offset the significant costs of Covid.
“As we continue to live with Covid, I want to acknowledge our federal counterparts for their efforts in trying to understand and support Nunavut’s needs during the pandemic,” said George Hickes, Nunavut’s minister of Finance speaking to the Nunavut legislature.
The mandatory 14-day isolation in southern hubs for those entering Nunavut, support for airlines, testing for Covid-19, vaccine delivery equipment and other public health measures incurred a ‘massive fiscal response’ from the GN over 2020 and early 2021.
Much of the expected deficit related to those costs was offset by the federal government, with just over $200 million in unbudgeted relief coming in over the past year.
$78 million in new funding from the feds came in for medical travel under the NIHB (Non-insured Health Benefits) program, with Canada helping co-pay medical travel according to Hickes, in addition to the $130 million in Covid relief given to Nunavut.
“The federal Covid support remains critical to our efforts to fight the virus. The NIHB funding, while a one-time payment, brings the federal government closer to acknowledging the actual costs of delivering this important medical travel program on their behalf.”
With the average cost of each medical trip down south going down with this new funding, it allows more funding for other needs.
“The majority of the money we got obviously went to medical travel, but we had a budget to allocate to medical travel to offset that. It’s probably the first time in Nunavut’s history that Health actually has a surplus,” said Hickes.
Hickes says he looks forward to establishing a ‘long overdue agreement’ regarding medical travel with the federal government before the end of March.
Due to uncertainty in how much the federal government is going to provide as well as how much longer the isolation hubs are needed, future monies for the isolation hubs are not yet allocated. The Department of Finance maintains that this is not a sign that the hubs are going away any time soon.
Costs related to construction workers staying in isolation hubs are worked into the cost of each capital project, while $64.2 million was allocated to isolation hubs between April 1, 2020 to March 31, 2021.
By the numbers: outlook positive
Overall, Hickes said “we’re looking at a more balanced budget for this fiscal year.”
The Government of Nunavut forecasts $2.3 billion in revenues, and plans to spend just over $2.0 billion on programs ($1.8 billion) and capital investment ($164 million).
Last year $50 million was held back as part of a contingency fund, for the 2021/22 fiscal year $75 million was set aside, approximately 3.5 percent of the budget.
All of the $50 million of the previous year’s contingency fund was spent, necessitating an increase in this year’s contingency fund.
The GN forecasts an operational deficit of $14.3 million, assuming the contingency funds are spent.
As of Dec. 31. 2020, total government debt stood at $446.6 million, mostly related to capital leases, the Qulliq Energy Corporation and the Iqaluit Airport. The Government of Canada limits GN borrowing up to $750 million, leaving $303 million in debt room.
New investments highlighted by the Finance minister include more in-territory options for vulnerable people in Nunavut.
“We’re looking at community engagement, we want to make sure that communities are supported, it’s very important that we deal with our most vulnerable, a fairly substantial increase to family services to deal with vulnerable youth,” said Hickes.
“(It was) one of the things that Covid enhanced. We’ve always recognized we need to bring more services to those at home and more in-territory care, (now we have) some of the financial ability to be able to do that.”
Pandemic Response Secretariat
In 2020, the work many health care and GN employees do was diverted in response to the pandemic.
While “that’s fine for a short period of time … we’re at the stage now where we’re a year into this pandemic, we’ve had a lot of people who have been diverted,” said Hickes.
This prompted the need from the GN’s perspective to have a dedicated secretariat for the pandemic.
“The longevity of the secretariat will be very dependent on how Covid deteriorates, and then we can get a better handle across the world,” he added.
It will be a ‘short-to-medium’ term solution according to the minister, to make sure they can respond to Covid while not diverting staff resources from other duties.
New investments highlighted in the 2021 budget:
- $10.6 million to support out-of-the-territory mental health and addictions treatment
- $8.7 million to support the hiring of new educators, and a higher student-educator ratio, across Nunavut
- $5.8 million to continue to secure and strengthen computer networks
- $4.8 million to fund a pandemic response secretariat
- $4.5 million support health services, and increased security at health centres
- $2.9 million to staff the Aaqqiqiqiarvik correction facility, set to open in the fall
- $2.7 million to support residential placements for youth with complex needs
- $2.0 million to improve school bussing services
- $1.3 million additional funding to boost shelter capacity
- $1.2 million in funding for a new colorectal cancer screening program
- $0.7 million to develop a Bachelor of Social Work program at Nunavut Arctic College
- $0.7 million to boost the supplementary benefits program for low-income seniors
Source: Government of Nunavut