Newspaper article The Canadian Press
Nunavut Forecasts Budget Surplus, but Says Billions Needed for Infrastructure: Nunavut Projects Small Budget Surplus
IQALUIT, Nunavut - The government of Nunavut says it will reverse two years of deficit budgets to post a small surplus in the coming fiscal year.
But that surplus will result from lower capital spending plans, meaning no new social housing will be built in the territory next year despite the desperate need.
In delivering his 2012-13 budget to the territorial legislature Wednesday, Finance Minister Keith Peterson admitted that bringing Nunavut's houses, schools and public facilities up to snuff is simply not within the territory's financial capacity.
"We would need to double, even triple, our annual capital plan," he said in his speech. "We cannot do this within our current budget."
In an interview with The Canadian Press, Peterson said Nunavut is hoping the federal government will increase the territory's borrowing limit, allowing it to start private-public partnerships to help build everything from housing to health centres to harbours.
"We need to get an indication from Ottawa that they will increase the borrowing limit," Peterson said. "If we can pull it off, P3s would be an opportunity for big projects."
Those talks are ongoing, Peterson said.
Budget documents show this year's books will close with a $34-million deficit. That's a lingering hangover from 2010, when the Nunavut Housing Corporation underestimated the costs of building 750 homes by about $60 million.
For the coming year, however, Peterson said Nunavut will have a $38-million surplus after $1.3 billion in spending. That's about $110 million less spending than in 2011-12, mostly due to lower capital budgets.
Peterson warned that Nunavut's mining-dependent economy is vulnerable to swings in the global economy and that surplus could change.
"Ultimately, mining investment will probably accelerate, producing jobs and revenue," he told the legislature. "Until then, however, we must remain vigilant about our financial situation."
Nunavut gets no royalties from its natural resources. …