Kerry McCluskey
Northern News Services

IQALUIT (May 24/99) - When the Office of the Interim Commissioner wrapped up its affairs on March 31 and turned the keys over to the Government of Nunavut, it also handed over a sizable deficit -- $4.4 million to be exact.

While the interim commissioner and his employees were technically the employees of the federal Department of Indian Affairs and Northern Development (DIAND), it's the new territorial government that's left holding the less than empty bag.

"It's us (that has to cover the deficit) because we signed the agreement off. Therefore we assume the financial obligation (of the OIC)," said Finance Minister Kelvin Ng.

"It should be the feds, and the premier has already spoken to (Jane Stewart), the DIAND minister about that. She didn't commit any dollars to offset the issue," said Ng.

When asked if the deficit was the result of the OIC running amok or the price to pay for a funding shortfall from the federal government -- the feds budgeted about $150 million to get Nunavut off the ground prior to division -- Ng said it was probably a combination of both factors.

"The (OIC) was trying to get established as fast as possible within the budget assigned by the federal government. Obviously they didn't adhere to that. You can't blame it on any one individual. It's probably the system," said Ng.

Towards the end of its mandate, just days before Jack Anawak resigned in December as the interim commissioner and was replaced by Joe Kunuk, the OIC tried to reign themselves in by initiating a hiring freeze and limiting travel to that which was necessary, but the deficit had already been created.

"They came to realize it late in the game and tried to curtail their expenses, but it had progressed far enough that it had accumulated to $4.4 million," said Ng, who explained that most of the deficit was incurred when the OIC set up the government's information technology systems.

While the negative opening balance is not good news for the new territory, residents will not feel the $4.4- million ding directly in their wallets or in their communities. Nor will it play upon the recently tabled balanced budget. Where it will show up is in the amount of assets Nunavut receives from the GNWT this fall.

"Because we're a new entity, our funding for the '99-2000 year was not impacted because the revenue is $610 million and $600 (million) in expenditures. What it does impact is the opening balance sheet," said Ng.

As Victor Tootoo explained before the budget was handed down 10 days ago, when the GNWT finally closes its books on division this October, a large amount of money is expected to be left over.

"I believe the projections we saw were a $62- million surplus. That won't be finalized until October," said Tootoo.

According to the finalized Division of Assets and Liabilities Agreement between the GNWT and the GN, Nunavut is set to get about 44 per cent of the surplus and the NWT 56 per cent. The $4.4-million OIC liability will be subtracted from Nunavut's share of the surplus, reducing it to approximately $27 million.

"We'll have an opening balance of a positive asset in respect to the division of assets and liabilities with the GNWT. By the same token, now we'll have a negative, a liability from the Office of the Interim Commissioner for $4.4 million. The net affect is that our opening balance sheet will be diminished," said Ng.

Jack Anawak, Joe Kunuk and Premier Paul Okalik were all unavailable for comment by press time.