Doug Ashbury
Northern News Services

Inuvik (Dec 13/99) - Nellie Cournoyea, chair and CEO of the Inuvialuit Regional Corporation, in the corporation's recently released annual report, says the corporation is now amid a new financial era.

After the final land claim payment made in December 1997, the corporate group became solely dependent on the success of its business corporations in 1998.

The corporation's after-tax profit in 1998 was $8 million, down 36 per cent from the $12.6-million profit in 1997.

Direct benefits to Inuvialuit are about $9.8 million, with wages and benefits making up about two-thirds of that figure.

"1998 also brought an end to the period where the profits of the corporate group were largely sheltered from the payment of income taxes. In recent years, we have been able to write off our business profits against the losses of earlier years and in so doing have minimized the payment of income taxes," Cournoyea said in the annual report.

But this tax shelter has been largely exhausted, and the corporation, "like other successful corporations," must pay tax on profits, she adds.

With an average tax rate on profits of 43 per cent, there will be a significant effect on the cash available to the corporate group, she adds.

Assets on Dec. 31, 1998, were $278.3 million, down 8.9 per cent from $305.4 million a year earlier. Taking inflation into account, the $278.3-million figure would convert to about $185 million in 1984 dollars. In 1984 dollars, the Inuvialuit land claim included instalments totalling $152 million.

The regional corporation's business subsidiaries include land, investment, petroleum and development corporations.

The corporation's largest investment is NorTerra Inc. NorTerra's biggest company is pan-arctic shipper Northern Transportation Company Ltd. NorTerra, 50 per cent owned by the corporation, also owns Canadian North. The carrier -- the corporation's share of the purchase price was $2.8 million -- continues links to Canadian Airlines International through service contracts.

In 1998, the corporation sold subsidiary Valgro Corporation to Dresser Industries for $11.9 million. Proceeds were used to help NorTerra buy heavy-equipment company Weldco-Beales. The corporation's share of the purchase price was $18.8 million.

The Inuvialuit Corporate Group, which includes the Inuvialuit Regional Corporation and its subsidiaries, began with the signing of the Inuvialuit Final Agreement June 5, 1984. Communities with the region are Aklavik, Holman, Inuvik, Paulatuk, Sachs Harbour and Tuktoyaktuk.

The agreement provided financial compensation and ownership of 91,000 square kilometres of land including 13,000 square kilometres with subsurface rights to oil, gas and minerals.

One of the region's most interesting sites is the Darnley Bay anomaly near Paulatuk. The site, to be drilled this winter, could contain a massive nickel resource. For now, there is only speculation about the site.