Rankin Inlet (Nov 08/04) - Partnerships may be the most effective way to improve financial services to all Nunavut communities in a cost-effective way, says financial consultant Robert Trudeau.

Robert Trudeau of RT Associates Ltd. discusses aspects of the Nunavut financial institution report with Atuqtuarvik Corp.'s Ken Toner, right. - Darrell Greer/ NNSL photo

Trudeau appeared before Nunavut Tunngavik Inc.'s (NTI) annual general meeting in Rankin Inlet this past week on behalf of RT Associates Ltd., the company contracted to conduct a feasibility study into bringing financial services to Nunavut communities.

Currently, Iqaluit, Rankin and Cambridge Bay are the only towns with banks.

To date, the study shows establishing a Nunavut bank would be a difficult undertaking with such a limited deposit base, Trudeau said, especially in smaller communities where cumulative savings would be less than the 49 per cent market share needed to break even.

He said a more feasible approach would be through an agency model, where a bank, credit union or trust company may provide financial services at a small kiosk set up inside an existing store.

"Another possibility would be to invest in a southern institution with the intent of gaining more control through that arrangement, getting more access to capital and acquiring the services we're looking for in the smaller communities," said Trudeau.

"Right now, we have to look at what we can we do in the short-term to address the immediate needs of access in the communities.

"Over a long period, what sorts of arrangements can we have by involving a partner, and getting ourselves involved with investment and ownership of an existing institution?"

While long-term plans need further study, more services could be made available to smaller communities through a partnership with an existing bank. Trudeau said the Royal Bank, already in Nunavut, is interested in looking at ways to form a partnership.

Arctic Co-operatives Ltd. is also interested in looking at what it can do to improve banking services to communities doing without, he said.

"We also have to make people aware of what these financial services and products are and what they would mean to them, such as getting access to more personal loans and business loans.

"The work being done is pointing towards good interest from potential partners and that's a positive direction to be moving."