Stephan Burnett
Northern News Services

Iqaluit (May 24/04) - Over the first five years of its life, the Government of Nunavut has racked up $136 million in debt, $64 million off it's maximum borrowing limit of $200 million.

That's what the Auditor General, Sheila Fraser, revealed in her report tabled May 17 in Iqaluit.

Nunavut Finance Minister Leona Aglukkaq became irritated when asked if the trend line in the debt would soon level off or start to decline.

"We have made it no secret to the federal government that the funding they provide is not sufficient," said Aglukkaq.

Aglukkaq argued that the federal funding formula is insufficient for a developing territory such as Nunavut.

"We all know we need to invest in our airports and housing. The federal government is aware that what they provide today is not sufficient," she said.

While the territorial finance minister blames the high debt level to the initialization and setting up a government, she added that the focus has now changed from a start-up phase to an expansion phase.

The Auditor General was critical of the Nunavut government's handling of overdrafts in several different bank accounts.

"We feel that the government's calculation of the types of obligations that are considered debt, for the purposes of the debt cap, needs to be refined. In our view, money that is formally borrowed is just one form of debt," said Fraser.

In her recommendation, the Auditor General stated that the Department of Finance should review the government's financial affairs to ensure that it is aware of and tracks all amounts which are debt.

The Nunavut government will now begin to focus on the expansion of private industry.

"The budget emphasized the importance of supporting fishing and mining and development in the North," said Aglukkaq.

Fourteen million dollars has been invested in an economic program to boost mineral and petroleum exploration and an additional $5 million will be provided to municipalities to promote economic development, said Aglukkaq.

While a cursory glance at the financial statements shows a reduction in overall spending within the Economic Development and Transportation since last year, the territorial finance minister says this is a function of departmental shuffling rather than a true reduction.

In the fiscal year 2003-2004, the Government of Nunavut invested $47.5 million in economic development, but in the 2004-2005 estimates only $40 million is being dedicated to the same envelope.

Another $450,000 is being spent on geological science programs to further assist the mineral exploration industry.

The Department of Sustainable Development used to have the mandate of environment protection and economic development. By separating out the two, the Government of Nunavut now has two separate departments, Environment and Economic Development and Transportation.