Rankin Inlet (July 28/04) - Families will soon be back to tea and pilot biscuits if the cost of living continues to rise in Nunavut, says the mayor of Rankin Inlet.

Lorne Kusugak made the remark after the eight cents per litre price hike on all fuel products was announced by the Government of Nunavut.

The fuel increase goes into effect on Aug. 1.

The municipality of Rankin Inlet is facing a 10 per cent increase on the price of fuel it currently pays -- about a $30,000 hit to the hamlet.

Kusugak says while the strain on the hamlet will be a significant one -- especially if a hike in power rates is soon to follow -- he's more worried about families.

"This increase is going to take a lot of spending money away from families," says Kusugak.

"There are many people -- hard-working people -- who can barely make ends meet now after paying their mortgage, food, heat and clothing for their families."

The GN was able to keep the increase to eight cents per litre by blending the cheaper price of its remaining fuel inventory with this year's higher-priced fuel and raising the price before most communities received their resupply.

However, Kusugak says many lower-to-middle-income families just don't have the money to pay that much of an increase all at once.

"The Nunavut government would be really surprised if it took the time to find out how many people are working full time and are barely better off than they would be on social assistance.

"Where's the incentive to work or to own your own home?

"This might be the straw that breaks the camel's back."

Chesterfield Inlet SAO Roy Mullins made some allowances for the fuel hike in his annual budget, but not the full eight per cent.

He says cutting services to make up for any shortfall is not an option.

"There's no way I would do anything to affect our water-and-sewer services," says Mullins.

Main problem

"But, the main problem is going to be with home owners and local economies.

"In a smaller community, with 15 or 16 home owners, this increase is going to take $15,000 or more out of the local economy.

"That's tough for a small community to absorb."