Iqaluit (Sep 13/04) - About 20 people showed up to hear a two- to three-hour presentation and discussion led by Greg O'Neill, of Arctic Co-ops Ltd., on what it will take to open an Iqaluit-based credit union to serve all of Nunavut.

"This is probably the best opportunity we've had in 15 years to get a credit union established in Nunavut," he said.

He said the first step is to survey residents of the capital to determine how many would be willing to move their money to a credit union. Step two would involve similar investigations in Nunavut's other communities.

O'Neill said southern credit union centrals have been contacted to see whether or not they would provide financial support to a Nunavut-wide institution, but no commitments have been made.

Representatives present at the meeting from the territorial government and Nunavut Tunngavik Inc. (NTI) cautioned against an Iqaluit-centric approach.

With the Bank of Montreal set to close the doors on its Iqaluit branch in November, NTI president Paul Kaludjak sees a real need for such a banking institution that would serve the "little guy."

"It's really important because we continue to lack proper services to our beneficiaries in communities," Kaludjak said.

An effort to start a territory-wide credit union in the mid-'90s failed because the $7 million required could not be raised.

Kaludjak says cash may still be a problem, though he thinks the political will may eventually bring the idea into being.

"I wanted to see something materialize this time around," the NTI president said.

A full report on NTI's research into various financial instiution models is expected to be delivered at the group's general meeting in Baker Lake, Sept. 14-16.

Rob Martin, a spokesman with the Credit Union Central of Canada, sees benefits to starting a credit union because of Nunavut's small potential deposit base and population.

"It keeps the money in the community, whereas a bank or a trust company might not do that," Martin said.

The difference between credit unions, trust companies and banks is in the ownership structure. In a credit union, members buy shares which give them a level of control over the institution.

"Basically you do your banking at the credit union, but you also own it," Martin said, adding the focus of a credit union would be on community development.

Trust companies and banks are owned by one person or a small group of people.

"They can leave if it's not very profitable," Martin said. "There's no way of really pinning them down."

Recent Nunavut legislation would allow for larger credit unions in some provinces to set up branches in Nunavut, Martin said, though the level of control given to the territory is something that would have to be negotiated.

More important things

But Rick Doucet, senior administrative officer for Iglulik, thinks there are more important needs than a territory-wide financial institution.

"I think what everybody needs is a lesson in budgeting, and I really believe that it might be a waste of time to pursue a credit union," Doucet said.

Though if an organization established itself in small communities where banks refuse to go, Doucet sees that as an advantage. Other communities also see a need for a physical presence.

"If the bank is in town, that would be good, but when it's out of town, it's pretty hard to save," said Jayko Neevecheak, mayor of Taloyoak. "It could try to get more local businesses going, that would be good."

Without a bank in Iglulik, Doucet estimates about half of his employees do their banking through ATMs, on credit cards or with cash.

Kaludjak hopes any institution established by NTI and potential partners would be present in the smaller communities, though he is still waiting to hear whether the idea makes financial sense.

Martin sees O'Neill's Arctic Co-op system as an important part of making a Nunavut-wide presence possible.

"If a credit union could possibly piggy back on a system like that, then I think it wouldn't be a problem," he said.

Government should be part

Howard Dogach, president and chief executive officer of Credit Union Central of Ontario, the central bank for the province's credit unions, says the government should also be involved.

"You need to go to people like the local government and say 'listen, how much money are you willing to deposit in the credit union in order that it can have a chance of succeeding?'"

Minister of Economic Development David Simailak has said the government will look at future funding proposals, but won't commit any money for the time being. Calls to his office were not returned by press time.