Iqaluit (Nov 22/04) - Recent federal funding transfers are not expected to keep the territory from going further into debt, according to Nunavut's minister of finance.

Leona Aglukkaq told the Legislative Assembly on Nov. 17 that spending has increased by $51.2 million.

But thanks to $45.6 million in additional federal funding, the GN's deficit will only increase by $5.6 million, up to $19 million.

Overall, the GN's planned expenditures have risen from about $889 million to $941 million.

The deficit rose because of a need for increased funds for the departments of health and social services, community and government services, and education, Aglukkaq said.

A rising world energy market, a new collective agreement with the Nunavut Employees Union and a new agreement with the RCMP were also said to have increased expenses.

But Nunavut is planning to cut its overall capital expenditures.

The 2005-2006 plan will see $102 million spent on capital projects across the territory, compared with a planned $108 million for the current fiscal year, Aglukkaq said.

Health and social services will see the largest piece of the pie with a capital budget of $25.4 million.

As well, $19.5 million is expected to be spent on the Qikiqtani General Hospital in Iqaluit.

"The objective of the GN continues to be the ability to provide health care to Nunavummiut closer to home and reduce our dependence on facilities in the south," the finance minister said.

A new contract will see 50 per cent of medical travel costs for non-insured patients paid for by the federal government.

The capital estimate also includes $40 million for education and housing projects.