Iqaluit (Feb 28/05) - Education, health and social services were the big winners Friday as the territorial government announced its spending plans for the coming year.

But even with increased expenditures across the board, the Government of Nunavut still expects to post a $3.6 million operating surplus in the coming year.

Finance Minister Leona Aglukkaq answers questions from reporters prior to delivering her budget address in the legislative assembly Feb. 25.

It's all possible thanks to a an increase in federal funds.

A new territorial financing arrangement signed with Ottawa in October will provide about $50 million this year.

Another $17.5 million will be delivered through a variety of health care agreements.

"Had we not received the federal funding ... we would not be in the situation we are today," said Finance Minister Leona Aglukkaq prior to unveiling the 2005-2006 territorial budget on Friday.

The budget was delivered a day late after a blizzard shut down business in Iqaluit for most of last Wednesday and all day Thursday.

This year's budgeted expenditures of $935.8 million show the GN's spending is 27 per cent higher than the $679.5 million budgeted for 2001-2002, but Aglukkaq is aware dramatic spending increases can't continue forever. "We need to also keep in mind that the money set out in the new formula will stabilize," she said.

The federal government is expected to provide almost $891 million, or nearly 92 per cent of Nunavut's total projected revenues of $972.4 million.

Money spent on operations and maintenance - which accounts for 89 per cent of the budget and includes everything but capital projects - will increase by 5.4 per cent over last year's revised estimates.

While last year's expenditures were budgeted at $850.7 million, revised totals released in October show spending was 11.2 per cent higher - an increase of $107.1 million - for a total of $957.8 million.

In 2005-2006, Health and Social Services budget is $215.2 million, while Education gets $174.2 million.

Capital costs down

Capital spending is expected to hit $101.9 million, down significantly with the completion of construction on Joamie school in Iqaluit and health centres in Rankin Inlet and Cambridge Bay.

Construction of 80 new houses is planned for the coming year, with the Nunavut Housing Corp. budgeting capital costs of nearly $21.2 million.

Initial response to the budget has been positive.

With money allocated for numerous municipal programs, including fire fighter training, a $4-million increase to the municipal operating fund, and an increase to the water and sewage subsidy program, Nunavut's Association of Municipalities (NAM) called the budget "mostly a good news story."

But NAM President Johnny Ningeongan lists the absence of a contract with NAV Canada to provide funding to operate airport radio services in communities.

He also mentioned the potential power rate increase to be announced in the legislative assembly Feb. 28.