Paycheque ups and downs
Inuvik mayor says northern living allowance
decrease in his community doesn't make sense
Paul Bickford
Northern News Services
Published Monday, April 21 2014
NORTHWEST TERRITORIES
Inuvik Mayor Floyd Roland has a question about money - specifically what's going on with the northern allowance rates which came into effect on April 1 for GNWT employees.
Floyd Roland: Questions how the GNWT calculates the northern allowance. - NNSL file photo |
Under the new rates, which differ for each community in the NWT, territorial government employees in Inuvik saw their northern allowances decrease by $383 - from $14,139 to $13,756.
Roland - a former premier and minister of finance - has trouble figuring out why the rate decreased in his town, especially since he noted the prices of food, gas, home heating oil and other items have increased in the community.
"Clearly this doesn't make sense when you look at the cost of living going up," he said.
The issue arose at Beaufort Delta Leadership Council meetings held April 8 to 10 attended by the premier and several cabinet ministers.
"That's when we were given the heads up that there was a reduction for Inuvik and a number of communities in this region," said Roland.
The mayor is seeking some explanation about how the northern allowance rates are formulated.
That would allow communities to make suggestions on improving the way the allowances are calculated, he said. "And correct it in our eyes."
Roland also noted the Town of Inuvik uses the GNWT rate for the northern allowance it provides to municipal employees.
According to the Department of Human Resources, this fiscal year's northern allowances for GNWT workers increased in 22 communities, decreased in 12 communities, and stayed the same in two communities, which are the baseline Yellowknife and Dettah. In Yellowknife, the rate is set at $3,450 and the rates in communities vary in relation to the capital city.
The largest positive change was in Tulita, where the northern allowance increased by $4,879.
The steepest decline for an NWT community was $2,628 in Tuktoyaktuk, although GNWT employees in Dawson City, Yukon, face a drop of $3,976.
The highest northern allowance is $28,849 in Ulukhaktok.
Nicole MacNeil, director of labour relations with the Department of Human Resources, said the northern allowance is a benefit provided to GNWT employees above and beyond their base salaries, and is part of the collective agreement between the government and the Union of Northern Workers (UNW).
"It's intended to equalize the cost of purchasing goods and services between Yellowknife and the other communities where we have GNWT employees based," MacNeil explained. "So we have a methodology as to how it's calculated and that methodology is actually negotiated between the government and the Union of Northern Workers, and was established in 2005."
The rates are updated annually and become effective each April 1 for GNWT employees represented by the UNW.
The GNWT and the union would have to agree to negotiate any change to the base rate in Yellowknife.
The methodology used to set the rates in communities has two components.
The first is a transportation component to compensate employees in communities relative to the cost of return transportation between Yellowknife and Edmonton by either air or road.
The second is a cost-of-living component to compensate employees in communities relative to the average expenditure for a sample basket of goods and services in Yellowknife, including food, clothing, household furnishings, personal care and recreation costs. That data is provided by Statistics Canada every four or five years.
"What we're talking about is not that the cost of living has increased or decreased overall, generally speaking," said MacNeil. "It's the difference in purchasing the basket of goods and services in Yellowknife versus purchasing it in Tuktoyaktuk. So when we say it's decreased for, say, Tuktoyaktuk, it's that purchasing cost gap that has decreased to purchase that same basket of goods in Yellowknife versus Tuk, where comparatively purchasing that same basket of goods in Paulatuk widened."
She explained it could be the sample basket of goods and services has gotten less expensive in a particular community to narrow the gap, or it could be the cost of the basket of goods and services in Yellowknife has increased.
The new Statistics Canada data compiled last year includes national surveys, a cost-of-living differential and a survey of household spending.
MacNeil also noted the previous time Statistics Canada updated the data was in 2009, which accounts for this year's "notable changes" - both up and down - in the northern allowances for communities.
In other years when there is no new Statistics Canada data, there may be less variation to the northern allowances as the Department of Human Resources changes the transportation component of the formula based on price checks with airline companies.
Changes to GNWT Northern LIving Allowances
These are the northern allowance rates for full-time GNWT employees represented by the Union of Northern Workers. The rates for all NWT communities - plus Iqaluit and Rankin Inlet in Nunavut, and Dawson City, Yukon - were effective as of April 1, and are compared with the rates for the fiscal year that ended on March 31. The northern allowances for part-time employees are prorated.
Source: Department of Human Resources
