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Nunavut government issues nearly $49M in unbudgeted money for COVID-19

Because Nunavut's assembly didn't sit this spring, the minister of finance has had to set aside nearly $49 million in COVID-19 response money — without approval from MLAs.

Airline subsidies, construction contracts use up the bulk of emergency public funds

With a spring sitting cancelled because of COVID-19, money spent on the territory's pandemic response hasn't been reviewed yet by MLAS. Those funds are being approved instead through special warrants. (Elyse Skura/CBC)

Because Nunavut's assembly didn't sit this spring, the minister of finance has had to set aside nearly $49 million in COVID-19 emergency spending — without approval from MLAs. 

The bulk of that money is meant to keep the airlines going and for bringing construction workers into the territory for various projects.

This kind of legislative spending, using unbudgeted dollars, is only allowed during emergencies like when the House doesn't sit. It's done through special financial warrants, requested by departments for approval from a financial management board and Nunavut's commissioner.

Seven COVID-19 related warrants, published in the Nunavut Gazette for April and May, add up to $48.9 million. 

It's money that's been allocated, but not all of it is spent yet. 

"We have to have money appropriated to legally enter into a contract, so we basically round a number up or use an estimation of what we're anticipating that contract will cost," said Finance Minister George Hickes, who chairs Nunavut's financial management board. 

The largest warrant allocates $18 million for Community and Government Services to isolate out-of-territory construction workers over the summer. The money will cover two-week isolations in the South, as well as food and security. Some contracts will also require the government to pay workers a negotiated wage while they isolate.  

It's not all the government has spent on pandemic response, as some previously approved money is able to be used toward COVID-19 related expenses, Hickes said, like support payments for harvesters, and even the $5.2 million the government had spent as of early June to quarantine residents and medical travellers.   

The warrants will come back to the House in the next sitting as supplementary appropriations, meaning money bills, so MLAs can evaluate how accountable the government has been with pandemic spending. 

Minister says airlines won't have to pay back 'grant'  

Four special warrants approved for airline subsidies add up to $24.6 million, for Canadian North and Calm Air from April through June. 

"This is basically a grant to the airline to keep them afloat," Hickes said.  

There are no plans now to have the companies pay the money back. 

Originally the airlines were being paid based on an average historical seat use by the government. But for more recent payments, Hickes said the airlines disclosed their financials to the government and Department of Finance staff were able to do their own analysis of how much was necessary to subsidize the companies.  

"They understood the level of scrutiny that we had to put on this discussion because these are public dollars," Hickes said. "I feel very comfortable in the work that our finance people did with the airlines that this is a fair amount. It's necessary."

As travel opens up and airlines begin to book private flights more frequently, these subsidies will be changed, Hickes said. 

The federal government gave $5 million to Nunavut airlines. Hickes called the airline funding "difficult to absorb," and said conversations are ongoing with Indigenous Services Canada about added support. 

He is hoping to see the territory's airline expenses re-evaluated by the Canadian government and reflected in any future pandemic pay outs.  

Two other special warrants covered a food program for students in Iqaluit and a wage subsidy for low earners in essential services.

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