IQALUIT, Nunavut - The government of Nunavut is projecting a sliver-thin surplus in a budget that also promises a significant spending shift to attack some of the territory's persistent social problems.
Finance Minister Keith Peterson announced plans Wednesday to create a new Department of Family Services to focus on food security, homelessness and poverty.
"These issues of hunger, poverty and homelessness are serious," he told the territorial legislature in his budget speech. "They are exactly the issues we need to resolve if we are to fulfil our vision of Nunavut."
Peterson projected a $22-million surplus on spending of $1.48 billion, slightly less than last year's expenditures. It's the territory's second surplus in a row.
Revenues increased by about $70 million. Nunavut gets about 90 per cent of its revenues from federal transfers. Ottawa collects all royalties from the territory's resources and most of the increase came from changes to the territorial funding agreement.
Peterson used much of his speech to outline plans for the new Family Services ministry, which will take over functions from at least four different portfolios, including the giant Health Department.
"The Health Department is a very, very big department," Peterson told The Canadian Press. "A lot of our issues in Nunavut are social services related and they get swallowed up in health issues."
One priority will be to ensure Nunavummiut have access to healthy, affordable food. Many communities in the territory saw large public demonstrations last year protesting both cost and quality.
The territory recently passed legislation making it easier for hunters to donate food to community groups. It is also spending more money to improve the distribution of "country food" harvested by hunters.
The new department will be expected to complete a homelessness strategy and prepare poverty reduction legislation.
"We feel that our communities are a high priority and we've got to put a lot of focus on them," Peterson said. "That's what we're trying to do with this budget."
The new Family Services Department will get a seven per cent increase on top of its share of the budget from the old Health and Social Services ministry.
The territory is also planning to build homes again after a year of no new social housing.
The budget includes $13 million for 30 homes in Arviat and Cambridge Bay. That remains a drop in the bucket. Studies suggest that Nunavut, with Canada's youngest and fastest-growing population, has a housing deficit of about 3,600 units, with another 90 needed each year.
"Housing remains a serious challenge for this government," Peterson told the legislature.
Peterson, who was presenting his fifth budget as finance minister, said the territory's economy is slowly improving.
Gross domestic product is predicted to grow by 3.5 per cent this year. Just over half of working-age Nunavummiut are employed in the wage economy and Inuit make up just over half of the public service.
The territory's accumulated debt sits at about $203 million — just over half the $400-million debt limit imposed by the federal government.
Peterson said most of that room will be used up by expansion costs for the Iqaluit airport, which are expected to be at least $250 million.
Peterson said balanced budgets make it a lot easier to go to Ottawa to ask for special projects funding. He recently presented a five-year $500-million proposal to federal Finance Minister Jim Flaherty for housing and hydro development.
"It helped," said Peterson.
"They looked at all our finances to see how we're doing and they're not going to approve funding of that magnitude if they're not confident we can manage our projects and balance our budgets."
Still, Peterson said, it'll be years before any of the large mining developments currently being considered for the territory get under way and produce economic benefits.
"I don't know when it'll translate into a lot of positive things. But I would conservatively say that within the next five years we're going to have one of these big projects off the ground."
— By Bob Weber in Edmonton