Finance minister predicts 'largest deficit in Nunavut history' due to COVID-19

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Nunavut's finance minister said he expects the largest deficit the territory has seen because of the COVID-19 pandemic.

Before the pandemic, a deficit of $30 million was projected in February when the budget was announced. But now, halfway through the fiscal year, Minister George Hickes said that number is likely to be much higher.

"I am projecting probably the largest deficit in Nunavut's history, similar to the federal government," he said.

The revelation came after MLA for Iqaluit-Niaqunnguu Pat Angnakak asked Hickes about the territory's financial situation during a Friday legislature sitting.

In question period, Angnakak asked what the territory's projected deficit is for this year, following COVID-19 expenses.

Hickes said times are too uncertain for him to say what the exact figure would be, and that he's still waiting on federal support.

One month ago, Canada approved a $100 million increase to Nunavut's debt cap. That means the territory will be able to borrow up to $750 million.

Hickes said he has no intention of using all of that borrowing capacity or of changing existing debts from long-term to short-term through bonds, as the Northwest Territories government has done.

"There are a number of agreements or negotiations going on that will hopefully reduce that to a more palatable number," Hickes said.

The bulk of Nunavut's debt comes from lines of credit used by the Qulliq Energy Corporation. By the end of 2019, that debt sat at $452 million, the highest the government has come to its allowable debt ceiling, which was $650 million at the time.