Nunatsiaq Online
EDITORIAL: Around the Arctic August 20, 2014 - 7:26 am

A bad idea

"It’s not in the public interest to use scarce funds that would otherwise go to public governments"

NUNATSIAQ NEWS

It’s no surprise that northern Canada’s private Inuit associations and birthright corporations are delighted to learn that Ottawa has just made them eligible to take money out of two big federal government infrastructure funds: the New Canada Building Fund and the P3 Canada.

But it’s a bad idea. In infrastructure-starved Nunavut, where federal contributions are already inadequate, the cash-poor territorial government and its municipal dependencies now face a new set of competitors.

In Nunavut’s case, this new group of private corporate competitors do not provide public services. They don’t run schools, health centres or justice services. They don’t deliver water, dispose of garbage or handle sewage. They don’t because they’re not governments.

But if they seek infrastructure dollars from Canada, they’re now classed as governments.

They now rank among the luckiest corporate welfare bums in Canada — because they are now eligible to harvest federal dollars that were originally intended to pay for public roads and ports, clean drinking water, garbage disposal, airports and other public uses.

The federal government put the new policy into effect following its last budget.

Under it, a long list of private corporations, and their associated business subsidiaries are eligible for public infrastructure funds. The list includes Nunavut Tunngavik Inc., the Kitikmeot Inuit Association, the Kivalliq Inuit Association, the Qikiqtani Inuit Association, the Makivik Corp., the Nunatsiavut Government, and the Inuvialuit Regional Corp.

Of those, only the Nunatsiavut government in Labrador can legitimately call itself a government. As such, it was likely eligible prior to the policy change anyway.

First Nations band councils and governments are also now eligible. No problem there. Unlike Canada’s private Inuit associations, they’re real governments, providing a range of essential services.

In any case, for the P3 Canada Fund the new eligibility rules don’t even make sense.

P3 projects, public-private partnerships, are, by definition, long-term deals struck between governments and private companies for expensive pieces of infrastructure that governments cannot normally afford to build. The P3 fund helps these deals get started by contributing, usually, up to 25 per cent of the cost.

But how, exactly, can a private company like Qikiqtaaluk Corp. or Kitkmeot Corp. strike a P3 deal with another private company?  It appears as if the federal government has found a way to subsidize private-private partnerships, an absurd mockery of the original P3 concept.

And for Nunavut, the much-bragged-about New Building Canada Fund amounted to thin gruel even before the new eligibility rules came into effect. Over 10 years, that fund gives Nunavut $263 million for infrastructure — only $26.3 million a year.

Set against Nunavut’s urgent infrastructure needs, that’s a pittance. Now, the territorial government and its municipalities must compete for it against a new set of players.

Throw in the Gas Tax Fund, worth about $163 million over 10 years, and Nunavut gets a total of $419 million over the next 10 years.

Federal government press release writers love to play up that big $419-million number. But that still only amounts to $41.9 million a year. With a new set of players eligible to stick their snouts into the feed-bowl, that fund has effectively shrunk.

Private corporations like the Kitikmeot-based Nunavut Resources Corp. have emerged with some interesting and possibly useful proposals aimed at supplying mining companies with roads and ports. But if those much-hyped projects are viable, they should be able to find the necessary investment capital on private markets.

Another potential P3 project could involve some combination of road, port and hydro plant in south Baffin to serve a potential diamond mine at Chidliak. If such a scheme is viable, any federal funds should flow through the territorial government, which has always been eligible for them, and where some modest semblance of transparency and accountability could be achieved.

If the federal government believes it’s good policy to provide handouts to private businesses, including private aboriginal businesses, that’s their prerogative.

But it’s not in the public interest to use scarce funds that would otherwise go to public governments for public infrastructure.

The federal government could accomplish the same objectives by either creating new aboriginal business programs or by putting more money into existing ones. JB

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