Government of Nunavut (“GN”) Finance Minister Keith Peterson presented the territory’s 2011-12 budget on March 1, 2011. This budget includes an anticipated decrease in revenue of 2.5% in 2011-12 compared to the prior fiscal year. As a result, the government will run a deficit of $50 million in 2011-12, while maintaining a reserve of $89 million for contingency and supplemental needs. The GN will continue to focus on their long-term goals of investment in education, social assistance and health for the Nunavut people. There were no commodity tax changes announced in this budget.
Fuel tax applies to fuel purchased or brought into the territory and it is the only consumption tax for which the GN offers a rebate. However, this rebate is costly, as it results in more than half of the total fuel tax revenue being used to fund the rebate. Notwithstanding this reality, due to the government’s continuing focus on encouraging mining activities within the territory, net fuel tax revenue will continue to decrease in the current year.