Question Period Note: COVID-19 Funding to Territorial Governments

• Canada remains committed to supporting provincial and territorial governments in responding to COVID-19.

• Territorial governments have unique needs related to remoteness, transportation and health care limitations, and have an higher cost of living and doing business.

• Canada is directly addressing these unique territorial needs with $130 million in funding for four key priorities:

o $72.6 million for health and social services;

o $17.3 million to maintain essential airline services;

o $15 million in supports for businesses; and,

o $25 million to Nutrition North Canada for essential goods.

• I remain committed to collaborating with territorial governments and to upholding the well-being of Northerners throughout this crisis and into the future.

Background

The Government of Canada is taking decisive action to help Canadians facing hardship because of COVID-19. This includes working closely and proactively with provincial, territorial and Indigenous governments to meet the unique needs of Indigenous and Northern communities, which are among the most vulnerable to COVID-19. On April 14th, the Prime Minister announced $130 million in targeted Northern funding to address immediate health, economic, and transportation needs identified by territorial Premiers in correspondence in mid-March.

Part of this funding includes the transfer $72.6 million directly to the governments of Yukon ($18.4 million), Northwest Territories ($23.4 million), and Nunavut ($30.8 million) to support COVID-19 preparations and responses related to health and social services. This funding builds on the $500 million already announced for provincial and territorial governments through the Canada Health Transfer (CHT) and will enable territorial governments to address their respective critical priorities as they see fit to minimize the spread of the virus.
In recognition of the hardships currently faced by the territorial business community, the Canadian Northern Economic Development Agency (CanNor) will be immediately making available $15 million in funding towards direct support for ongoing operating costs incurred by territorial small- and medium-sized businesses, in order to help them continue to play their vital role in Northern communities. This relief funding for territorial businesses complements the suite of relief measures implemented by the Government of Canada to address the impacts of the COVID-19 pandemic on the Canadian economy. CanNor is working to provide this relief funding as quickly as possible to the businesses that need it the most. Further details will become available in the coming days once the program fully rolls out.

To support important air services to northern communities, the Government of Canada is providing up to $17.3 million to the governments of Yukon ($3.6 million), Northwest Territories ($8.7 million), and Nunavut ($5 million) to support northern air carriers. This funding, in partnership with investments by the territorial governments, will ensure the continued supply of food, medical supplies, and other essential goods and services to remote and fly-in communities.

The Government announced a one-time financial injection of $25 million in order to increase Nutrition North Canada’s subsidy rates on nutritious food and essential items. The targeted/highest subsidy level has been increased by 50cents/kg, and the higher subsidy level has been increased by $1/kg. By providing an additional subsidy on a broad range of items, residents of isolated communities will be better able to afford to feed and protect themselves and their families. These changes are temporary measures to assist residents of isolated northern communities during this challenging period. This decision will extend until March 31, 2021.

The Government of Canada will continue to work with territorial and provincial governments and other partners to explore short-to medium term options to address other needs directly related to the COVID-19 pandemic and economic recovery.

Territorial Transfers
• Canada will transfer $72.6 million to the governments of Yukon, Northwest Territories, and Nunavut to support their COVID-19 health and social services preparations and response, as follows:
o $18.4 million for Yukon;
o $23.4 million for the Northwest Territories; and,
o $30.8 million for Nunavut.
• This funding builds on the $500 million in funding already announced for provincial and territorial governments through the Canada Health Transfer and will help the territories address the critical priorities they identified to minimize the spread of the virus.

Northern Air Services
• Canada will provide up to $17.3 million to the governments of Yukon, Northwest Territories, and Nunavut to support northern air carriers in maintaining a basic network of routes and services, as follows:
o $3.6 million for Yukon;
o $8.7 million for the Northwest Territories; and,
o $5 million for Nunavut
• This funding, in partnership with investments by the territorial governments, will ensure the continued supply of food, medical supplies, and other essential goods and services to remote and fly-in communities

Nutrition North Canada
• Canada will provide an additional $25 million to Nutrition North Canada to increase subsidies so families can afford much-needed nutritious food and personal hygiene products.
• This one-time investment will increase the federal subsidy rates for essential items and reduce the cost of essential items to consumers.
• The program is demand-driven therefore funding will be allocated according to where eligible items are purchased.
• Given cost of living considerations and historical data, it is anticipated that approximately 40% of the funding allocated for the Nutrition North Canada subsidy program will be spent in Nunavut, 5% in the Northwest Territories, and 1% in Yukon which has only one eligible community.

Territorial Business Support
• To assist businesses with operating costs not already covered by other Government of Canada measures, the Canadian Northern Economic Development Agency will make available $15 million in non-repayable support for businesses in the territories.
• This support will help address the economic impacts of COVID-19.
• Further details about this measure will be made available in the coming days.