With the highest poverty rate in the country, and a population that is both geographically isolated and largely Indigenous, Nunavut is unique both in it's poverty and demographics. Despite the territory’s limited financials, the Nunavut government has taken some strong steps this year to address the challenges it faces.  This year has also been historic; through the signing of the Nunavut Lands and Resources Devolution Agreement with Canada, Nunavut has taken a momentous step toward self-determination.

Nunavut has immense infrastructure, housing, and community needs, but unlike more affluent parts of Northern Canada, it lacks the underlying wealth or income sources necessary to meet these needs unassisted. The territorial government announced decisive steps to target the territory’s needs in its recently tabled 2024 budget, and while Nunavut is the only territory running a modest deficit, the proposed investments will help poverty reduction efforts.

The major policy and infrastructure priority for Nunavut is Nunavut 3,000, a bold $2.6 billion public-private partnership to build 3,000 new units of housing across the territory by 2030. This new housing would help to both accommodate a fast-growing population and support current residents—many of whom are underhoused or living in overcrowded conditions—while also replacing a significant amount of the housing stock, much of which is in need of substantial renovation. At time of writing, more than 300 units are under construction or in the contracting phase. Although the timeline may need to be extended, significant progress has been made thanks to the partnership between all levels of government and the private sector.

To grow, Nunavut could establish active and stronger partnerships with industry and the federal government. The recently released  defence policy update (DPU) points to Arctic sovereignty as arguably the top national security and defence priority for Canada. For actions detailed in the policy to have a meaningful impact, the federal government must be a real and active partner in supporting community and infrastructure development throughout Northern Canada, particularly in Nunavut given its strategic proximity to major international shipping channels. This political situation presents an important opportunity for increased federal investment, but it must be accompanied by related commitments from federal and territorial governments to ensure that locals benefit both socially and economically.

Similar opportunities also exist with respect to the federal government’s objective to position Canada as a world leader in critical minerals. To date, the federal strategy references the opportunity and acknowledges the need to develop local training and skills capacity to realize potential projects but no funding has been announced. The federal government may soon announce more tangible investments as part of its Sustainable Jobs Training Centre initiative. It is expected that the initiative will soon include funding for economic activities in northern communities.

While Nunavut raised its minimum wage to $19 per hour and its income supports early in 2024, these increases came after long periods of stagnation. Rather than sudden, large increases, more predictable and consistent income increases would go a long way toward protecting the poorest population in Canada from the highest costs of living.

Poverty Overview

Nunavut is the poorest, most remote jurisdiction in Canada. More than 1 in 3 residents (34.9%) live in poverty. It is also the jurisdiction with the highest costs of living. The territory’s capital, Iqaluit, is the most expensive location in Canada—residents need nearly $120,000 per year to cover the most common living needs.

While the territory is rich in potential resource wealth and is geo-strategically located at the foot of Arctic shipping lanes, few residents of Nunavut have enjoyed the economic advantages that these factors might promise.

People in Nunavut largely agree that better infrastructure, more Internet access, and more mental health and addictions supports are some of the most important issues relating to poverty reduction.

As part of the federal poverty reduction strategy, Statistics Canada was directed to construct a Northern-specific market basket measure (MBM-N) of poverty so as to better represent the needs and costs of living in the North. The MBM-N was applied to the 2021 census, but Statistics Canada has not yet released backward-adjusted data series for comparisons to earlier periods. Any comparison between the degrees of poverty reduction over time is therefore limited.

Children and youth account for almost half of the population in Nunavut, a higher proportion than in any other province or territory. Of those, 38 per cent are children (under 18) and 11 per cent are youth (18–24 years). Overall, nearly 1 in 2 (43.5%) children live in poverty, which is a staggering figure by any standard.

The senior population held steady at 4 per cent between the 2016 and 2021 censuses. Poverty rates for this group are exceptionally high compared to the national average—about 1 in 4 seniors (26%) are living in poverty.

Comparison with other Territories

The poverty rates among families and individuals differ greatly among the three territories. For example, in the Yukon, the overall poverty rates are similar to rates in Canada as a whole for both people who live alone and people who live as a couple. One exception to this is the poverty rate among lone parents, which is slightly lower than the national rate. In the NWT, however, poverty rates among couples and lone parents and those living alone are slightly higher than they are in Canada as a whole. In Nunavut, poverty rates were higher overall than the Canadian average, with significantly higher rates among lone parents, lone individuals, and nearly every other demographic group. Poverty rates are particularly high among lone parents in Nunavut—more than half (54.%) of lone parents live in poverty in Nunavut, which is unprecedented in any other context in Canada.

Table 1. Poverty rate for select groups by Canada and the territories, 2021 census^[1]

Although the overall poverty rate among seniors in Nunavut (26%) is lower than the territorial average (34.9%), seniors who live alone face greater hardship. Nearly 1 in 2 seniors who live alone (45.7%) live in poverty. This suggests that although seniors generally benefit from the federal retirement income system—for example, OAS and GIS, among other supports—the supports do not go very far in Nunavut where costs are particularly high for everyone, especially if you do not have a cohabitant to share them with.

Poverty and Inequality in Nunavut

Unfortunately, the small sample sizes mean that Statistics Canada does not report poverty rates that allow for disaggregated analysis in the territories by Indigenous or racial identity, or by immigration status. However, knowing that these demographics generally experience higher rates of poverty across Canada—as seen, for example, in the data for the provinces—we can assume that Nunavut is similar and that it must provide additional support for groups that have a disproportionate experience of poverty.

Nunavut is the traditional home of over 40 per cent of Inuit people in Canada, and the latest census reported that nearly 85.7% per cent of Nunavut residents have some form of Indigenous identity.

According to the last census in 2021, immigrants represented just 3 per cent of Nunavut’s population. One - fifth of them are recent immigrants who arrived in Canada between 2016 and 2021.

Inuit people, who make up the majority of Nunavut’s population, have historically been marginalized, which has had a lasting impact on communities. This is reflected in the fact that 87 per cent of people who live in Nunavut believe that tackling racial and ethnic inequality is an important part of addressing poverty; across Canada, by comparison, 71 per cent say the same. Similarly, 91 per cent of residents say that providing regular and reliable supports to Indigenous people is important. While programs to help do exist, they are generally supported by sporadic funding, which makes long-term change difficult to achieve.

Labour and Education

As of March 2024, the unemployment rate in Nunavut was 8.7 per cent, which is slightly lower than a year ago (−0.3 percentage points) but much higher than the national average of 6.1 per cent. The percentage of people participating in the workforce was also significantly lower in Nunavut (60.2%), compared to Canada as a whole (65.3%) as of March 2024.

Youth aged 15–29 who are not in employment, education, or training (NEET) are at particular risk of poverty. In 2022, more than one-third (36%) of youth in Nunavut were in this situation—more than triple the rate in Canada as a whole (11.6%). Among Nunavut adults aged 25–64, more than half did not have a high school diploma or equivalent, which is significantly higher than the rate for this group in Canada as a whole (11.6%).

The lack of higher education among the local population presents a significant barrier to equitable growth. In our national survey, 92 per cent of respondents in Nunavut said that upskilling and training workers would be an important step toward reducing poverty. If residents do not receive training, there is a greater risk that outside workers will be flown in to work on future mining and infrastructure projects in the territory.

Wages are also a significant concern for many residents—91 per cent say that increasing the minimum wage is important to them, which is 11 percentage points above the national average for this indicator and the highest rate in Canada.

Access to childcare is also a particular challenge in Nunavut. The rates of access to childcare in both the Yukon and NWT are comparable to, or in some cases higher than, the national average, but access rates in Nunavut are low. Only about 1 in 3 families currently have their children in childcare; this represents a drop of about 5 percentage points (nearly 20%) compared to before the COVID-19 pandemic.

Another major barrier to employment, particularly in a region as remote as Nunavut, is the lack of consistent and affordable access to broadband Internet. To date, no residents across the territory have access to broadband. Instead, residents rely on satellite services, which are much more expensive and less reliable. Ninety-five per cent of the population say that Internet access is an important part of poverty reduction. A public-private internet partnership is currently in various stages of development and will develop a formal fibre optic connection between several Nunavut communities and the rest of Canada.

The Cost of Living and Affordable Housing

As with other variables, data is not consistently or readily available at the territorial level to allow for a robust assessment of certain essentials such as food and shelter. The following is a short summary of what we do know.

Between December 2022 and December 2023, the overall price of goods and services in Iqaluit increased by 2.5 per cent, which was slightly lower than in Canada overall (3.4%), according to the Consumer Price Index (CPI). The CPI does not report at a territorial level to break down the sub-index for food and shelter costs.

Core housing need, a measure that identifies which households are living in housing that is inadequate or insufficient and unaffordable, is experienced differently in Nunavut, compared to most communities elsewhere in Canada. In much of the country, affordability is the prime concern, whereas in Nunavut residents are more likely to be in core housing need due to inadequate housing. Thanks to a variety of subsidies, fewer than 10 per cent of households in Nunavut are paying too much for their housing (about 6% overall, ranging to as high as 13.7% among those in social housing), but about 1 in 3 are living in sub-standard accommodations. Among households that are renting in the private market, 39.1 per cent are living in sub-standard accommodations. However, respondents to our poll in Nunavut indicated that housing affordability is indeed a major concern for many, with 55.9% of respondents saying they spent 30 per cent or more of their income on housing costs.

With the increased costs of living in Nunavut and a lack of economic opportunity, social supports are key to a decent quality of life for many people. As such, 94 per cent of the population believe that increasing the allocation of last-resort benefits is important (compared to 76% nationally). Community supports are seen as equally important, with 91 per cent of Nunavut residents saying they would like to see increased funding for community and social services.

[1] Note that the Canada-wide rate reports poverty on the basis of the national MBM, while the results for the territories use the northern-specific MBM. If the MBM-N were applied as a concept to the rest of Canada, overall rates of poverty nationally would be higher because of the higher level of income that is assumed to be needed to pay for certain essentials.

Cost of Living

Nunavut has among the highest home-heating costs in the country. The Senior Fuel Subsidy and Nunavut Homeowner Fuel Rebate both offer support to offset the high cost of heating fuel in the territory. Although Nunavut provides an offset for carbon pricing itself, there is no broad-based support available to help people who rent or working-aged people with low incomes with the costs of heating their homes. The territory does provide a wholesale-level subsidy to reduce electricity costs, but rates are still about four times more expensive than in Ontario.

Community Infrastructure

Given the significant infrastructure gaps in affordable housing, clean energy, food production, and broadband access—combined with the territory’s limited fiscal resources—coordinated federal support will be required to make meaningful progress on these various priorities.

The territory must work in concert with Inuit and Indigenous government partners to introduce a comprehensive, long-term infrastructure plan with a set of actionable initiatives and a delivery plan that includes clear timelines. This plan should be centred on a common goal of bringing the state of infrastructure in each of these areas up to the national standard within the next decade not only in Nunavut and but also as part of a coordinated plan across all the Northern territories.

Federal Partnerships

a.       Enhancing the CCB and Nunavut’s territorial child benefit to bring the territory’s exceptionally high child poverty rate down to the national average. This could include piloting a Northern top-up to the CCB that could be deployed more widely across other regions.

b.       Expanding childcare spaces to close infrastructure and workforce gaps and ensure that Nunavut residents benefit from the same access to affordable childcare spaces that residents of the Yukon and NWT do.

c.       Developing a local trades education model that targets residents with a high school education or less. This will help ensure that future critical minerals and defence infrastructure projects are well positioned to succeed while benefitting the local populations.