The Trust Fund

What is a Trust?

A trust is a legal device that holds assets (including money) to be used in the manner defined in the trust deed of the trust for the benefit of a particular person or groups of people. Nunavut Trust holds the compensation funds received from the Government of Canada as part of the Nunavut Land Claim Agreement (NLCA), and invests it in accordance with the mandate defined in the Nunavut Trust Deed on behalf of the Inuit of Nunavut.

What is the Mandate of Nunavut Trust?

The 1993 Nunavut Land Claim Agreement between the Inuit of Nunavut and the Government of Canada gave Inuit in Nunavut ownership of 350,000 square kilometres, and equal representation of Inuit with government on a new set of wildlife management, resource management and environmental boards.

A key element of the Claim was federal payments of $1.1 billion, payable to the Trust over a fifteen-year period ending in 2007. These funds were to be placed in a trust, so that only the income generated would be used to finance the beneficiary organizations that look after the interests of the Inuit of Nunavut.

Article 31 of the Nunavut Land Claim Agreement mandates Nunavut Trust to receive Inuit compensation monies and to invest them wisely. The Trust Deed requires the Trustees to attempt to make enough income to allow the beneficiary organizations to meet their responsibilities while preserving the buying power of the capital to ensure future generations of Inuit will also benefit.

What is the Investment Strategy of Nunavut Trust?

Some people choose to leave their money in the bank and collect a small amount of interest at minimal risk. That approach, however, would not provide enough income to meet the current and future needs of Nunavut Inuit.

To increase the income being generated by Inuit compensation monies beyond what banks would provide, Nunavut Trust follows a careful investment strategy that tries to minimise risk while creating opportunities to produce significant gains. With the assistance of expert financial investment advisors working under the direction of the Trustees, funds are invested in a careful mix of fixed income securities (bonds, short term investments and cash) as well as Canadian and foreign stocks.

Increased income also means higher risk. Consequently, we hire a number of investment managers each having a different investment style and mandate. As a result, if one particular style or mandate is not profitable at a point in time, chances are one of the other styles or mandates will be more rewarding. The money is not locked in for long terms. Our investments are publicly traded, so they're easily bought or sold. The mix of investments is designed to produce income to fund beneficiary organizations, and to protect the capital for the future.

By investing for the long term, the Trust can ensure that short-term market declines will not slow the overall growth of its investments over the long term. This strategy reflects lessons Inuit have learned and followed for many generations: take only what you need to survive and leave the rest to provide food for another day.

What is done with Nunavut Trust earnings?

Our Trust Deed says all of our income, as determined by the Income Tax Act, must be distributed to beneficiaries. Our earnings fund the operations of Nunavut Tunngavik Incorporated (NTI), the organization created to implement Inuit responsibilities under the Land Claims agreement. NTI, in turn, provides funding to support the activities of three Regional Inuit Associations and other programs and Inuit organizations.

The Trust income also funds the Nunavut Economic and Social Development Trust Inc. This beneficiary uses money it receives to invest in Aturqtuarvik Corporation, a “for profit” company created by NTI to provide investment capital for Inuit-owned businesses.

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