A dollar spent in Ottawa goes a lot further than a dollar spent in Arctic Bay. Generally speaking, a person living in Nunavut would need to spend $175 to purchase the same goods and services that a person would spend $100 on in southern Canada. This is the difference in the cost of living between Nunavut and the south. Because the Government of Nunavut evaluates its jobs using a national standard, people working for the Government of Nunavut in Ottawa earn the same wages for the same job as people working in Nunavut. It costs more to live in Nunavut and thus the Government of Nunavut must provide a payment that offsets these higher costs for its employees so their wages have as much purchasing power as the wages earned elsewhere. This payment is called a cost of living or equalization payment.
Report