The Northwest Territories provincial flag flies on a flagpole in Ottawa on Monday July 6, 2020. The Northwest Territories government is to release its new budget Wednesday, the last before the territorial election set for the fall. THE CANADIAN PRESS/Adrian Wyld
YELLOWKNIFE – The Northwest Territories government released its new budget Wednesday, the last before the territorial election set for the fall.
Finance Minister Caroline Wawzonek said the plan aims to maintain the stability of the territory’s economy during times of “volatility and uncertainty” without reducing services and programs.
“I am confident that we are leaving the next assembly with a fiscally sustainable foundation on which to build,” she said.
The proposed $2.2-billion budget forecasts the territory will have an operating surplus of nearly $178 million. It projects revenue to increase by 2.9 per cent, largely due to an increase in federal transfers, while spending will increase by $187 million or 7.3 per cent compared to the previous budget.
Wawzonek said initiatives to address the rising cost of living in the North include increasing student financial assistance, improved income assistance for seniors and people with disabilities, and support for non-government organizations.
“Students, seniors, the non-profit sector, these are areas where we can have a real impact and hopefully help mitigate the impacts of inflation,” she said.
Increased spending in the budget is to include $82 million for mandate priorities and enhancements to existing programs, as well as $62 million to cover the costs of flooding in 2022. Thousands of residents in Hay River and the nearby K’atl’odeeche First Nation reserve were ordered to evacuate their homes due to the worst flooding on record in May.
Other budget highlights include $10.9 million for the transition from the pandemic to endemic stage of COVID-19, $10.1 million to help recruit and retain front-line health-care workers, $10.3 million for the territory’s $10-a-day child-care agreement with the federal government, $8.3 million to help offset the effects of the increased carbon tax, and $4 million for core Northwest Territories Housing Corporation programs.
The budget also proposes $833,000 for community governments and $89,000 for the Deline Goti’ne Government to reach the territory’s goal of reducing its municipal funding gap by $5 million between 2019 and 2023.
The N.W.T. government is not proposing any new taxes, but property taxes are expected to increase due to inflation. The territory also plans to change its carbon tax system to align with new federal requirements.
The federal government announced in August 2021 it would increase the carbon price by $15 per tonne of carbon dioxide equivalent emissions annually, starting at $65 a tonne beginning in April and rising to $170 a tonne by 2030. It is also prohibiting rebates that directly offset the carbon tax. In response, the N.W.T. plans to adjust its carbon tax rates, replace its heating fuel rebate by increasing its cost of living offset, and replace a carbon tax rebate for large emitters with a rebate tied to a facility-specific baseline.
Some legislature members have expressed concern with the plan as heating costs are high in the North, especially in the Arctic, and many communities are reliant on diesel.
Wawzonek said if the proposed changes aren’t passed by the legislature, the federal government will determine how to return revenue to the N.W.T.
The territory projects borrowing will increase by 4.5 per cent, bringing its total debt to about $1.5 billion, which it said is well below the federally imposed limit of $1.8 billion.
When the previous budget was tabled a year ago, the territory expected its total debt to increase to more than $1.6 billion by the end of the fiscal year. In October, however, the territory revised its capital estimates, or the amount of money it expected to spend on infrastructure, to better reflect the territory’s capacity to complete projects, reducing spending from more than $500 million to a cap of $260 million.
The territory’s 2022-2023 $2.1-billion budget saw a 2.3 per cent increase in spending compared to 2021-2022.
Wawzonek touted that budget as a sustainable plan, promising to not cut programming or add new taxes while limiting new spending.
While the budget was passed in April 2022, several legislature members opposed the plan, criticizing limited spending on communities outside of Yellowknife.
Wawzonek said at a news conference Wednesday that she suspects there may be similar criticisms of the new budget.
She said, however, that she believes the budget can respond to those concerns, adding she has had discussions with legislature members about what they wanted to see in it.
“I think we as a collective 19 are getting a little better at doing that,” she said.
“I actually think this is maybe going to be the best year for the consensus-style approach to passing a budget.”
This report by The Canadian Press was first published Feb. 8, 2023.
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This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.
