A plan to review the public service under Premier R.J. Simpson is raising eyebrows with the Union of Northern Workers, but Finance Minister Caroline Wawzonek says there are no plans to cut jobs.
In an interview with NNSL Media this week, Simpson and Wawzonek said the aim was to find around $150 million in operating budget savings and an additional $150 million in the 20th Legislative Assembly’s four-year lifespan to put toward reducing the territory’s debt.
The reason for this, Simpson said, was to shield the GNWT from the costs of future climate disasters, which are all but guaranteed, and other bad surprises such as future pandemics or geopolitical shifts.
“That will help us create a cushion between our budget and our borrowing limit,” he said. “In case there’s another disaster that requires us to expend a significant amount of funds, we’ll actually have those funds available. It’s hard to predict what’s going to happen, but we know enough about our own territory, our own finances and our relationship with Canada that we can create a budget that we think is appropriate for the Northwest Territories.
“As long as our finances are in good shape, we’ll be able to weather whatever storm is coming. The last four years, the government has been very reactive — it had no choice because we had Covid, we had floods and we had fires. Now is our opportunity to be proactive.”
Simpson said the aim was to create a long-term fiscal sustainability model for the current and future GNWTs to follow.
In practice, Wawzonek said the plan was to only use operating budget surpluses for capital plans, so there would be less money for major infrastructure projects available compared to past governments. Short-term debt exposes the GNWT to higher interest rates, which is an area of “significant growth” in costs, she said.
Wawzonek said the majority of the GNWT’s short-term debt is owed to banks. Roughly 80 per cent of the government’s budget is provided by the federal government, to the tune of nearly $2 billion a year. She noted that with the recently announced suspension of the carbon tax on home heating oil, the GNWT was forgoing approximately $4.5 million per year after the Cost of Living Offset subsidy is paid out which it would need to find elsewhere.
One-third of the GNWT’s operating budget is health care costs, added Wawzonek.
Union’s misgivings
In a press release, UNW president Gayla Thunstrom said she was concerned about the use of the term “finding efficiencies” by the GNWT and noted much of the surge in cost of living is from gaps in essential services.
“If the GNWT is going to highlight healthcare costs as one of its greatest fiscal challenges, it needs to get serious about recruitment and retention,” she stated. “Fighting northern-based healthcare workers over pennies on the dollar while shelling out money hand over fist for southern contract workers is not a cost-effective solution to our healthcare crisis.
“The efficient delivery of government programs services requires adequate capacity and resourcing.”
Wawzonek noted the government renewal program has been underway for some time and she was “thrilled” to be able to pick it back up.
She said she had received a lot of feedback asking when people would see results of the initiative and added those changes were now possible.
“This is where we get to actually make good, having done a full inventory of every single program and service across government, including in health, and starting to do some evaluations of those programs, which is not a culture we had before,” she said. “So we can now actually go in and look at some of the programs.
“I’ll use health as an example, because at the same time we’ve also been doing a health sustainability examination, looking at what is driving the cost of health in the Northwest Territories. So now we can stop and say ‘Are there things that are duplicated? Are there programs being offered in a way that is not achieving good value for our dollar? Are there better ways to offer those programs and still give essential services to residents?’ That’s the realignment — what are we trying to achieve?”
Acknowledging that the North was in a major labour shortage, Wawzonek said she wanted to hear from departments how things could be operated better. She noted there was potential room for more digital service delivery, particularly for follow-up appointments instead of requiring residents to travel to major centres for appointments.
To this end, she said GNWT has opened an anonymous tip line for workers to provide feedback to how their department operates.
“I don’t have an answer for how we’re going to fix it, but what I want to acknowledge that it’s ripe for fixing,” she said. “So this is an opportunity within this strategy to push all our departments to say what can we do to make service better.
“Front line workers have anecdotally brought ideas to me over the years. I have been really struck by the response to that and I think that’s going to find a lot of a great ways we can bring our organization back to fiscal health.”
However, Thunstrom questioned the value of a tip line, suggesting the practice would pit public service workers against one another for funding, which she stated would create a toxic workplace culture.
She cautioned public service workers are already being pushed to the limit and further pressure would likely cause more talent to move south to explore better opportunities.
Thunstrom pointed out the largest growth in public sector employment was in upper management, pointing to the GNWT Public Service Annual Report 2022-2023, which shows senior management positions grew by eight per cent between March 2022 and March 2023, compared to a one per cent increase in teacher positions. Employment of members of the NWT Teacher’s Association grew from 538 to 545 in that time, while senior management positions expanded from 231 to 250.
In other words, it appears the GNWT hired more than twice as many senior managers to teachers in the course of a year.
“Senior management positions saw the largest growth in our public service over the past year - how much duplication or redundancy is happening at the top? Has the GNWT become too top heavy?” she asked. “Will senior management within each department be evaluating themselves against their program staff? Will the protection of higher-level administrative positions come at the cost of program and service-level employees?”
Make cuts in management: union
Thunstrom suggested that if the GNWT is looking to find efficiencies, it should be doing so from the top down and looking to cut costs of management. She also stated the GNWT could save money on legal fees if it stopped fighting its employees over “withheld rights and benefits that workers are entitled to under their collective agreements and HR policies.”
She added the GNWT should be expanding health care spending to make the public health sector an employer of choice to retain staff and review existing programs to determine if they’re achieving their stated goals.
Simpson said his priority was making sure the core elements of service delivery were being met before expanding the scope of the GNWT’s role in the North.
”I really want to ensure that we shore up our basic health care services,” he said. “We have a lot of different programs in health care, it’s great to have all these programs but we also need to make sure people have access to a doctor.
“So we’re ensuring we’re directing those core needs before we expand the services that we offer.”
Wawzonek said the fiscal renewal strategy would not affect the current collective bargaining negotiations between the GNWT and public service workers, which are still underway.
With the legislative assembly discussing its priorities this week, Wawzonek said she was open to all suggestions, though stopped short when asked if a reduction in MLA compensation was also on the table.
”The starting point is looking at the data we have and making evidence and data driven decisions,” she said. “The renewal strategy is not targeting one department or service, it’s something we sent back to all departments collectively as a whole government, asking where can we go to find this funding to pay down debt and make sure our capital budget stays fully funded.
“There may be service changes, but as the Premier said, we want to make sure our core services are well-funded and funded appropriately. Cutting jobs and losing public service is not a situation we want to find ourselves in. At the same time, we’ve seen significant public service growth over the last few years. Slowing that growth down and making sure we are utilizing the folks that we have in the best way that we can to all of their skill sets, that’s certainly something we want to be looking at.”
Fact file
Government employment and NWT population
2022-23
6,481 employees
UNW members - 4,998
Teachers - 545
Excluded from union - 670
Senior managers - 250
Salary and benefits costs - $919 million
NWT population - 44,515
2021-22
6,376 employees
UNW members - 4,921
Teachers - 539
Excluded from union - 662
Senior managers - 231
Salary and benefits costs - $870 million
NWT population - 44,791
2020-21
6,252 employees
UNW members - 4,810
Teachers - 545
Excluded from union - 643
Senior managers - 235
Salary and benefits cost - $812.5 million
NWT population - 44,579
2014
5,141 employees
Salary and benefits costs - $649 million
NWT population - 43,851
Sources: GNWT public service annual reports and NWT Bureau of Statistics