This letter was submitted on behalf of the NWT Chamber of Commerce
Last week the NWT Chamber of Commerce, with supporting signatures from the Yellowknife, Thebacha and Fort Simpson Chambers of Commerce, issued a letter to Premier Cochrane outlining our concerns about the newly created Covid-19 Secretariat.
Monday’s News/North editorial indicated that the hiring of 150 new GNWT employees is a reasonable form of economic stimulus in light of the current state of the NWT economy. The editorial also stated; “the thing about being in unprecedented times is that you can’t expect things to go the same way.”
What the editorial seems to miss is that in the midst of unprecedented times the GNWT is doing things in precisely the same way they have for years; bloat the bureaucracy and hope for the best.
We feel that any major new GNWT spend should be viewed through the lens of economic return.
The 19th Legislative Assembly’s mandate was chock-full of items that would provide the NWT a return on their investment either through the support of projects that provide long term economic benefit or programs that reduce territorial operating costs into the future.
Many of the 19th Assembly’s mandate items have long-term value as they would stimulate the private sector through job creation in all communities. Businesses would then be paying payroll taxes, WSCC premiums, and small business taxes. In addition, businesses will be spending money in each community on operating costs such as accommodations, food, fuel, materials, utilities, etc. Every dollar spent at a local business is turned over in that community seven times; thus, if the GNWT chose to spend $62.6m on the private sector by initiating any one of their mandate items, it would result in $438.2m in economic value.
A prime example of a mandate that creates value over the long term:
“Make strategic infrastructure investments that connect communities, expand the economy, or reduce the cost of living, including the Mackenzie Valley Highway, the Slave Geological Province Corridor, and the Taltson Hydro Project.”
$62.6m would get all of these projects shovel ready and, if appropriately tendered, would create long term, local jobs. The Mackenzie Valley Highway alone would create “7,785 one-time jobs; 78 long term jobs; and 128 long term maintenance jobs just in the NT.”
When you compare value for dollar spent on creating a new level bureaucracy vs. supporting projects designed to build infrastructure and capacity, it becomes apparent how much further $62.6 million would go when invested in our communities. Our revenues would grow, and most importantly, job creation outside of Yellowknife would grow expeditiously, creating a more prosperous NWT for all.
Ultimately, in a few years, we will look back and either curse the short-sightedness of the 19th Assembly or we will applaud the decisions that were made that positioned our territory for success for years to come.
It is interesting to see the Chambers concern when since 2014 they did not support the licensing or regulation of accmmodation providers in Yellowknife. They did not have concerned about persons operating small unlicensed business. In many cases these individuals did not register for GST, pay federal tax, who did no pay taxes on money received, did not pay WSCC and NWT payroll tax. In a letter to me they stated they thought it was good for the economy. Now in Yellowknife we have more rooms advertised on line then we have hotel rooms and only about two dozen of the owners of these rooms are licensed. Maybe now they see what i was trying to tell them. The money lost from these venues have cost registered licensed business a lot and our city is still struggling with getting it under control. Had this been dealt with we would have a lot more money in government coffers and the city would have been able to collect tourisum tax they wanted so badly. In 2017 in an article from HAC ( Hotel Association of Canada) they stated from one advertising platform alone for Air B&B that In 2016, guests of Canada’s legitimate hotel properties contributed an estimated $2.2 billion in consumer taxes and fees based on room revenues alone. If the same rates were to be applied to Airbnb’s revenues, the sector has the potential to contribute almost $100 million to the Canadian economy. Since then the number of these Air B&B in YK are more rooms then there are hotel rooms available in the city. Talk about a loss! Air B&B is only one advertising platform that offers services to advertise. They will advertise one who regardless if they are licensed or not! Its unfair to all of us especially those who are honestly investing in the city, our territory and Canada by doing the right thing. At least if they want to advertise the government has to start enforcing the false advertising law requirement, that would require them to at least be honest with those they serve by stating that they are unlicensed and un regulated.