Released Tuesday, the first budget from the new premier and cabinet of the NWT favoured infrastructure spending over program investment.
It promises a roughly $203 million surplus to be spent on infrastructure projects, no new taxes, and no substantial funding increases to areas in crisis.
Finance Minister Caroline Wawzonek’s first budget projects collecting $2.186 billion in revenue in fiscal 2020-21, $333 million more than 2019-2020, with more than half of that increase coming from a bump in federal infrastructure grants. It projects expenditures totaling $1.93 billion.
Wawzonek advised the budget wouldn’t be the last word on GNWT finances in 2020-21.
“What we can do walking in (to the GNWT’s fiscal situation in) January isn’t the whole picture or whole story of what this government’s going to do,” she said. “While there is a surplus, the surplus is what allows us to invest strategically into infrastructure projects.”
No spending increases on areas in need
Three areas identified as in crisis by the GNWT – housing, education, and child and family services – will not receive any major funding increases.
Wawzonek explained this was the level of funding the respective departments said was required to maintain their current services, and didn’t necessarily reflect new mandate initiatives that could come forward from MLAs.
She also said this budget took pains to avoid cuts.
“This is not about austerity,” she said, warning that future budgets are unlikely to see surpluses of this size. “If we don’t stop and make sure we get this right, and invest appropriately – and more importantly we’re looking at our programs, evaluating our programs, and really asking departments to be collaborative – in four years from now we’re going to be having a very different conversation.”
There is a pot of $25 million set aside for items identified in the assembly’s recently released mandate document. That list includes priorities ranging from 100 new units of housing, to a reduction in the number of alcohol-related hospitalizations and action on climate change.
Asked if this was enough money to meet the assembly’s aims, she said there would always be room for more resources.
“Anyone in government’s going to sit here and say, we’d always like to have more money. It’s what you do with it,” she said. “There’s a lot you can do with $25 million over a population the size of the Northwest Territories.”
She said increased collaboration between departments and stronger measures of success could better leverage current funds.
Request to raise NWT’s debt limit
Wawzonek expressed the intention to ask the federal government to raise the territory’s debt limit for the first time since 2015. It currently sits at $1.3 billion.
In Ottawa last week, NWT MP Michael McLeod asked federal finance minister Bill Morneau to look at the territory’s debt limit.
Morneau said it was an area of “significant interest” that would be considered seriously, adding there would be more to say in the near future.
The GNWT’s debt limit plan relies on a confident credit rating from Moody’s, meaning the GNWT has a low risk of defaulting on its debt payments. Without an increase, it will likely hit the current debt limit in coming years.
No new taxes
The territorial government also claims there will be no new taxes, while changes to measures like property mill rates and a planned increase to the carbon tax will still apply. The latter will rise to $30 per tonne this year, or about 2.3 cents on a litre of gas and 2.7 cents on a litre of diesel.
That will be balanced with rebates including $156 per person cost of living offset per person and a child credit of $180 per.
The new budget similarly proposes roughly $11 million in funding for that offset, in addition to covering heating rebates, large emitters’ rebates and grants and other rebates for electricity producers.
Despite the last government’s concerns over the carbon tax, Wawzonek said there were no plans to scrap the federal program.
Ultimately, as the first budget after a wave of new MLAs and promises of change, Wawzonek argued it still represented the purported spirit of the new government.
“Do I think it responds to the call for change, the need for change, and the importance of really looking at our future as a territory? I do,” she said.
More news to come in the spring, says regular MLA
“It’s a pretty status quo budget,” Inuvik Twin Lakes MLA Lesa Semmler said of Tuesday’s budget.
Hopefully, she said, the May sitting of Assembly may see more action on areas like health, housing and child and family services.
“That will be more of an exciting sitting, I hope,” she said. “Right now, our minister of finance is just trying to get the big picture … not trying to go too far ahead before we know where we’re going.”