Proposed NWT budget promises ‘more sustainable future’

Northwest Territories’ 2022-23 budget proposal establishes a ‘more sustainable future’ according to Deputy Finance Minister William MacKay — a stark difference from what finance officials called last year an “unsustainable” budget plan.

“Our fiscal outlook has improved compared to the same period last year, we are well on our way to recovery,” said Caroline Wawzonek, Minister of Finance, during a press briefing on Tuesday. She later told politicians in the Legislative Assembly that the budget was not “flashy,” but its themes were about consistency and patience.

There are no major budget cuts, Wawzonek said. There are also no new taxes, but property rates and some fees will increase due to inflation.

And while the government “watches the data” on who pays taxes on what, Wawzonek said creating a higher tax bracket would bring little benefit to the territory compared to “risks to our competitive position.” given the low population of the area.

Wawzonek said the territorial government plans to spend $2.142 billion in the next fiscal year and generate $2.3 billion in revenue. This leaves an operating surplus of $131 million.

Wawzonek said $67 million of the operating-side surplus came from federal supports and savings in program delivery, and she expects operating surpluses to continue to grow until further notice. in 2025-2026.

“We expect to use these operating surpluses to fund planned capital investments of $1.34 billion by 2025-26,” she said.

“Interior improvements”

“I am optimistic that we can control future spending through internal savings and continue to derive more value from the $2.1 billion we spend without having to cut programs and services,” Wawzonek said in his speech. on the budget.

It’s a theme that Wawzonek has touched on many times – “interior upgrades without new money”.

That won’t be enough to cover necessary infrastructure costs, however, and Wawzonek expects the territory’s debt to continue to grow to $1.7 billion in the next fiscal year.

The cost of COVID-19

The estimated cost of the pandemic is set at $56 million. This includes the estimated revenue impact of $33 million for the territory in the current fiscal year and $23 million projected for the coming year.

Wawzonek said it’s disappointing that the pandemic continues to be an issue the territory will face in the next fiscal year. She hopes it will ‘fade’ to endemic levels and become ‘a disease we can protect against with vaccines, treatments and improved health system capacity’.

She said the planned expenditures in the new budget for the COVID-19 Secretariat will decrease by $6 million to $11.9 million. This is because the program is coming to an end.

There is also $640,000 from the federal government to increase vaccination coverage in the territory.

Economic outlook and recovery

The economy is estimated to have grown by 7.3% from 2020 to 2021, but, with no growth expected in 2022, the territory’s economy is still 4.5% lower than it was in 2019.

And while employment is now above pre-pandemic levels and average incomes in the NWT remain 35% higher than elsewhere in the country, Wawzonek said the recovery has been “uneven from sector to sector.” the other “.

The hardest hit sectors like tourism, hospitality, mining and wholesale “continue to struggle”, she said.

Environment and climate change

The budget promises $4.7 million to the Arctic Energy Alliance to implement programs to reduce carbon emissions.

There is also an additional $1 million to support work with co-management partners on the recovery of the Bathurst and Bluenose East caribou herds. This would support “actions on harvesting, predator and habitat management, protection of caribou habitat, and improved research and monitoring.”

Beyond these investments, Wawzonek said, “there’s a lot more going on trying to find what’s driving GHG emissions. [greenhouse gas] emissions in the territory and what we are doing about it. »

She cited the Taltson Hydro expansion project as an example.

“It has the potential to bring hydroelectric power, cleaner energy to…much of the territory, which of course would change the picture significantly in terms of communities, but if it were to be extended to the Slave geographic region, it would hit on the industries that were in fact the main drivers of our GHG emissions.”

health and wellbeing

Spending on health care and welfare will increase by $23 million in this budget.

Government of the Northwest Territories invests $7.1 million in medical travel and health care reform, and $2.92 million in Northern Wellness Agreement for Health Programs community. There is also $1.7 million for more advice and activities to support community organizations dealing with mental health and addictions.

The territory is also investing $1 million each in territorial cancer programs and expanding a midwifery program.

The budget will now be debated, department by department, over the next few weeks.

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