Awaiting the NWT’s budget, a city hopes for a windfall

The Government of the Northwest Territories will reveal its budget for 2019-20 on Wednesday.

Robert C McLeod, the territory’s finance minister, is expected to deliver the budget on Wednesday afternoon, a day after MLAs reconvene for their February sitting at the legislature.

While preparing the budget, in September, Department of Finance officials said they expected “good news on the revenues side” through a slight increase to some federal transfers and the stabilization of corporate tax, where the NWT took a one-off hit last year.

David Stewart, the deputy minister of finance, forecast in September “a reasonably positive year” for the territory’s bottom line, coming off two years of self-imposed austerity measures designed to trim expenditure as revenues – such as those from the mining sector – dropped.

The budget will be announced to the backdrop of a protracted dispute with the Union of Northern Workers over the pay and working conditions of 4,000 territorial government employees. Mediation between the the territory and the Union of Northern Workers resumes next week, with the union calling a rare news conference for Tuesday – a day before the budget is delivered.

However, the territory’s budget also affects the spending power of the NWT’s municipalities.

Since a 2014 report documented some $40 million in under-funding for the 33 municipal governments, the territory’s Department of Municipal and Community Affairs – or MACA – has been under pressure to make up some of that shortfall.

MACA has acknowledged the $40 million figure, which came from a report in part funded by MACA itself, but municipalities claim the deficit has changed little in the past four years.

“The City of Yellowknife is underfunded by $11.4 million annually,” the NWT’s largest municipality stated in a document for residents prepared ahead of its own 2019 budget deliberations.

“MACA is a key partner and has recently made minor adjustments to the core funding to reflect annual increases in wages and other costs,” the City’s document stated. “However, these did not address the bulk of the underfunding.”

‘Watching for that’

Speaking to Cabin Radio on Monday, Mayor Rebecca Alty of Yellowknife called MACA funding “the big one for us.”

“Clearly, we’re not expecting to see $40 million be added to the budget,” said Alty, “but what we would like to see is an increase, year-on-year, to start closing that gap.

“The minister of MACA [Alfred Moses] has committed to putting a plan in place and that’s supposed to be launched – but we would like to see the plan plus some extra funding, not ‘the money will be coming in five to 10 years’.”

Alty said recent, small increases to the pool of MACA funding available for communities – and an increase in the territory’s contribution toward Yellowknife’s water and sewer costs – were “something, but it’s still not quite closing that $11 million gap.”

“So the City is going to be watching out for that,” she concluded.

No ‘bouncing back’

What, exactly, is contained within the territory’s budget – regarding MACA or any other department – is kept a closely guarded secret until McLeod, the finance minister, makes his speech in the legislature.

Reporters are provided with copies of budget documents several hours ahead of that speech, and can ask questions of department officials in order to better understand the materials, but in return are asked not to publish any details until McLeod begins speaking on Wednesday afternoon.

In September, providing an overview of some factors playing into this year’s budget, the Department of Finance did outline some broad areas of interest.

For example, the NWT must now begin paying $18 million to private contractors, annually, for maintenance of its new Stanton Hospital building.

The territory said in September it expected investments in youth, the economy, the environment, energy projects, and community governments.

Carbon tax is to be implemented in the NWT in July and is expected to appear in the budget as a result, though finance officials said the tax should be “largely revenue neutral.”

Cannabis revenues should also form a line item in the budget.

Despite optimism about overall revenues in the short term, it is unlikely that the territory will significantly loosen its purse-strings.

“The more medium trend suggests we are not going to be … bouncing back to where we were, by all indications,” Stewart told MLAs in September.