Hay River’s 10-year plan is ‘underfunded by $88 million’

“The costs are going up and up and up. We need more funding to move forward with these core assets. It’s getting more evident and, I think, desperate.”

Hay River’s senior administrator, Glenn Smith, says a 10-year capital plan – the things the town wants to build in the decade ahead – is beset by huge funding gaps the town must bridge to push projects forward.

At a council meeting earlier this month, Smith said various projects within the plan, which is revised annually, are underfunded. Making up the difference would mean finding approximately an extra $9 million a year.

“Council faces a significant challenge in securing those dollars to move forward,” Smith told councillors.

“Even with any community growth, taxation, general fees, you’re not going to move the needle enough through those increases to address the gap through the 10-year horizon.”

Nineteen of the projects listed in the plan are related to flood and wildfire recovery or mitigation, Smith said.

Other major projects lacking cash include a new water treatment plant, which the town says is underfunded by $20 million, and the Sundog residential and commercial land development project, originally supposed to be complete by 2026 but now said to be underfunded by $17.7 million.

The plan to build a new town hall is missing $7.3 million, the town says, while work on the dump needs an extra $3.8 million and golf course work is short $3.3 million.

Smith said more and more funding is available for green projects that mitigate the impacts of climate change, but key needs like water, sewer, and landfill work “have been difficult for past councils to address.”

“Territorial and federal contributions must increase in the immediate future,” he said.

“It is paramount that council continues to lobby those governments and we’re diligent in finding any funding that is available to support these projects.”

New minister, old funding gap

For years, municipalities have maintained – and, to an extent, the NWT government has agreed – that they don’t receive an appropriate level of funding for the things they need to get done.

Municipalities also have to produce balanced budgets by law, meaning they can’t operate at a loss to achieve larger projects. They have to explain where the money is coming from.

The Department of Municipal and Community Affairs’ new minister, Vince McKay, should be a sympathetic ear for communities worried about how they’re going to pay their bills and complete projects.

During the recent territorial election campaign, McKay – who won the Hay River South district, defeating two former MLAs – told Cabin Radio closing the funding gap would be a priority. Now, he’s in charge of the department responsible.

“When you can point out and prove to the territorial government the shortfalls that Hay River has been getting for years, and nothing’s been changed, then there’s a problem there,” McKay, a former Hay River town councillor, said in October.

“We sat down with Municipal and Community Affairs years ago as town council and showed them their formula funding errors, and nothing’s ever been changed.

“I’ve most recently seen numerous organizations lose funding in Hay River and I’d like to work on finding a better solution to get the money back out to the communities, including Hay River.”

Hay River says it needs it. Smith’s plan is for the town to try to find at least 30 percent of the missing $88 million, on the basis that federal funding often comes with a 70-30 split or similar – the municipality pays 30 percent and the federal government covers the rest.

If you can show Ottawa you have your 30 percent ready to go, that may help your project get the green light.

But even finding the 30 percent (which would be $26.4 million) will be a “significant challenge and milestone” for council, he said.

Either the town needs to find millions of dollars in additional annual revenue, or it needs “more contributions from the GNWT and Maca to address funding gaps,” said Smith.

During the same meeting, Mayor Kandis Jameson said the town’s multiple evacuations had not helped by creating a backlog of tasks.

“There is stuff that needs to be completed in 2024 that should have been completed in 2023,” she said.

All told, last year’s flood caused damage cost Hay River and its residents at least $174 million, not counting costs covered by private insurance. The full cost of this year’s two wildfires isn’t yet apparent, but it’s expected to run to tens of millions of dollars.

As early as September, with the town still evacuated, Jameson said existing GNWT programs wouldn’t be enough to support the town through years of natural disasters.

Ollie Williams contributed reporting.