NWT’s new budget aims to use existing resources for priorities

The NWT’s finance minister says the territory’s 2025-26 budget focuses on “using the resources that we have for change” during a time of uncertainty.

“It is difficult to predict what the next challenges will be, other than to say that assuming there will be something unpredictable happening is probably the most stable prediction,” Caroline Wawzonek told reporters.

“We want to make sure we can support residents through whatever might come up.”

The NWT government’s proposed operating budget for the 2025-26 fiscal year, released on Thursday, projects $2.5 billion in spending and $2.7 billion in revenue. That leaves an operating surplus of $170 million after adjustments.

The surplus does not mean the NWT government gets to save that money. In practice, the surplus is used to pay for infrastructure or pay down debt.

Wawzonek said last year’s budget was “not a ribbon-cutting budget.” Asked to give this year’s budget a tagline, she responded: “It’s stability for today and tomorrow.”

The finance minister explained there are “not a lot of dramatic additions” to the budget while the government continues work toward its goals.

“We want our public service to know that we’re going to be predictable, we want residents to know that we’re going to keep things stable,” she said.

“We also, at the same time, have a mandate that we need to deliver upon with priorities that reflect future hopes and future dreams of the territory, and we need to complete them. But we’re going to have to do that from within the resources we have.”

Where is the GNWT on fiscal sustainability?

At the start of the 20th Legislative Assembly, the premier and finance minister released a fiscal responsibility strategy to address the territory’s economic challenges.

The strategy set a goal for the NWT government to find $150 million a year in extra cash through a combination of increased revenues and reduced spending.

Other targets in the strategy include repaying $150 million in short-term debt by the end of the assembly, remaining $120 million below the federally imposed borrowing limit and fully funding capital spending through operating surpluses.

The 2024-25 budget failed to reach many of those goals, except using the surplus to cover the capital budget.

While last year’s operating budget initially planned $48.4 million in cuts, the finance minister reinstated more than $13 million in spending before the budget was passed following pushback from regular MLAs, the union and some members of the public.

On Thursday, finance officials said the territory has since faced additional costs related to low water levels, repairs to the Deh Cho Bridge, fire suppression, collective bargaining, and demand for health services.

Overall, since the 2024-25 budget was released, the NWT government’s expenses have increased $197 million, revenues were $27 million less than budgeted, and debt grew by $125 million.

In his territorial address on Tuesday, Premier RJ Simpson said while the territory hasn’t met its “ultimate target,” it has “maintained financial discipline.”

“The reductions we implemented have left us in a much stronger position than we would otherwise be in,” he asserted. “Had we not taken these measures, we wouldn’t be taking about a fiscal situation, we’d be talking about a fiscal crisis.”

Progress on targets in 2025-26

This year’s budget is also expected to meet few of the fiscal responsibility strategy’s annual goals beyond using the projected surplus to fund some of the $339-million capital budget, which was passed in November 2024.

While overall department spending is expected to increase, the budget plans $9.1 million in reductions and a little more than $1 million in revenue increases. Between last year’s budget and this one, the NWT government expects to have found $106 million from spending cuts and revenue increases.

“This strategy was never meant to prevent prompt responses during extraordinary challenges or demand cuts for the sake of achieving a reduction target,” Wawzonek said in her budget address.

“Restoring balance is part of the shifting culture of how we deliver programs and services to ensure that we maximize the value from the budget available.”

The 2025-26 budget proposes an overall $145-million increase in department spending compared to last year’s budget, which will be partially offset by $27 million in federal funding. The territory said much of that new spending, or $108 million, is the result of changes to compensation and benefits related to collective bargaining.

Areas where cuts are proposed include:

• $2.7 million from closing the men’s unit of the Fort Smith Correctional Complex, which the Union of Northern Workers has already criticized;
• $990,000 from cutting training to community governments, which finance officials said was undersubscribed;
• $418,000 from reducing the Yellowknife midwifery expansion budget; and
• $150,000 from ending contracts related to advocacy in front of telecoms regulator the CRTC on northern issues. (Earlier this year, the CRTC announced a northern subsidy to offset the cost of internet services.)

The budget projects an additional $800,000 in revenue from increasing Housing NWT market rental rates, which finance officials said have not risen since 2012.

The territory’s total debt is forecast to reach $1.77 billion by the end of the fiscal year, $28 million below the federal cap of $1.8 billion.

The NWT government is still awaiting a response from Canada on its request to increase that borrowing limit. Wawzonek said she expects the increase will be approved, which will give the territory “the flexibility to respond to any future unforeseen fiscal pressures.”

Bill MacKay, the territory’s deputy minister of finance, said the territory is “doing well in terms of our affordability” compared to other jurisdictions in Canada. He said debt servicing payments are projected to be two percent or less of revenues and the NWT still has a good credit rating.

Where is the NWT government spending?

In her budget address, Wawzonek highlighted key areas where the government plans to spend money.

Spending proposed in the budget includes:

Health

• $28.2 million for frontline health support;
• $19.3 million to increase healthcare administration capacity;
• $11.6 million for healthcare delivery improvements;
• $7.4 million to support medical travel assistance for GNWT employees and their families;

Housing

• $3.7 million for a strategic approach to homelessness in Yellowknife;
• $2.9 million for the public housing program;
• $809,000 for the transitional housing addictions recovery program;

Justice

• $499,000 to enhance support for the Indigenous Justice Program;
• $372,000 to add two constable positions to the RCMP’s emergency response team;
• $40,000 for legal and emergency protection order safety planning advice and options to survivors of sexual assault and intimate partner violence.

Education

• $10.5 million for early learning and child care;

Economy and infrastructure

• $12 million to mitigate the potential impacts of a general electrical rate increase;
• $6.3 million to support communities with increased operations funding;
• $4.2 million to enhance basic funding for utilities and winter road costs;
• $4.2 million for resource development and economic diversification;
• $4 million for the Small Community Employment Program;
• $2.9 million to mitigate natural disaster risks;
• $1.1 million to extend the Mackenzie Valley Fibre Link to the Arctic coast by connecting Tuktoyaktuk;
• $100,000 for Tourism 2025; and
• $54,000 to complete implementation of the Mineral Resources Act.