Maca scales back some changes to NWT community funding

The NWT government appears to have dialled back some of shifts it had been planning to the way communities receive funding from the Department of Municipal and Community Affairs.

The changes have been in the works for more than a decade, based on concern that the existing formula dividing up funding among 32 community governments was inadequate.

Draft proposals had worried some smaller communities that stood to lose hundreds of thousands of dollars in territorial funding. Maca argued those communities had been historically overfunded while others were not receiving their fair share.

By January, minister responsible Vince McKay had conceded that the proposals appeared to have “too big an impact” for some communities to stomach.

Although there was broad consensus that the formula dividing up more than $100 million in annual Maca funding needs to change, McKay said his department was taking concerns into consideration and drawing up a new plan.

In the legislature on Friday – while the NWT Association of Communities held its annual meeting across the street – McKay said Maca will now take a gentler approach.

Funding from Maca to communities arrives in different buckets: broadly speaking, there is one for water and waste, one for operations and maintenance and one for infrastructure.

McKay said on Friday that operations and maintenance funding levels “will remain unchanged for the next three years” to allow a smoother transition than the one that had been planned.

There is one exception to that: communities “funded more than 100 percent will be reduced to 100 percent,” he said. There was no list immediately available to show which communities would be affected by that.

McKay said pausing some of the changes to operations and maintenance funding would give “local governments time to assess priorities and adjust accordingly.”

Changes to the other two buckets will be phased in over the next three years rather than happen all at once on April 1.

“This will begin injecting much-needed capital dollars and funding to support core services,” said McKay. (Importantly, no new funding is involved. The funding formula and policies being discussed simply change how the existing pot of money is distributed.)

McKay said Maca would also make changes to try to address concerns communities had expressed about possible upheaval to how local staff housing is funded.

A plan to change how water and sewer rates are calculated – one that some communities said was unworkable in practice – will be paused for “further analysis.”

Some communities ‘in Catch-22’

At Friday’s NWT Association of Communities annual meeting inside Yellowknife’s Chateau Nova Hotel, some senior community officials were still digesting the changes.

Maca had been hurrying to formalize a new approach that accounts for community concerns before its stated deadline of April 1 to begin implementing changes.

Tom Beaulieu is the Maca-appointed administrator of Fort Resolution.

Beaulieu said Fort Resolution is a mid-sized community that won’t see as much of a change as larger and smaller communities.

Small communities are “in a Catch-22,” Beaulieu said.

“In the small communities, even though their budgets were reduced, one of the main reasons is because they’re not spending their money. But they can’t spend their money because it’s difficult to compete for contractors. The medium-sized and larger communities have bigger projects – they’re more attractive to contractors,” said Beaulieu.

Unless a better way is developed for communities to access that kind of labour, Beaulieu said, smaller governments will always find it difficult to compete.

“These updates are the result of extensive engagement over many years,” McKay told the legislature.

“I heard from leaders who are worried about funding reductions, particularly in smaller communities with less financial flexibility.

“At the same time, I have also heard from community governments that have been underfunded for years and see this as a long-overdue correction.”

Claire McFarlane contributed reporting.