NWT, ‘expecting a lot’ in 2026, unveils budget for the year ahead

In her budget address on Thursday, the NWT’s finance minister spoke at length about the changing global landscape and growing interest in Arctic security.

“The strategic, geopolitical role of the North cannot be overstated,” Caroline Wawzonek told the Legislative Assembly. “To be a circumpolar nation, Canada must invest in the North: in foundational, enabling infrastructure, in defence capabilities and dual use capacities, and in the people.”

“A strong Northwest Territories builds a stronger Canada,” she added.

Wawzonek tabled the territorial government’s proposed 2026-27 operating budget, which projects revenue of $2.74 billion – up 3.2 percent from the previous budget – and $2.39 billion in spending, an increase of 0.9 percent, with $326 million in adjustments like infrastructure contributions and deferred maintenance.

Wawzonek said while the NWT faces economic pressures, now is a time of opportunity with the spotlight on the North.

She said with the proposed budget, the territory aims to “meet the moment” and develop the capacity and partnerships needed to accelerate major projects.

“The momentum is in swing. The partnerships are forming. The opportunities are knocking,” she said.

Major projects the territory is pursuing include the proposed Arctic Economic and Security Corridor, Mackenzie Valley Highway and Taltson hydro expansion.

Wawzonek told reporters the federal government has expressed interest in all three and she is “expecting a lot” in the coming year.

“I do think 2026 is going to be a big year, and frankly has to be a big year,” she said.

Lower projected surplus

There were not many surprises in the budget, which does not drastically differ from the previous budget passed by MLAs in 2025.

William MacKay, deputy minister of finance, described it as “a fiscally responsible budget that uses debt wisely” while “making key investments” in priority areas.

One change is that the territory’s operating surplus is projected to be much lower than in previous budgets, at $20.1 million.

The NWT government uses the surplus to help fund infrastructure projects. MLAs passed a $436-million capital budget in November 2025.

MacKay explained the 2026-27 operating budget proposes a lower surplus as the territory plans to increase its supplementary reserve to $210 million. That fund is intended to help the NWT pay for unexpected or emergency expenses.

“This higher value better reflects the trend of the last several years of emergencies, cost pressures and emerging needs,” Wawzonek said.

The 2025-26 budget, for example, had initially projected an operating surplus of $170 million, which dropped to $16 million by October 2025 and now sits at $9 million.

Wawzonek has attributed that decrease to unexpected costs for wildfires, the loss of some federal Jordan’s Principle funding, fish plant operations in Hay River, and addressing increased electricity costs due to low water levels.

While increasing the supplementary reserve, the territory plans to also increase the threshold departments must meet to request additional funding from $50,000 to $215,000, with the aim of encouraging departments to use existing funding.

Budget spending highlights

Wawzonek highlighted how cabinet aims to advance priorities set by MLAs in early 2024 with spending in the 2026-27 budget. Priorities include reconciliation, housing, building a strong economic foundation, healthcare and addressing the effects of trauma, and safe residents and communities.

She noted that, unsurprisingly, healthcare continues to account for the greatest share of operations spending.

While the territory has a unit tasked with making healthcare in the territory more sustainable, it is not expected to release its first recommendations until later this year.

Yet Wawzonek pointed to a proposal in the budget to spend $486,000 on a two-year project for medical travel case management, with a goal of reducing avoidable medical travel costs and improving patient experience.

The budget further proposes $3.1 million to establish round-the-clock laboratory and diagnostic services at Stanton Territorial Hospital in the face of increased workloads and long wait times.

The budget plans $1.7 million to support long-term and extended care as well as reception capacity at the Łıwegǫ̀atì building, $1.7 million to permanently support the school-based mental health and wellness program, $589,000 to improve security at the Hay River health centre, and $287,000 to implement recommendations on healthcare access in small communities.

On the reconciliation front, finance officials highlighted a proposed $675,000 in spending to commission and install a residential schools monument, $519,000 to recruit and retain Indigenous language instructors in schools, $666,000 to implement the United Nations Declaration on the Rights of Indigenous Peoples, and $68,000 in enhanced support for the Official Languages Board.

Other expenditure highlights in the budget include $8.3 million to support emergency shelters in Yellowknife, Hay River, Inuvik and Fort Simpson – the money will also fund the establishment of a homeless division within Housing NWT – and $460,000 for a day shelter and sobering centre in Yellowknife.

The budget proposes increasing funding for community governments to support municipal services and infrastructure by $1.4 million to “reflect continued inflationary pressures.”

Status of the NWT’s economy

While the premier and finance minister started the 20th Legislative Assembly with a fiscal responsibility strategy and plans to increase savings, the territory’s financial plans have since shifted.

In March 2025, for example, the federal government increased the territory’s borrowing limit from $1.8 billion to $3.1 billion.

Wawzonek said the 2026-27 budget moves away from attempting to make cuts to reallocating existing resources to “areas of highest need.”

She said that has included a review of long-vacant positions in the public service. Finance officials said 39 public service positions were reduced while 59 new positions were added.

“This is arguably not the moment in time to try to reduce our debt,” Wawzonek said, adding that, at the same time, the territory is working to constrain spending.

Finance officials were frank on Thursday that the territory’s economic output is shrinking, particularly as diamond mines near the end of production, and the NWT faces other challenges including a tight labour market, housing shortage and infrastructure deficit.

The 2026-27 budget projects the territory will end the fiscal year with $2.21 billion in debt.

“That’s significant, it’s something we need to address,” deputy minister MacKay said, while noting debt servicing payments remain manageable.

Wawzonek said some smaller sectors in the territory are growing, including the film and fishing industries. She added tourism is also rebounding from Covid-19.

Wawzonek said mineral investment in the territory is shifting from exploration to mineral deposit appraisals, suggesting that mining projects are advancing. MacKay highlighted the Nico, Pint Point and Prairie Creek projects.

To support the territory’s economy, the budget proposes $400,000 to implement Mineral Resources Act regulations, $367,000 to accelerate land tenure transfers, $345,000 to support the film industry, $335,000 to support the territory’s tourism strategy and $300,000 to help broaden regulated gaming.

“There’s a lot of uncertainty for folks right now,” Wawzonek said.

She said the GNWT’s strategy is to “try to control the things we can put money into, the things that are within our responsibility,” while simultaneously “trying to make sure we’re growing the pie of the Northwest Territories.”

“There is so much potential, there is so much opportunity,” she said. “We just can’t unlock it alone.”