NWT economy beginning Covid-19 recovery, says finance minister
While the Covid-19 pandemic has caused financial hardship across the Northwest Territories, the finance minister says signs of an economic recovery are appearing.
In the Legislative Assembly on Friday, Caroline Wawzonek said the territory has recovered many of the resident jobs that were lost. She said some measures of employment had either climbed back to March levels or at least partially recovered.
Retails sales are also rebounding, said Wawzonek, with the NWT outperforming southern provinces this year.
“We are painfully aware of sectors in the economy that are still in serious hardship, but are cautiously optimistic that we will have a 90-percent job recovery to pre-pandemic levels by the end of the calendar year,” Wawzonek told MLAs.
The pandemic is unlikely to lift any time soon. As Wawzonek spoke, the territory reported three more presumptive positive cases of the virus, which, if confirmed, would be the first new cases since April. How long Covid-19’s economic storm will last is unclear.
The territory must, however, already contend with a drop in revenues and increased expenditures in its forthcoming 2021-22 budget.
The government estimates $175 million in new spending for emergency measures and $92 million in federal support, meaning the overall demand on the territory’s bottom line is projected to be $83 million.
Remaining fiscally stable won’t be easy, Wawzonek warned. The latest medium-term fiscal outlook projects the NWT will run at a deficit within three years and exceed its only recently raised borrowing limit of $1.8 billion in the same period.
In response to economic concerns, Wawzonek said the government plans to pay for its pandemic response by decreasing its operating surplus rather than increasing taxes.
Specifically, Wawzonek said the planned surplus for 2020-2021 is expected to drop by $143 million from the February budget to $60 million.
The surplus, a standard feature of the NWT’s budget, is normally injected into infrastructure projects for future years. Lowering that surplus will limit the money available for infrastructure, though the territory hopes Ottawa can be persuaded to take on ever-larger chunks of that spending.
“Covid-19 is not an excuse,” Wawzonek said.
“We must focus on the difficult choices we need to make to live within our means while providing the programs and services that Northwest Territories residents need, especially within the context of Covid-19.”