NWT’s municipal funding gap isn’t closing in real terms, MLA says

While the NWT government says it has almost reached its goal of reducing the municipal funding gap by $5 million, critics say that’s not nearly enough. 

For almost a decade, the territorial government has acknowledged a multi-million-dollar gap exists between the funding it provides to municipalities and the funding communities say they require.

In its recently released 2022-23 budget, the territory proposed adding $922,000 to the overall sum of base funding divided between community governments. That leaves $744,000 remaining before the GNWT reaches its goal of supplying $5 million more than had been available at the start of the present government in 2019.

But some MLAs this week said that increase does little to address what was a gap of more than $40 million in 2019, given rising inflation and infrastructure costs.

Caitlin Cleveland, the MLA for Yellowknife’s Kam Lake, on Monday noted an NWT government report in 2019 found the funding gap remained “basically unchanged” despite the territory increasing municipal funding by more than $8 million in the five preceding years.

Cleveland said the cost of maintaining and replacing infrastructure in NWT communities rose by an average of $2.7 million per year during the same period.

Cleveland said the current government’s $5-million commitment, which amounts to $1.25 million per year, is not enough to address rising costs nor keep up with inflation. 

“It’s clear that the government is not actually reducing the municipal funding gap,” she said. “The persistence of the funding gap is disappointing and has real costs on people’s lives.”

Cleveland quoted the Conference Board of Canada think tank’s indication that closing the funding gap would create 220 jobs in the NWT.

“This kind of investment creates jobs, generates economic activity and supports the overall health and wellness of northerners,” she said. 

Shane Thompson, the NWT’s minister of municipal and community affairs, said his department was willing to work with other territorial departments and the NWT Association of Communities to find “unique and different ways” to address the issue.

Thompson, who is also the minister of lands, said his government had been working to transfer some land within municipal boundaries, particularly in Yellowknife.

The minister said the territory could not commit more money to communities and funding them was a “shared responsibility” among many levels of government and organizations. 

“These funding gaps exist virtually in all levels of government, including GNWT,” he said. “It is not realistic to expect the government to cover the costs to close the gap, considering today’s economy and economic situation and our current fiscal situation.” 

Thompson said his department was working to determine the current size of the municipal funding gap, community by community. 

Last week, Monfwi MLA Jane Weyallon Armstrong said ongoing water and sewer issues in Behchokǫ̀ are an example of what can happen when communities are chronically underfunded. Some residents in Edzo have gone weeks without clean running water or sewer services.

Thompson said at the time there was no more money to fix those problems and communities had to decide where to prioritize the infrastructure funding they receive.

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Correction: March 1, 2022 – 13:10 MT. This article initially stated Caitlin Cleveland is the MLA for Frame Lake. She is in fact the MLA for Kam Lake, and the article has been amended accordingly.