N.W.T. finance minister tables modest $2.2B budget for uncertain times
CBC
Amid high inflation, high interest rates and widespread labour shortages, the Northwest Territories Finance Minister delivered a fiscal plan that she says is "responsive and responsible" in these volatile times, and puts the government in better financial shape than when her term began.
Though her 2023-2024 budget documents reported a territorial economy that has returned to "its pre-pandemic path of slow decline," Caroline Wawzonek expressed optimism.
"There's a lot of numbers that suggest that things are good. We have very strong employment indicators. We still have extremely high wages in the Northwest Territories," she told reporters before tabling her proposed operating budget on Wednesday.
The modest, $2.2-billion budget offers no grand spending proposals, and no new taxes. It does, however, include inflationary increases to property taxes and increases to carbon tax rates.
The plan also avoids cutting public service jobs or programs and services, said Wawzonek.
This is the last operating budget Wawzonek will present before the territorial election in October. MLAs will debate the spending plan over the coming weeks and vote on a final version before the end of March.
The proposed budget includes $2.48 billion in revenues, $82 million is new spending, and a $178-million surplus that will largely go toward capital projects.
Proposed expenditures are higher than last year's initial spending estimates of $2.1 billion, but slightly lower than what the government believes it actually spent when accounting for flood relief. Revised estimates for 2022-2023 put spending at around $2.37 billion.
Finance officials said flooding in Hay River and the Kátł'odeeche First Nation last spring is expected to cost a total of $175 million, with $62 million of that coming from this year's budget.
Though Wawzonek said the future "can be bright," she acknowledged that the economy continues to be "not be particularly diversified." It still relies heavily on the mineral resource industry, while diamond mine closures draw ever nearer.
Wawzonek added that she's "extremely live to the fact" that public sector growth is outpacing private sector growth, which "is not long-term sustainable."
Indeed, budget documents say that there are now more N.W.T. residents working in the public sector than in the private sector — a "significant and concerning development" that began during the pandemic.
The budget anticipates the government's total debt will amount to $1.5 billion by March 31, 2024. That's $65 million more than what was projected for 2022-2023, but still more than $300 million below the territory's federally-imposed debt ceiling of $1.8 billion.
The government previously anticipated exceeding that borrowing limit within four to five years. Finance officials now expect to remain below the debt cap for the next several years.
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