Budget Address 2023

Introduction

Mr. Speaker, this is the final Budget of the 19th Assembly. It provides a final opportunity to consolidate the work we have done during the 19th Assembly, set wheels in motion for the future, and ensure we end this Assembly in better financial shape than when we started.
In this Budget, we show both responsiveness to the needs of the Northwest Territories and responsible fiscal management through a right-sized approach that recognizes needs and opportunities as well as our capacity to attain them.

This Budget comes as we maintain stability across the Northwest Territories economy during ongoing times of volatility and uncertainty. We successfully managed to avoid reductions to the public service or to the programs and services that public servants provide. We have not wavered in our strong focus on prioritizing work that will improve governance and the sustainability and delivery of those programs and services over time, even in the face of a short- or medium-term crisis.
In this Budget Address I will describe the expectations for the economy, the fiscal outlook as we move towards the next Assembly and the actions we are proposing to strengthen the foundation for the future.

Economy and Outlook

The Northwest Territories’ economic indicators are positive, and our future should be bright.

This is a bold statement but it needs to be said. The possibility for a prosperous future lies within our collective hands; not only those of elected leaders but residents across the territory. It is time to refresh our economic perspective. Focussing on our myriad of economic challenges can become self-fulfilling inertia at best and an excuse for paralysis at worst. Instead, we can put emphasis on the economic opportunities around us and focus attention on what we can do to realize our potential. There will be geographic constraints and challenges that require support from other levels of government; but we should, at the least, ensure that nothing within our control remains a barrier.

We face our economic challenges because the alternative is unacceptable and not who we are. We had two years of public health shutdowns and just as the economy was rebounding, we were hit by devastating floods and rampant inflation. The example of residents facing the disaster of the recent floods is a clear demonstration that when the going gets tough, Northwest Territories residents grab a bucket and start bailing.

Now we need to turn that determination, tenacity, hard work and drive towards our collective future. The government can play a part to provide education, skills, health supports and economic incentives, but the economy is not under the exclusive control of government.

The government should show timely responsiveness as well as responsible fiscal management to maintain stability for residents and communities. The government can also try to mitigate the impacts of economic disruption – and there are still notable signs of economic disruption.

We know that businesses in all sectors are struggling to find workers. This is a challenge for employers but an opportunity for prospective workers to take advantage of the market and join the workforce or add to their skills and increase their employability. We are proposing more resources in this Budget to help residents obtain the education and work-related skills training to help them take advantage of work opportunities and to help businesses meet their labour market challenges.

We are also aware of and experiencing the impacts of inflation. This is leading to higher overall costs as well as pressure on wages, which further adds to cost pressures. In response, this Budget proposes increased income support benefits and continuation of the Senior Citizens and Disabled Persons Property Tax Relief Program. We are also continuing to increase local food production in the fishing industry and country food harvesting to help reduce dependency on more distant markets.

Unemployment is at a record low. As for inflation, the signs are there that inflation in global consumer prices is beginning to moderate as rising interest rates slow investment and transportation bottlenecks get resolved. Spending on mineral exploration is increasing and as the international drive continues to achieve net zero emissions, we will be ready with robust regulations and skills training to ensure that Northerners benefit from developing critical minerals deposits in an environmentally sustainable way.

The economy is an organic system, and no government can simply turn it on or off. However, governments can support the economy indirectly through economic initiative spending as well as more directly through capital spending and tax regimes, all of which we have done through the life of this government. As well, we have operated as a foundation of economic stability during what have been turbulent times. To continue to do so, we need to ensure the government has the fiscal capacity to provide timely responses to unexpected shocks. We have not only been responsive in emergencies, we have increased our ability to respond by improving our fiscal capacity.

Fiscal Situation and Outlook

Mr. Speaker, with the final budget of this Assembly, we can see the vision set out in the first budget coming together. Importantly, that vision was not a single event or moment in time. The 2023-24 Budget continues with our goal of changing the focus towards a more all-of-government approach that more clearly shows the trade-offs in different public expenditures and priorities from a limited amount of revenue.

With the 2023-24 Capital Estimates approved last November we broke the cycle of an unrealistically large capital budget that then requires an even larger borrowing plan commitment. We right-sized our capital budget to align our capital plan with the economy’s ability to build it. We have chosen to take the time to build in a way that maximizes the project benefits for the Northwest Territories economy and positions the GNWT for a successful fiscal transition to the 20th Legislative Assembly.

By providing more clarity on our actual anticipated capital spend, we have given more certainty to local businesses when bidding on projects and this helps the GNWT to better maximize the local economic benefits of its project construction. We have also made changes to our procurement processes so that local businesses and communities can take better advantage of the business opportunities that government spending creates.

While I am encouraged when a plan starts coming together, we are not done. We have, through a more realistic approach to capital planning, provided the means for a more accurate borrowing plan and more transparency in how GNWT borrowing complies with the Fiscal Responsibility Policy. Last summer we evaluated this Policy and its requirement that at least half of GNWT capital investments is financed by the operating surplus to ensure that it still is effective in meeting our debt management principles. We have already started changes in the reporting on the future debt implications in this Budget and in short order we will be revising the Fiscal Responsibility Policy to help decision makers better understand the implications of their budgetary choices.

These steps have restored balance to our overall fiscal situation and if we continue to adhere to this fiscal strategy, we are no longer projecting to be in danger of exceeding the federally-imposed borrowing limit.

We are projecting to finish 2022-23 with an operating surplus of $40 million; lower than budgeted as we required more resources to deal with this year’s flooding and wildfires.

The operating surplus for the 2023-24 Budget is projected to be $178 million, after adjustments. This surplus is sufficient to comply with the Fiscal Responsibility Policy. Total revenues are forecast to reach $2.5 billion, and the operating budget is $2.2 billion. The 2023-24 total debt projection is $1.5 billion, which leaves a comfortable $311 million below the $1.8-billion borrowing limit.

Revenues

Mr. Speaker, we raise revenues to fund government programs and services and invest in infrastructure that is used to deliver programs and services and to support the economy.

We heard consistently over the three years of Budget Dialogues that there is narrow capacity for increasing taxes. In line with the goal of remaining responsive to the times, we do not want to use taxes in a way that could reduce the incentive to grow and diversify the economy. Accordingly, we will live within our current means and stay the course on taxation by following the established practice of increasing property tax rates by inflation.

We will also be debating increasing carbon tax rates this Session as required by Canada in their efforts to reduce national greenhouse gas emissions. The proposals in this Budget to offset the carbon tax burden such as increased Cost of Living Offset amounts or spending that helps individuals and businesses reduce their carbon-based fuel consumption are conditional on approving carbon tax rate increases. If, on April 1, 2023 we do not raise carbon taxes to $65 a tonne of greenhouse gas emissions, the federal system will apply and carbon tax revenues generated in the territory will be distributed through federal programs.

Reflecting on Work to Date to Support the Vision

Before I get to the main part of the Budget where we traditionally focus on the new dollars that we are proposing to advance the priorities of this Assembly, I want to discuss what the overall $2.2 billion, or $49,000 per person, in spending is accomplishing.

The 2023-24 Budget continues our goal of changing the focus to an all-of-government approach that more clearly shows the trade-offs in different public expenditures and priorities necessary with a limited amount of revenue.

I remain excited as the Government Renewal Initiative continues to create a culture change that prioritises an evaluation mind-set to ensure efficiency and responsiveness. We have a full inventory of programs and services that the GNWT delivers and are making considerable progress in identifying the priorities for the first evaluations. Substantive results are not ready to help with this year’s budget but will start being produced in time for transition to the next Assembly.

The shift towards whole-of-government thinking can be seen in other work that has been achieved or is under way. For example, “Changing the Relationship” is the government’s action plan in response to the National Inquiry into Missing and Murdered Indigenous Women, Girls and 2SLGBTQ2S. One of its core objectives is to rebuild trust in government by ensuring programs and services are responsive to the people they serve.

We are also following this in the multi-departmental development of the Homelessness Strategy that will ensure that the dollars we attach to actions in the strategy will provide the best value.

We are moving ahead with our thinking from the end user perspective of government programs and services so that people are better able to access GNWT programs and services how they want, where they want and when they want. Our government’s eServices program currently provides online access to 19 services in five different program areas. We are working diligently to increase our online offerings as quickly as possible while still ensuring that residents may be confident that their personal information and online transactions are protected.

We are well underway in implementing a host of recommendations arising out of the latest Employee Satisfaction Survey. We are working to meet department-specific Indigenous hiring targets to ensure our workforce better represents the Northwest Territories population. We are also following through on our other public service initiatives such as the Indigenous Recruitment and Retention Plan, the Affirmative Action Plan Review, and Human Resource Plan to continue to strengthen our civil service in a way that supports our vision for the Northwest Territories.

Our public service continues to work on key pieces of legislation for more robust governance rules that support economic development, protect the environment and safeguard public safety. We expect substantial progress on the Mineral Resources Act Regulations, the Builders Lien Act, the Fire Prevention Act, the Liquor Act, and the Public Lands Act in the next year.

Housing NWT is on a path to successfully complete its mandate commitments, such as increasing the public housing stock by 100 units and supporting the transition of individuals and families to homeownership. It is focussed on partnerships and working to build local capacity while continuing to advance its multi-year capital plan delivery of over $100 million involving 510 housing units across the Northwest Territories. Housing NWT continues to advance its renewal strategy including receiving input from the Council of Leaders to create a new mandate and implementing program and policy changes with a focus on helping those who need it most, as well as using formal and informal arrangements to improve relationships with Indigenous Governments.

Expenditures

Mr. Speaker, this $2.2 billion operating budget proposes $150 million in additional spending over the 2022-23 budget. This amount includes $62 million for expenditures in response to last spring’s flooding that we expect to substantially recover through federal disaster assistance programs. If we remove this major one-time adjustment, the total increase in spending remains a manageable 3.4 per cent.

We are recommending $21 million be approved to address higher demand or higher costs for current programming that departments cannot manage in their existing budgets. This includes over $10 million to support health services, mainly out-of-territory supported living for adult patients, chemotherapy drugs for health agencies, and the Stanton Territorial Hospital’s intensive care unit, but other departments required more resources as well.

We are considering expenditure pressures faced by non-government organisations that deliver programs and services on our behalf. Budget 2023 changes our approach to funding non-governmental organisations, with a proposed $738,000 dedicated to helping specific organisations address inflationary pressures. These include organisations helping health agencies, housing, and the Community Futures Program and Community Transfers Initiatives. We are also helping departments with the wording for multi-year agreements with some non-government organisations. These actions have been a long time coming and we are going further with the establishment of an external advisory committee to better support non-government organisations.

New spending for initiatives is $42 million, of which $10 million is supported by federal transfers.

Strengthening Health Care

A strong health care system is vital for healthy individuals and a robust community and economy.

For this reason, the Department of Health and Social Services receives the largest share of the annual operating budget and in this Budget we propose an additional $30.9 million to strengthen our health care delivery.

Key to a successful health care system is the people who deliver the care. We are proposing to add $9 million next year for actions to make it easier to recruit and retain frontline workers and to specifically address challenges in recruiting and keeping frontline registered nurses, nurse practitioners and physicians.

We are also seeking to improve health care sustainability with an additional $1.2 million in this budget for personal support worker and licensed practical nurse training programs to meet expected labour force demands for Home and Community Care and Long-Term Care programs. This support will complement the $8.6 million proposed to fund positions at the Stanton Legacy Facility to provide for more extended care unit beds and support the new long-term care beds.

We propose to add $11 million to the department’s budget to transition from pandemic to endemic including ongoing support for vaccinations and public health.

Keeping Our Communities Safe and Healthy

Mr. Speaker, we cannot claim to be responsible or responsive if we do not continue to seek ways to reduce the burden of socio-economic disadvantage or support residents experiencing mental health or addictions issues. Our investments directed to these vulnerable groups will help us achieve our goal of healthy people free from poverty and have the added benefit of reducing government expenditures over the long-term by reducing residents’ reliance on more expensive social programs.

We are proposing to invest almost $5.2 million to improve the existing Income Assistance program and create a new program tailored for seniors and persons with disabilities that will help them age in their own homes with dignity. With this initiative we intend to adjust benefit levels using the Northern Market Basket Measure, make changes to refresh the existing income exemption levels and remove barriers for using the Income Assistance program.

Improving community safety also responds to consistent concerns from communities on issues of safety and equality. With the support of our federal partners, we are including $750,000 for a framework for enhancing victim services that will continue support to communities for person-centred victim services. With financial support from Canada under various agreements we propose to add $2.2 million to the Department of Justice’s budget to strengthen access to justice services for residents. This new funding will improve access to the justice services, including: legal aid; Indigenous court work services; support for family members engaging with the family justice system; improvements to the family justice system; public legal education and information; and increase access to legal advice for survivors of sexual assault and intimate partner violence to support safety planning, making informed decisions, and to navigate the justice system and Emergency Protection Order processes. Also included in the $2.2 million is $554,000 to further support Community Justice Committees.

We are also proposing to establish a permanent Coroner position and include 18 Relief Community Coroner positions into the public service with $273,000 to fund this initiative.

Efforts continue to fill the gaps in our territorial emergency response system to meet ongoing challenges in dealing with major emergencies and implement the recommendations of the Auditor General of Canada. With this Budget we are recommending an additional $453,000 to enhance the Emergency Management Organisation support to community governments for emergency planning, preparedness and situational awareness, mitigation and prevention of territorial emergencies.

We also need to continue to reduce the risk to government information technology by upgrading technical equipment where necessary and are proposing $406,000 for the Tłı̨chǫ Community Services Agency to upgrade its equipment so that it remains compatible with the rest of the GNWT information systems.

Reducing the Municipal Funding Gap

Mr. Speaker, with this Budget’s proposal for another $833,000, the commitment to reduce the municipal funding gap by $5 million by the end of this Assembly has been achieved. This will bring the total community contribution funding for operations and maintenance to almost $55 million.

We are also including almost $62 million in flood recovery assistance for the Town of Hay River and the Kátł’odeeche First Nation reserve for the next fiscal year. The majority of this funding is expected to be recovered from Canada under disaster and emergency assistance programs.

Investing in the Children of Our Territory

We have implemented the first steps toward more affordable licensed early learning and childcare programming in the territory, with the goal of reducing families’ childcare costs to an average of $10 a day by 2026. This initiative is supported through federal funding and with proposed funding of $10.3 million in 2023-24 we are aiming to increase access to high-quality, inclusive, affordable, early learning and childcare spaces. The new investment will make childcare fees more affordable for families while providing early childhood educators with increased professional learning and post-secondary opportunities.

The Healthy Family Program provides contributions to 15 communities to improve their early childhood development programs with program resources, supplies and events. We are recommending a further $250,000 in 2023-24 to expand the program to another community.

We are also continuing our collaborative efforts with the federal government in French language education with a proposed $2 million investment. These additional French language funds will be used for French as a second language programs, the final year of contributions to strengthen the Collège nordique francophone, and to implement the Teacher Recruitment and Retention Strategy.

We are proposing to improve our Student Funding Framework to allow for consistent and stable administrative support to small schools with $368,000 in additional funding that will ensure a minimum level of administrative funding for our smaller schools. This increase will help ensure that teaching staff in smaller communities will be better able to focus on teaching students rather than administrative tasks.

Building the Labour Force

Mr. Speaker, the Building Skills 4 Success in the NWT program focuses on developing and delivering essential skills training programs. Among its aims is to improve the availability of essential skills among the trades and for broader skills that are transferable and applicable in any workplace. This program is in partnership with the NWT Literacy Council and Aurora College. We are seeking to strengthen this program with an additional $1.9 million, supported by the federal government.

We want to strengthen our support for Northwest Territories residents in their efforts to further their formal education after high school. This will not only increase their opportunities for high-paying jobs but improve the productivity of the Northwest Territories labour force. We are recommending a further $1.5 million investment in the Student Financial Assistance program to improve the financial stability of students to achieve their educational goals. The proposed funds include increasing the Basic Grant for Northern Indigenous students to fully cover the average cost of tuition, books and supplies and eliminate their 12-semester limit for the basic grant. In addition, we are proposing an increase to the Basic Grant for non-Indigenous students who were schooled in the territory to assist with 80 per cent of the average cost of tuition, books and supplies.

To foster growth and collaboration with Indigenous government partners and offer opportunities for GNWT staff to develop their careers, we are proposing $323,000 in this Budget to further our partnership in the Building Capacity in Indigenous Governments program. Our employees will benefit from experience working in different places in the territory while Indigenous governments will benefit from building capacity and adding employment in their communities.

Supporting the Economy

Mr. Speaker, we continue to look for ways that the territorial government can support the efforts of residents to build an economy that benefits Northerners.

We can help by making economic necessities more affordable. We know that lack of affordable housing is a critical issue, creating barriers to economic development and labour force participation and puts pressure on other GNWT social programs. We are proposing an additional $4 million for core Housing NWT programs that will be used to support home repairs, fuel tank replacements, home purchases, mobility modifications, preventative maintenance, and seniors aging in place.

We are also proposing a further $1.83 million in this budget to fund 2022-25 Energy Action Plan efforts to guide the development of affordable, secure and sustainable energy for transportation, heat and electricity in the Northwest Territories.

We are proposing $446,000 for meat safety regulations for locally produced, harvested and affordable food. Drafting regulations should be done by summer, training is set to begin by winter, and full implementation, with application intake available and licences being issued, is planned by the end of the fiscal year. This should help residents with affordable and sustainable food and it supports the local economy.

Budget 2023 proposes several measures to support mineral resource exploration and project development. First, we propose to further implement the Mineral Development Strategy with $280,000 to enhance the Unlocking Our Potential brand that we are using to attract global attention in our world-class resource base and will permit us to extend the over-subscribed Prospector Training Program for another two years.

The Mining Incentive Program is another successful and oversubscribed GNWT initiative. This Budget proposes to complete the increase promised in the mandate from $1 million to $1.5 million with a $200,000 increase to encourage prospecting, exploration, and investment by helping reduce financial risk at the grassroots mineral exploration stage. Every mine starts with a staked claim and this has been a supportive program for prospectors and exploration companies to attract and support early-stage and advanced exploration projects.
Work is underway to implement the Mineral Resources Act through the development of regulations required for the Act to come into force. We are adding $149,000 in 2023-24 to work towards their completion over the next two years. This will finalize the modernization of our regulatory environment for mineral rights governance within the existing framework for co-management of land, water and resources.

We continue to put forward initiatives to support economic diversification and other business opportunities. In partnership with the Canadian Northern Economic Development Agency, $50,000 is proposed to make a business case for local production of cement, which will do double duty by reducing the carbon footprint of the construction industry from transportation if cement can be produced locally.

Heritage centres keep track of the stories that make the Northwest Territories a special place with a deep history and are a valuable part for tourism industry offerings. We are proposing $500,000 to support heritage centres across the territory with ongoing funding as grants for operations, maintenance or capital upgrades to ensure that these centres remain viable.

As part of continued implementation of the over-arching Tourism 2025 strategy, we are proposing $324,000 to provide the following: increased funds for small communities’ investment in tourism infrastructure; business supports to develop and offer products and services to travellers; doubling the mentorship support for businesses and youth in the tourism industry; and partnering with communities to offer cultural experiences and better park programming. We are also seeking an additional $250,000 to give to the five regions so they can develop regional marketing plans that complement larger marketing initiatives by NWT Tourism.

We are asking for a $200,000 increase to the Film Rebate Program to improve the competitiveness of the Northwest Territories film industry with a total annual rebate program of $300,000. This program is designed to encourage content creation in the territory by rebating portions of local spending, hiring, and travel to and within the Northwest Territories for production crews.

Taking Action on Climate Change and Protecting the Environment

Mr. Speaker, our role in the stewardship of our environment is a paramount priority as is our effort to adapt to the effects of climate change.

When we make decisions, we want them to be grounded in good evidence. The GNWT is working with co-management partners to support recovery of the Bathurst and Bluenose-East barren-ground caribou herds, which have experienced dramatic declines. We have increased population surveys for both herds to every two years, increased the number of collared caribou, and did an additional Bathurst survey in 2022. In Budget 2023, we are proposing an additional $1.14 million to monitor the population, protect important habitat, and manage predators through the traditional economy.
This Budget proposes $114,000 for an application-based grant program for installation of electric vehicle charging stations as part of our efforts to reduce greenhouse gas emissions. The GNWT is working in collaboration with Natural Resources Canada to deliver the Northwest Territories Electric Vehicle Infrastructure Program. This funding is dedicated to getting EV charging to multi-family buildings, on the street, and at work. Organisations can apply all year round on a first-come, first-served basis for level 2 charging stations and this funding proposal will support 72 chargers across the territory over the next two years.

Looking Ahead

Mr. Speaker, Members of this Assembly should be proud of the work we have done together. I am grateful for the help of all members of the Assembly, residents, businesses, community leaders, stakeholders and all Budget Dialogue participants for their input in developing the GNWT budgets.
We could not accomplish all that we have without the ongoing support of the federal government. I am proud of how we worked together with Canada to lessen the economic disruption to people’s lives during the pandemic and deeply appreciate the federal support that was given to our government and Northwest Territories residents. We have taken what we learnt about collaboration during this time to improve our partnership with Canada on our priorities such as enhancing the Slave Geological corridor, expanding the Taltson hydro project and building the Mackenzie Valley Highway.
We are stronger working together than alone. We have made strides in working with Indigenous governments to make sure that our priorities mesh with their priorities and we hope to continue to strengthen these relationships. We will continue to work with Canada on our shared priorities such as health care.
There is momentum that attaches to the end of an Assembly. We want to use that momentum to continue the positive shift in the way we do business. We have been responsive not only to crisis but to input from residents across the Northwest Territories. I am confident that we are at the crest of change towards a culture of continuous improvement and a right-sized approach to our fiscal capacity. The implementation of four-year business planning and the changes in how we budget for capital investments have dramatically helped improve our fiscal outlook. The forward movement happening in the Government Renewal Initiative will carry this momentum into the next Assembly to ensure that the GNWT provides even more value for the dollars it spends on programs and services.

Conclusion

Mr. Speaker, this final Budget of the 19th Assembly continues to build on our Mandate priorities, and I am confident will leave the next Assembly with a fiscally-sustainable framework on which to build. In addition to structural governance changes are the choices we made for investments in communities, health care, health care workers, early childhood, skills training and in support of economic growth. Our legacy is derived from all of these changes and choices that will provide returns for the benefit of the people of the Northwest Territories for generations to come.
Thank you, Mr. Speaker.