SOMBA K'E/YELLOWKNIFE - The message from the government was clear as day: it's time to tighten up.

The federal budget was announced Thursday afternoon with a focus on job creation and measures to tighten the country's fiscal belt and chip away at the $56-billion deficit.

Steve Petersen, an employee with the Public Service Alliance of Canada, plays 2010 Federal Budget bingo during a budget watch session at their Yellowknife office on Thursday. - Andrew Livingstone/NNSL photo Budget highlights for the North $3.2 billion in personal income tax relief $7.2 million over two years to improve Canadian fish and seafood industry access to the international marketplace. $30 million over two years to ensure First Nations students benefit from comparable education and achieve comparable results whether the classroom is located on or off reserve. $8 million over two years for Indian and Northern Affairs Canada to support community-based environmental monitoring and reporting in the NWT and Nunavut. $285 million over two years for renewal of aboriginal health programs in five key areas: the Aboriginal Diabetes Initiative; the Aboriginal Youth Suicide Prevention Strategy; maternal and child health; the Aboriginal Health Human Resources Initiative; and the Aboriginal Health Transition Fund. $199 million over the next two years to offer support services to residential school survivors and their families. Renewal of Canada Health Transfer and Territorial Formula Financing for $60 million over two years for three territories.

In his budget address to the House of Commons, Finance Minister Jim Flaherty emphasized the private sector must grow in order to strengthen the nation's economy.

The budget includes a final sum of $19 million for the Economic Action Plan, along with a series of spending initiatives focused at creating jobs and growth through innovation.

"We take the same approach that Canadian families take in managing their household budgets," Flaherty said.

"We are spending what is necessary to meet an emergency. We are also looking beyond that emergency, to ensure we can keep paying off the mortgage and saving for our children's education. We are ensuring we will have the resources to sustain necessary spending on the priorities of Canadians. We are protecting our quality of life, and securing our long-term prospects.

"Doing so requires choices - balanced, sensible choices."

Western Arctic MP Dennis Bevington said the budget is going to be hard to support because the government has neglected aspects of the economy that are important to the North.

"There is no new programs and there are cuts to a number of areas: environment, housing, natural resources and those are areas that will make a difference to the North," Bevington said. Cuts to corporate taxes are wrong, he added. "We're giving away our natural resources. It's very much a for sale sign on Canada."

In the throne speech on Wednesday, Governor-General Michaelle Jean said the government plans to freeze all departmental operating budgets and perform a rigorous review of how departments are spending their money, a telltale sign of potential spending cuts in future budgets.

"Canadians live within their means and expect their governments to do the same," Jean read from the floor of the Senate. "Spending designed for a rainy day should not become an all-weather practice."

The government, she read, "will aggressively review all departmental spending to ensure value for money and tangible results."

Federal departmental budgets will not be increased to fund the 1.5 per cent annual wage increase for the public service. Employees will continue to see their wage increases as set out in their collective bargaining agreement, but departments will be required to absorb those increases.

Departments will continue to assess their programs and identify five per cent of the lowest-priority and lowest-performing programs to be cut.

Territorial Finance Minister Michael Miltenberger said the federal government's promise to maintain territorial transfer payments is welcome, as is the renewal of the Canada Health Transfer and Territorial Formula Financing for two more years - which totals $60 million.

"They're providing us with much needed relief in that area," he said, adding while the $60 million was smaller than the original agreement, it's not bad. "It's much bigger than the zero we would have got had they let it sunset. So, we will wait to see how it will be divided up.

"Given our health pressures it was a good bit of news for us."

Mary Lou Cherwaty, president of the NWT Federation of Labour, said she was disappointed with the budget, citing concern over the review of departmental spending.

"The review means 'to look for ways to make cuts,'" she said, adding the end of the collective bargaining agreement for public service members in 2011 could mean trouble for government workers. "I would be worried about them having to go into bargaining in 2011.

"The government is going to want them to follow their lead."