Territory could lose $34.2M in transfer payments
Federal finance minister commits to review of move that would see NWT miss out on millions
Shane Magee
Northern News Services
Wednesday, December 23, 2015
SOMBA K'E/YELLOWKNIFE
The federal finance minister has asked his department to review a move to cut $34.2 million from a transfer payment to the territory, after NWT Premier Bob McLeod brought it to his attention.
On Dec. 16, the GNWT was notified in a letter from Finance Canada it will get $1.256 billion from Ottawa in 2016-17, a 2.7 per cent drop from 2015-16.
The premier said he was "disappointed and not very happy," when he first learned of the cut.
"We were very concerned about that," he said.
The cut came as Statistics Canada carried out a "major change" to the way it calculates territorial government spending, McLeod said. The details of how the calculation changed were not immediately clear.
The $34.2 million is roughly $5 million more than the GNWT planned to spend this year on the entire Department of Lands.
It's a small fraction of the $1.6 billion the territorial government budgeted to spend this year but comes as revenues are described as "flat," mines have ceased operations while wildfires and low-water levels have cost the territory millions in non-budgeted spending.
McLeod, who was in Ottawa on Sunday and Monday meeting with provincial finance ministers, said he raised the issue with federal Finance Minister Bill Morneau who was also present.
"(Morneau) said he would be directing his staff to work with us to resolve it early in the new year so that the outcome is different than the letter," said McLeod, who was attending the meeting because a territorial finance minister was not yet in place.
McLeod declined to speculate on what kind of impact the loss of $34.2 million would mean for the GNWT.
"I'd prefer to take minister Morneau's word that he will work with us to come up with a different result," McLeod said.
According to the letter, the GNWT is set to receive $1.2 billion from the federal government under the territorial formula financing agreement, which is in the second of five years.
The agreement allows for government transfer money to the territories to fund public services "in recognition of the higher cost of providing programs and services in the North," according to the finance department website.
In addition to that funding, the territory is expected to get $44.2 million from the Canada Health Transfer and $16.4 million via the Canada Social Transfer payment.
Transfers accounted for more than 67 per cent of GNWT income in the 2015-2016 budget.
McLeod said he believes the territory will receive the funding, adding the federal government would respond to the territory in the new year.
The GWNT expects to present its 2016-17 budget in the legislative assembly in the session starting at the end of May.
A request for further information from Finance Canada was not returned by press time.
