SOMBA K'E/YELLOWKNIFE
The first Liberal budget released Tuesday keeps promises to raise the Northern Residents Deduction by 33 per cent and spends more on First Nations but broke commitments to return to surpluses after running "modest" deficits.

Key budget points Northern Tax Deduction - increasing by 33 per cent as promised in last fall's federal election First Nations - $40 million for national inquiry into missing and murdered aboriginal women; $1.2 billion for First Nations, Inuit and northern communities Old Age Security - age benefits kick in returned to 65 Mining - 15-per-cent Mineral Exploration Tax Credit extended for another year Parks - $42 million to develop Thaidene Nene National Park on Great Slave Lake and another park in Nunavut; $21.6 million to pave highways through Wood Buffalo National Park Education - $3.9 million more for the Northern Adult Basic Education Program to support delivery of adult basic education by colleges in the territories Source: Federal budget

Federal Finance Minister Bill Morneau's budget projects a $29.4 billion deficit in 2016-17 with no expectation of returning to a surplus within four years. That breaks an election promise to keep deficits around $10 billion.

For the North, there's an increase in the maximum daily residency tax deduction to $22 from $16.50 to address the cost of living. The measure will be effective Jan. 1 and is expected to cost the federal government $255 million over five years. Liberal NWT MP Michael McLeod said he's pleased the budget followed through on commitments to help the North.

Territorial Finance Minister Robert C. McLeod (not related to the MP) said in an e-mailed statement he's pleased with the change.

"This will put money in the pockets of Northerners," he stated, adding he needs more time to examine the budget in detail.

Frame Lake MLA Kevin O'Reilly said he is glad to see the change to the tax deduction but said it "is rather disappointing" the deduction won't be indexed to keep pace with inflation.

Kam Lake MLA Kieron Testart, who was Michael McLeod's campaign manager during last fall's federal election, called it a "refreshing" and "ambitious," budget and wants the territorial finance minister to follow suit.

"I sincerely hope that our government takes notice of that," Testart said. The territorial budget is expected in late May or early June.

"It's actually a pretty good budget that I think will be good for the North," said Yellowknife Chamber of Commerce executive director Deneen Everett, pointing to continuation of CanNor funding as one of the highlights.

However, she said the chamber is disappointed with the Liberals deferring decreases announced by the Conservatives to the small business tax by 0.5 per cent per year until 2019 to nine per cent. It will now be 10.5 per cent.

"I think that's a hit to small businesses that were expecting to pay less taxes over the next few years," she said.

The budget touts spending on First Nations for "transformational change" to socio-economic conditions. The funding includes $40 million over two years for a national inquiry into missing and murdered indigenous women.

Many of the commitments in the budget simply refer to First Nations or northern communities, so some of the specifics for NWT were not immediately clear.

Liberals will spend an additional $1.2 billion on First Nations, Inuit and northern communities.

That includes $732 million over two years for housing needs on reserves and in Inuit and northern communities.

About $12 million will be spent in the Northwest Territories over the next two years for housing.

"That's something that I heard lots about through my campaign in almost every community," Michael McLeod said Tuesday.

A further $10.4 million over three years is for renovations and construction of new shelters for victims of family violence in First Nations communities.

Indigenous and Northern Affairs Canada will get $10.7 million over two years for renewable energy projects in communities that generate power with fossil fuels.

The Liberals plan to spend $120 billion over 10 years on infrastructure. There are two phases of spending: First adding about $6.8 billion more than what's already on the books over the next two years for public transit, water, waste management and housing infrastructure.

That's followed by bigger projects to shift to a low-carbon economy in the second, eight-year plan.

Details of the second part will be revealed next year, the budget states.

O'Reilly said he would like to see infrastructure spending for building a Northern university.

"I think there's certainly a large infrastructure deficit but I don't think we should be investing in roads to resources," O'Reilly said.

The budget was short on specifics for what phase one will mean for the territory but it states municipalities in the NWT are eligible to get $320,000 for public transit.

The budget commits an additional $111.8 million over two years in the Homelessness Partnering Strategy, which is the fund Yellowknife is tapping for its housing first plans to move people from emergency shelters into housing.

Among the budget items affecting seniors: the Harper government's increase to the eligibility age for Old Age Security and Guaranteed Income Supplement benefits to 67 from 65 has been scrapped. It will remain at 65. The government also committed to continuing discussions with the provinces, territories and the public on enhancing the Canada Pension Plan.

Merlyn Williams, president of the Yellowknife Seniors' Society, said the budget's provisions for seniors does not take into account the high cost of living here.

"People who come up with these ideas live in little offices and don't know the demographics of the country of Canada," he said.

The budget has a series of other plans for the North.

Given the "challenging time" for small mineral exploration companies, the budget extends the 15-per-cent Mineral Exploration Tax Credit for another year at a cost of $20 million.

Testart said he was pleased to see that.

"We have it for an extra year so our government needs to be mindful of that because exploration is key to our financial success," he said.

Everett, with the chamber, also was happy with that.

"I think that's really great and hopefully we'll get some more exploration and new mine development," she said.

More than $42 million will be set aside for developing a Thaidene Nene National Park in this territory and another proposed park in Nunavut.

The Liberals are also following through on what had been a Conservative election promise to pave highways through Wood Buffalo National Park. That's expected to cost $21.6 million.

There will be $19 million over five years to gather existing research and traditional knowledge of the Arctic environment and conduct new research, which the budget states will help assess the potential environmental impacts of future oil and gas activity in the Beaufort Sea.

The budget also allocates $3.9 million more for the Northern Adult Basic Education Program to support delivery of adult basic education by colleges in the territories.

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