Tara Kearsey
Northern News Services

Yellowknife ( May 31/00) - Mayor Dave Lovell believes Yellowknife will not lose as much block funding as originally thought, but he's not getting his hopes up too high.

Municipal and Community Affairs Minister Jim Antoine recently announced the six tax-based municipalities in the NWT would see a 4.73 per cent reduction in block funding this year.

That means Yellowknife would have lost almost a quarter-million dollars in MACA block funding.

Municipalities were outraged at the announcement, given the funding had been allocated in budgets for the current year and would now have to be found elsewhere.

When the issue was discussed at the NWT Association of Municipalities annual general meeting last weekend, Antoine explained the reasoning for the grant cuts.

"It's not intended to offend anybody or anything like that. It's a tough decision that had to be made. I should have given you better notice earlier on in the process.

"Sometimes you have to make these tough decisions and this is one we had to make," Antoine said.

He explained the Financial Management Board had reduced the GNWT's capital budget by $10 million, and $1.3 million of that was taken from MACA's budget.

Antoine said the 4.73 per cent cut from municipalities' block funding will recoup $570,000. He added an equal amount had also been cut from grants given to smaller communities by deferring or cancelling their capital projects.

The Department of Municipal and Community Affairs has taken internal measures to deal with the $10 million loss as well. The decision has been made to not fill two deputy minister positions as a result of the budget shortfall.

Antoine said MACA's budget was scheduled to be reviewed Monday by the standing committee on governance and economic development. It will then be debated in the legislative assembly before the block funding cuts are implemented.

"I suspect there's a good chance they might restore some or all of the block funding," said Mayor Lovell. "That was just my feeling out of the (NWT Association of Municipalities) meeting, although I can't put words in (Antoine's) mouth."

If the cuts do in fact take effect, Lovell said city officials already have their eyes on which capital works projects could be cancelled.

"I would suggest that what will happen if we lose it is that we won't do road re-construction on Latham Island into Ndilo," said Lovell.

The city had planned to upgrade the road structure in the Hearn Hill Road and Otto Drive areas to accommodate it for a higher traffic volume.

Lovell said it's likely that project will be cancelled since most of the other capital works projects have already been contracted out.