Richard Gleeson
Northern News Services
Yellowknife (Jun 11/01) - The territorial government's financial picture is $80 million sweeter than it was a year ago.
In an update to the legislative assembly last Wednesday, Minister of Finance Joe Handley announced the $12.3 million deficit initially projected for the 2000-01 financial year has been revised upward to a $60 million surplus.
And this year's financial picture is expected to be $10 million better than the $1.7 million surplus projected six months ago.
The main cause of the rosier outlook is a reinterpretation of part of the formula used to calculate the annual federal grant that typically accounts for 60 per cent of the territorial government's revenue.
But Handley cautioned the good news is not good enough.
"Our expenditures for programs and services still exceed revenues," Handley said. "If we carry on the way we're going now, we'll just go broke."
Handley said the improved fiscal outlook provides a degree of flexibility it would not have had if the original projections held true.
He said that flexibility allows the government to introduce programs aimed at preparing northerners for jobs that mega-projects such as BHP, Diavik and a potential pipeline bring.
Statistics point to an economy that's quickly gaining momentum economy that is quickly gathering momentum.
The government estimates $1.1 billion in construction will occur in the NWT this year, almost twice as much as last, much of it at the Diavik mine. Both retail and wholesale trade are up, said Handley.
Handley said strong demand for non-renewable resources such as gas, oil, diamonds and other minerals will continue to fuel economic growth.
Hydro electric energy is another source of potential economic growth, said Handley.
The Finance Minister said the key to long-term economic well-being is control of resource royalties. The government estimates royalties, exclusive of corporate taxes, will average $340 million per year over the next 30 years.
