Yellowknife (Oct 18/04) - After five years of increases in spending and public service jobs, the Government of the Northwest Territories is making a move to trim $20 million from its operating budget.

"Everything is on the table," Finance Minister Floyd Roland said in a recent interview.

"Until we work out a new financing formula and revenue sharing with Ottawa, we're going to have to shrink our budget."

Roland fretted about the Territories' diverging lines of revenue and spending when he presented his first budget last spring.

The Territories' "fiscal situation is serious," Roland said, pointing to the accumulated deficit that hovers near $300 million.

In the five years since Nunavut went its own way, Roland noted that operating costs are up $212 million, an increase of 6.7 per cent, while revenue has grown by just 4.3 per cent.

"We need to address this fiscal reality and bring revenue and spending into line," Roland said in his first speech as NWT finance minister.

"We need to agree on what is critically important and what is less important, to assure that what we are doing is sustainable in the long term."

Government employment and wages have been one of the areas of greatest growth.

Before division, 3,991 government workers administered the needs of 67,476 persons spread across the North. According to this year's budget, the GNWT has 4,741 employees delivering services to 42,274 residents.

Boards and agencies account for 559 of the 750 positions added to the government payroll since division.

Lew Voytilla, deputy finance minister, said the territorial government has taken over the operation of health clinics, social services and education in several communities.

Voytilla noted that there are new juvenile corrections facilities in Yellowknife and Inuvik, lowered teacher-student classroom ratios and more health care professionals.

"We've added a lot of frontline workers in health, education and justice," he said.

The year before division, the public service wage bill was $305 million. In 1999, it dropped to $252 million. This year government wage costs are expected to reach $425 million.

GNWT spending on operations and maintenance, which includes public service wages, is closing in on pre-division levels.

In 1998-99, the last budget before Nunavut went its own way, the territorial government spent $1.07 billion.

The most recent budget estimated operations and maintenance costs for 2004-05 at $950 million for the GNWT.

There have been only minor fluctuations in how the government spends money.

Health, social services and education continue to account for almost half the annual budgets in Nunavut and the Northwest Territories.

Voytilla attributes the growth in spending over the last five years to inflation and new programs.

"Since division, $175 million more has gone into health and social services programming," he said.

The territorial government also added $20 million for transportation; $20 million for infrastructure and $20 million for aboriginal affairs, which is taking the lead on devolution negotiations, he said.