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SOMBA K'E/YELLOWKNIFE - Finance Minister Michael Miltenberger unveiled his first budget Thursday, announcing the territorial government will borrow up to $81 million this year - to be paid back before the next fiscal year - to fund its ambitious $246 million capital infrastructure plan.

Total expenditures: $1,201,592,000 Last year: $1,189,533,000 Forecasted revenues: $1,300,803,000 Last year: $1,258,575,00 Borrowing debt: $81 million New initiatives $246 million in infrastructure next year including $58 million for highways and roads, $74 million in school replacements and renovations, $17 million for airport and runway improvements, $19 million for hospital and clinic renovations, $4 million for improvements to parks $61 million for communities (nine per cent increase) $60 million over four years for energy initiatives $4.4 million for arts, culture and to promote the NWT as a place to live and do business $3 million on commercial Territorial Power Support Subsidy Taxes Tobacco tax: cigarettes up $11.20 per carton effective April 1, 2009 Liquor tax: liquor, wine and beer marked up 10 per cent Property tax: Select mill rate increases to generate 15 per cent more revenue By department (this year/last year) Legislative assembly: $15,650,000/$15,364,000 Executive: $11,891,000/$12,567,000 Human Resources: $35,079,000/$32,253,000 Aboriginal Affairs and Intergovernmental Relations: $6,807,000/$6,500,000 Finance $74,875,000/$83,485,000 Municipal and Community Affairs: $86,229,000/$82,441,000 Public Works and Services: $56,136,000/$58,182,000 Health and Social Services: $313,027,000/$308,872,000 Justice: $93,488,000/$93,047,000 Education, Culture and Employment: $299,631,000/$293,878,000 Transportation: $97,060,000/$96,465,000 Industry, Tourism and Investment: $50,870,000/$46,019,000 Environmental and Natural Resources: $60,849,000/$60,370,000

Miltenberger said this spending will stabilize the territory's economy - 50 per cent of which is dependent on the resource sector - as exploration is drying up and mines are scaling back operations as commodity prices nosedive.

"A serious economic downturn is not the time for governments to reduce overall spending, even though tax revenues may be decreasing," he said.

"Government spending can provide the economic stimulus needed to maintain employment and sustain economic activity until the private sector can recover."

Territorial spending is up to $1.2 billion, but expenditures increased only by two per cent, lower than the six per cent average growth experienced over the past eight years.

Revenues are also up 3.9 per cent to $1.3 billion. Federal formula funding accounts for $59 million worth of new revenue as Canada now gives the NWT around $25,000 per resident, up nearly $3,000.

The NWT's GDP is forecasted to shrink by 1.3 per cent, which marks the second consecutive year it's expected to drop.

Although the government will borrow $81 million this year, finance officials explained the government was not considered to be running a deficit as the money would be used to fund capital projects, which are thought of as assets. Had the money been devoted toward funding programs or services, the government would then be considered to be running a deficit.

Times are tough and they will only get tougher for smokers and drinkers.

As part of revenue raising measures, the NWT's 2009-10 budget increases the price of cigarettes by $11.20 per carton while liquor, beer and wine prices will rise 10 per cent. The new taxes come into effect April 1 and, with other initiatives, will generate an estimated $7.3 million.

Miltenberger explained the sin taxes as both a revenue generating measure and an incentive for healthy living.

"At least half or 60 or 70 per cent of our health care costs are driven by personal choice decisions: alcohol abuse, smoking, the poor diet, the lack of exercise," he said.

"If there is an added cost to tobacco and alcohol, that is absolutely fine with me."

He said the taxes haven't been touched since 2003.

The government will also look at generating 15 per cent more revenue in property tax rates from mining, oil and gas and pipeline properties.

Kim Truter, president of Diavik, said anything which raises the cost of doing business was "not nice to hear."

However, he said he was very supportive of infrastructure spending, which he said could lower "the cost of operations."

Gord Van Tighem, president of the NWT Association of Communities, was pleased to see a nine per cent increase in funding to communities, bumping it up to $61 million.

He said this optimism was offset by increases in property taxes to the mines.

"The more it costs to operate, the shorter the life of the mines and the shorter they are contributing to the economy," he said.

Miltenberger said of the 140 positions eliminated last year, only 14 people lost their jobs. As part of last year's announced government reductions, 14 GNWT employees will lose their jobs this year.

Gayla Wick, representing the Union for Northern Workers, said she hoped the government would find positions elsewhere in the public service for the 14 affected employees.

She called it a "reasonable budget, due to the economic times in Canada and we are facing across the North."

In an interview, Miltenberger said this was the "greenest budget" in his memory.

It commits $60 million over four years toward alternative energy initiatives to move communities away from diesel fuel, which would reduce the cost of living and decrease greenhouse gas emissions, he said.

The budget calls for planning for hydro projects in Whati and Lutsel K'e, a transmission to link Fort Providence and Kakisa with the Hay River power system and $1.8 million to install wind turbines in Tuktoyaktuk.

Ecology North's Doug Ritchie agreed the budget was positive from an environmental standpoint.

Residents will also see the budget's impact at the grocery store. Beginning this fall, a 25-cent levy on plastic and paper single-use bags will be implemented.

Milk containers will soon be included in the territorial Beverage Container Program beginning this year.

"I don't recall in my time in the NWT seeing $15 million per year devoted to alternative energy projects," he said.

Also announced was $475,000 in funding for police officers in Fort McPherson, Fort Good Hope and Fort Liard, while increasing policing services in communities that don't presently have permanent RCMP officers.

On Friday, Hay River South MLA Jane Groenewegen and Kam Lake MLA Dave Ramsay both said they thought Miltenberger had put together a good budget.