SOMBA K'E/YELLOWKNIFE
After two consecutive years of restrained spending Finance Minister Michael Miltenberger unveiled a budget intended to "show the fruits of our fiscal responsibility."

Minister of Finance Michael Miltenberger shows off his shoes ahead of Wednesday's budget speech. Miltenberger purchased a pair of new shoes for the announcement of the budget, which included a request to raise the debt ceiling by $1 billion. - Cody Punter/NNSL photo

"Two years ago this assembly set out to restore fiscal balance, protect programs and services, and responsibly fund infrastructure investment. We achieved this in the last two budgets," said Miltenberger, during his budget address at the legislative assembly on Wednesday.

"Thanks to that discipline, we are in a strong fiscal situation to embrace new program responsibilities," he added, pointing out that the government has been able to support $100 million in capital spending as a result of three consecutive years of surpluses.

Despite a $146 million spending increase, the $1.6 billion dollar budget projects a $200 million surplus.

The minister also called for the debt ceiling to be increased by $1 billion to $1.8 billion in order to partially tackle the territory's $3 billion in infrastructure needs.

The territory's debt ceiling was increased to $800 million from $575 million in 2012. The current budget is expected to increase the territory's total debt to $658 million, up from $624.5 million in 2013.

MLAs question debt ceiling

Yellowknife MLAs Darryl Dolynny and Robert Hawkins joined several other members of the assembly in questioning the call to raise the debt ceiling, especially since the government is reporting a $200 million surplus.

Hay River South MLA Jane Groenewegen, however, said that raising the debt ceiling would not be detrimental so long as future investments in infrastructure are strategic and well planned.

"I don't think we need to spend an extra billion dollars but I do think that we have an infrastructure deficit," said Groenewegen.

The expansion of the GNWT'S responsibilities as a result of devolution come with $67 million of new federal money of which $59 million will cover the costs of a new lands department, as well as beefing up existing ones. The remaining $9 million will be held in reserve in the event of unforeseen expenses.

The government will be receiving another $60 million from the federal government at the end of 2015 as percentage of shared resource revenues after devolution, with 25 per cent of that money being earmarked for aboriginal governments.

As expected, the GNWT plans to transfer just five per cent of the resource revenues to the territory's Heritage Fund, much to the dismay of several MLAs, who called for the number to be closer to 25 per cent.

"There was range and we had to make a choice," said Miltenberger of the decision to set the amount at five per cent.

Despite the boost from the transfer of funds from the federal government, Miltenberger said the government is anticipating a $30 million shortfall in personal and corporate income tax revenue as a result of declining population.

Instead of raising taxes, the minister announced an initiative to attract 2,000 people to the territory to increase the tax base over the next five years through a combination of infrastructure investment and employment incentives.

Groenewegen, who said she will make a point to address the territory's declining population during the current session of the assembly, said the target is ambitious but worthwhile if it can be achieved.

One notable item to be included in the budget was a three-year plan for publicly-funded junior kindergarten across the territory.

The initiative will begin with an allocation of $1.8 million toward setting up the programs in the territory's smallest communities. The service is expected to be offered in Yellowknife as part of the 2017-2018 budget.

Significant funding will be allocated to housing and addictions programs, including a three-year $22.6 million commitment to add 169 rental units in smaller communities.

There was also $680,000 dedicated to running transitional housing in four communities which contain public housing units only.

Lyda Fuller, executive director of the YWCA, said the funding would help alleviate housing issues in both the communities and Yellowknife.

"We get a lot of people coming in from the small communities so this will be big boon," said Fuller.

Budget highlights

• $27 million for the creation of a new Lands Department as part of devolution
• $2.6 million for addictions and community wellness programs
• $515,000 for expansion of midwifery programs in Hay River
• $5.4 million in energy initiatives, including $1.4 million to connect Whati to the Snare Hydro System
• $1.8 million reallocated to expanding junior kindergarten programs in the 27 smallest communities in the NWT.

Source: GNWT 2014 budget

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