GNWT needs $150 million: minister
Either cuts need to be made or revenue must be increased, says Robert C. McLeod
John McFadden
Northern News Services
Monday, February 22, 2016
SOMBA K'E/YELLOWKNIFE
The territorial government must recoup $150 million over the next five years if it wishes to avoid fiscal disaster, Finance Minister Robert C. McLeod told MLAs on Feb. 19.
Robert C. McLeod: Finance minister says unless new revenue streams are found, cuts in government spending are inevitable. - |
Not doing so will lead to increasing deficits and mounting debt, the minister said.
"Unless we bring our spending into line with the money we are bringing in, we will have to start borrowing just to fund existing programs and services," said McLeod.
"That's bad fiscal policy and can't be sustained. The GNWT operating surpluses will start to decline, resulting in a small operating deficit position by 2019-20. Put another way - unless we find a way to curtail our expenditures or grow our revenues by approximately $150 million over the next five years, the GNWT will continue to use short-term borrowing to pay for operating expenditures and to finance infrastructure investment."
McLeod did not say what programs, services or jobs may be on the chopping block. He did say raising taxes would do more harm than good and is not an option. To make matters worse, the government's operating surplus has taken a multi-million dollar hit due to forest fires and low water levels in the hydro-electric system.
"Consequently, the $147-million operating surplus projected in the 2015-16 budget is now projected to be $69 million, a $78 million decrease."
McLeod announced he will table a document during this session on possible options to increase the government's revenues but warned, "The paper does not provide any new information or alternatives than those provided to previous assemblies."
Nahendeh MLA Shane Thompson said it is too early in the process to speculate on exactly what any potential cuts might mean.
"It's proposed and ... We haven't seen what the proposed cuts are," said Thompson. "We as ordinary MLAs will have to look at it and see if there are alternative ways of working to make it less than whatever it is right now. It is probably going to impact the whole territory. If you are going to say it's doom and gloom, then people are not going to want to be in the NWT. I don't think it is doom and gloom. I know we have some challenges like the rest of Canada and we need to look at opportunities to make this a place where people want to live."
During his address, McLeod also announced a wage freeze for some of the government's highest paid employees.
"The GNWT has started doing its part by making the difficult decision to freeze any economic adjustments to the salaries of deputy ministers, senior managers ... for two years starting in 2016-17," said McLeod.
That would include executive assistants, human resource professionals and government lawyers - roughly 850 employees in total. Deputy ministers make between $175,000 and $268,000 a year, according to the Department of Human Resources.
The wage freeze would not affect the majority of the 4,000 government employees who are members of the Union of Northern Workers. The government and the union are currently negotiating a new collective agreement.
