Thank you, Madam Speaker. Yesterday, we were witness to the 2014-2015 budget address. Like many, we heard the trumpets of fiscal balance, consecutive surpluses and, of course, the heralded no new taxes icing on the cake.
As Northerners, we have come to tolerate and unwillingly accept long discoursed narratives of cheap demagoguery and over-the-top rhetoric when it comes to our finances. Of course, it sounds impressive or if it’s in a colourful binder full of impressive graphs and pie charts, it must be accurate, right? Sadly, the people have limited options to believe otherwise as they are convinced the public budget process within our unique consensus government must be the result of hours of collaboration, crafted together in a collective effort with input from all independent elected representatives.
Sadly, Madam Speaker, I must reaffirm to you and the people, this is and was not the case for this budget. If collaboration was to be the guiding principle on such a project, then this budget was indeed far from such pillar of excellence.
In fact, the process for this budget scrutiny shied away from the normal practice, solely to accommodate the devolution process. In its place, Members, handicapped with little information, received an extremely watered down version of what is normally shared by departments, and somehow we were expected to provide comments after the fact. To hear the Finance Minister say that this was a collective budget with collective effort begs some degree of skepticism from this side of the House as we discuss the budget over the next couple weeks.
Changing gears, I want to speak to this Moody’s Investors Service grade the department keeps reminding us about. Most people don’t even know what this means, and I can assure you the Department of Finance is banking on this. In fact, little known is that Moody’s played an integral part in an event you may have heard called a subprime mortgage meltdown in the United States. To be clear, Moody’s committed no crime or infraction, but one cannot overlook the stance Moody’s rating system of AAA ratings and the confidence they gave to investors on mortgage-backed securities when the roof caved in. Whether you are an investor or a taxpayer in the NWT, we still must ask ourselves, should we solely trust what is supposed to be analytically sound, unbiased, and supposedly a conflict-free determination from an organization that is paid for by the issuer? Fair question.
We can only hope utmost integrity and not influenced determination in our credit rating assessment is indeed the case. But truth be known, ask any economist and they will tell you this same story. When we hear from our finance team that we have a sound fiscal management Aa1 credit rating for Moody’s Investor Service, I would hope everyone stops for a second and asks the appropriate questions when this is used to justify our upcoming $1 billion MasterCard application.
Moving on, it would appear from yesterday’s budget address that we have money hiding in jars all over the House. In fact, we were told numerous times of an operating surplus of $200 million after infrastructure contributions and deferred maintenance are considered. This sounds impressive, and indeed it is; however, what is less emphasized is that this money is already spent to fund the $223 million capital investments we approved here last fall in the House. To be clear, we do not have jars of money lying around, and we are adding more debt to our $800 million Visa card to cover these shortfalls while leaving a little less than $100 million in our Hawaii travel fund.
Now, speaking of travel, wasn’t it nice of the Finance Minister to take time out of his busy schedule to speak to so many residents throughout the NWT on his recent budget dialogue we like to call the dog and pony show. That was quite the production, wasn’t it? Was it not interesting that through his telekinetic powers he was able to somehow justify his government’s position by reaffirming 5 percent of the resource revenues from devolution into the Heritage Trust Fund. If you stop and think this through, this was remarkable given that with only visiting six out of 33 communities in the Northwest Territories with 80 people attending or, as I like to say, 0.002 percent of the population, that the financial future of our children was established. This is almost biblical in design. But in all seriousness, and please mark my words, and I hope the words of many here on this side of the House, the 5 percent of resource revenues that this budget was built around to support Cabinet’s fiscal plan will not pass this side of the House, and I will take that to the bank.
Finally, by the revenue side of our balance sheet, it is clear that we are hopelessly dependent on our territorial funding formula for our government to function, and with our consecutive years of flat or declining population base, we are finally embarking on a people fundraiser.
We have heard a great many ideas out there, and for the most part, many sound promising. The bottom line: If we don’t fix our cost of living, I don’t believe we will see the 2,000 person lift that Cabinet hopes to achieve, but I do wish them luck. However, as insanely dependent our revenues are on population growth, we cannot ignore or undermine the little line quoted yesterday, “…despite declining tax revenue growth.” At first listen it just gets whitewashed within the 12 pages of the budget address; however, as residents will come to realize in the weeks to follow and through the review of public accounts, we will see how close this government is to what I call the “wall of worry” when it comes to our finances and when it comes to our revenue management forecasting of our personal and commercial income tax. So, stay tuned as we are not as financially sound as we are all led to believe.
I could continue at arm’s length, so I will close with this: We the people are potentially left at the mercy of Cabinet and at the convenience of a select few financial decision-makers when it comes to this flawed budget process, and because of this, the politics of our financial health and well-being will be subject to great debate. Therefore, I entrust that Cabinet and the Minister of Finance will heed to reason and support Members on this side of the House when it comes to doing what is right and not what is easy in the days to follow.
