Thank you, Mr. Speaker. Mr. Speaker, last Wednesday the people of the Northwest Territories and the Members of the 18th Assembly listened to the Finance Minister give his second budget address. It is astonishing how quickly our term in office is flying by. The speed that time is passing underscores for me the urgency of making meaningful changes now.
Today, in this reply to the budget address, I want to reflect on Cabinet's approach to the work at hand and the expectations held by Members on this side of the House. Most importantly, I want to reflect on the degree to which we are meeting the needs and expectations of the people who elected us to represent them.
As I am sure most people are aware, when the Members of the 18th Assembly took office, we agreed to work together on a mandate to guide this government's actions over the coming four years. The ability to do this is one of the advantages of our consensus system of government. As a caucus of 19 Members, we collectively identified the priorities of this Assembly. We agreed that these priorities would serve as the ultimate business plan, orienting our decisions and actions over the coming four years. From amongst ourselves, we selected a Premier to lead the government and Members to sit on Cabinet. We placed our trust in these individuals to meet the priorities we set, and we did it with the belief that, when moving forward, they would be guided by the roadmap we collectively established.
As a caucus, we also reviewed and in some cases modified the GNWT's draft mandate. The finalized mandate identifies the commitments made by the government to meet the priorities set out by the 18th Assembly. Why is it important to have a mandate to guide us? For one thing, it provides Members of this Assembly and the people we serve with a shared understanding of the progress we hope to achieve; in other words, transparency. It also sets out clear commitments that we can judge progress against, but, most importantly, it is a way for NWT residents to decide for themselves if their government is living up to the promises it has made. This is vital to government accountability, but, if the mandate is not really driving government decisionmaking, then really it is nothing more than window dressing.
As we enter this second year of our term and as I listened to the Budget Address, it has become increasingly clear to me that our mandate is not what is driving the decisionmaking of this government. Instead, it is Cabinet's fiscal strategy, one which was developed behind closed doors, that is dictating how the government moves forward. As an MLA and as someone who believed we were working collectively toward shared goals, I find this very troubling.
Mr. Speaker, the Finance Minister has told us the government has a threepronged fiscal strategy. Let me share those with you. One, increasing fiscal capacity by lowering our operating expenditures or increasing our revenues. Two, disciplined spending to ensure expenditure growth is aligned with revenue growth. Three, reducing our reliance on our line of credit as a way to finance daytoday operations.
Now, Mr. Speaker, I don't believe there is a Member in this House or a member of the public who would take issue with this approach. It appears at first glance to be the very definition of sound fiscal management, but let's examine each part of the strategy to see what the practical implications are.
First, what does it mean to have increased fiscal capacity by lowering our operating expenditures or increasing our revenues? If memory serves me, Mr. Speaker, the GNWT's revenues are expected to decline by almost 2 per cent or more in the next five years, owing mostly to decreased corporate income taxes and resource royalties and downward adjustments to transfer funds coming from Canada.
We have heard repeatedly from this government that our ability to raise additional revenues is limited. In fact, in March 2016, the Finance Minister tabled a revenue options paper which concluded, and I quote: "The few revenue options that could generate significant revenues would discourage business investment and economic growth and would leave individuals and families with less disposable income at a time when the costs of living are rising."
Lacking any real option for raising revenues practically speaking, that leaves us with only one option: reduce spending, lowering our operating expenditures as a means to increase our fiscal capacity. In one word, Mr. Speaker, cuts. This, as the Finance Minister pointed out in the October 2016 fiscal update, "requires us to make difficult decisions on what programs and services are no longer needed or that can be funded at a reduced level."
I agree 100 per cent that difficult decisions are required, but what I do not agree with is how those decisions are being made. I do not believe that these decisions are only Cabinet's domain. I believe that each and every MLA, representing the people who elected us, should have a real, meaningful hand in those decisions.
This, Mr. Speaker, appears to be the crux of the concern that Regular Members have over this budget. It highlights a fundamental difference of opinion about who is ultimately responsible for making the difficult decisions in a consensus government and that it ought not come from the fiscal strategy derived by a few, but rather, it must be driven by the voice of the people, which is in the mandate we 19 MLAs assembled.
In last year's Budget Address, the Finance Minister informed the public of the GNWT's target to cut spending by $150 million. Mr. Speaker, Members on this side of the House were notified that departments were tasked with identifying potential cuts, starting from $30 million, then $50 million, up to $75 million, and even $100 million. Almost before we knew it, and with no consultation, that $150 million figure became the chosen target, the only target, and the one that was enshrined in the budget.
It is a target I can assure you was not and has never been endorsed by Regular Members. When we asked why this target, we were told that these cuts were part of the GNWT's fiscal strategy and that they were necessary to ensure the government is in a cash surplus position by the end of the 18th Legislative Assembly. We were also told they were necessary to ensure the GNWT has a cushion of at least $160 million between the money it has borrowed and the limit of its borrowing authority, a limit of $1.3 billion set by the federal government. Again, Regular MLAs endorsed neither of these objectives.
We have objected strongly to this target and these objectives for a number of reasons. The key one is that they are simply too severe. I, for one, do not believe it is either responsible or prudent to attempt to wipe out a year-end cash deficit accumulated over a number of years and estimated at over $300 million in the life of this Assembly. We have asked time and time again to find compromise. Maybe one of those other fiscal reduction targets would have been a suitable compromise. Unfortunately, we never got to see what those options looked like.
While I believe that the government should work as efficiently as possible, I do not believe that undertaking a major government reorganization yet again is the way to achieve it, especially given that it will cut jobs and will most certainly result in the loss of families. These families, many living in my constituency, will be forced to look outside the NWT for work, taking with them approximately $30,000 per person in revenue that comes to the GNWT through federal transfer funding.
Mr. Speaker, what happened to the population growth strategy of the last Legislative Assembly? What happened to attracting 2,000 people to the North over five years? Have we deflated those efforts already? Although the government may improve their bottom line with this reorganization approach, the NWT's economic bottom line will indeed suffer, and this is not the time to impart more suffering.
Let me be clear, Mr. Speaker: This government reorganization was not included in the mandate. It was quietly introduced in the business plans in neutral, nonthreatening language, describing it as a zero-based review. The benign name given this initiative was, in my opinion, not unintentional. A deficit reduction measure by any other name is still a deficit reduction measure, and this one will still result in job losses.
As a matter of fact, the GNWT has a long and storied history of responding to fiscal challenges with restructuring initiatives dating back 25 years. In 1991, it was Strength at Two Levels, also called the Beatty Report, advocating the decentralization of power to local governments, an effort which is still a work in progress. That report was followed very closely by the 13th Assembly's fiscal restraint measures, which ushered in the deepest cuts to the public service to occur in the quarter century since the government moved from Ottawa in 1967. That restraint initiative was followed by more, including the 2001 Cuthbert Report recommending health and social services board reform and the 2003 Deloitte Touche review of the GNWT's departmental and headquarters organizational structure.
Now, we have the zero-based review, the details of which have not, unlike the others, been made public. This means that Regular Members and the public still aren't privy to the government's overall vision for a reduced public service. Whatever that vision is, it appears to have been designed without any analysis of the economic impacts associated with cutting jobs.
I will be frank, Mr. Speaker. I am discouraged by this government taking the easy route. Make no mistake about it; that is exactly what restructuring is, an instant gratification approach to budget reduction. Its appeal lies in the fact that Cabinet of the day can proclaim success by pointing to all the belt tightening it has done during the four years in office.
Mr. Speaker, making really tough choices would involve having the vision to address the root social problems driving up the delivery of costs of government programs and services such as poverty, addictions, low levels of education, high levels of incarceration, and poor health.
Mr. Speaker, these are the factors that contribute the most to increased expenses of our government, not the salaries and wages paid out to hard-working public servants.
Speaking of economic impacts, I would be remiss if I didn't raise my objection to the Department of Transportation's plans to create a so-called self-sustaining Yellowknife Airport by imposing an airport improvement fee of up to nearly $30 per ticket for NWT residents travelling south. This initiative is another example of something not included in the mandate, yet now deemed necessary by the GNWT to ensure that taxpayers are no longer subsidizing the airport by $4 million per year. Really? Taxpayers subsidizing public infrastructure? If taxes are not intended to finance public infrastructure, what exactly does government think they are for? I will note that, of the $4 million currently subsidizing the airport's operations, only $1 million of it is paid by Northern taxpayers, because we all know that 75 cents of every GNWT dollar comes from Canada in transfer funding.
Now we will be going from $1 million in northern taxes to $10 million in mostly northern user fees. That is driving up the cost of living for Northerners, no matter how you look at it. I will have more to come on this fee at a later date.
This brings me to the final part of this government's fiscal strategy, reducing our reliance on our line of credit as a way to finance day-to-day operations. We have heard the Finance Minister repeatedly admonish Members that the government relying on its line of credit to finance operations is like an individual maxing out their credit cards, and that it is something you wouldn't want to do with your own personal finances. I am getting mighty tired of hearing this old analogy.
I do agree with the Finance Minister to a point. No one would want to run their personal finances in a way that would see them undergoing unnecessary hardships to save money in the first two years of their financial plan so that they could spend wantonly in the final two. Yet, this is exactly the fiscal strategy that the Finance Minister is asking Members to buy into, one that would see job cuts and increased expenses for our residents, while we, as the Finance Minister would say, get on firmer financial footing so that the government can make investments in the mandate later.
From where I sit, this is nothing more than a thinly veiled strategy that will allow the government to cut now and spend more money in the run-up to the next election. I have to hand it to the Finance Minister for his enthusiasm to eliminate the GNWT's deficit in the life of this Assembly. If he is going to practise what he preaches and run his government like he runs his own finances, then he ought to know that you can't spend all of your income on the mortgage at the expense of feeding, clothing, and educating your kids.
As I conclude, Mr. Speaker, allow me to read you a quote: "Reducing expenditures to this degree when we are facing growing needs from our everincreasing population and our very real social problems has meant that we have to make some tough decisions. However, these decisions have been necessary to bring our expenditures in line with revenues and ensure the sustainability for the system in coming years."
This message sounds not unlike the message we heard from our Finance Minister last week. However, it comes from the Budget Address delivered in this House in 1997, 20 years ago.
Mr. Speaker, if we are truly going to put this government on a sustainable course, we do not need approaches that are decades old and have been announced in this House again and again. What the people of my constituency need are investments in people and investments in the mandate we collectively developed and promised to fulfil. What my constituents and the people of the North need and expect is balance and moderation in government saving and in government spending.
This is what sustainability means to me. It means consulting with Members in a way that implies a willingness to listen, to accommodate the input that is heard, and to reflect it in the decisions made. It means making strategic investments in the infrastructure projects identified in the mandate, which will power the engine of the NWT's economy. It means balancing these strategic investments with investments in people, ones that will significantly lower cost drivers associated with low levels of education, poor health, joblessness, and addictions, and will assist our residents to live happy, healthy, and productive lives.
Mr. Speaker, the Government of the Northwest Territories has made important investments in critical infrastructure projects in recent years, including the Deh Cho Bridge, the Inuvik to Tuktoyaktuk Highway, the Canyon Creek Road project, the Stanton renewal project, to name just a few. Over the same time frame, many systemic social issues have gotten far worse, not better. Big-ticket infrastructure projects are essential, and I support the investments that are made in them, but not to the extent and pace that it leaves our people behind.
Mr. Speaker, as the budget is currently presented, I find myself unable to support it. We cannot afford to wait for some magic day in the future when the deficit is wiped out before making investments in our mandate that better the lives of the people we serve. I intend to continue to fight for balanced strategic investments in our mandate, both in this budget and in those yet to come. Thank you, Mr. Speaker.
