Mr. Speaker, I move, seconded by the honourable Member for Range Lake, that Bill 45: Appropriation Act (Infrastructure Expenditures) 2022-2023, be read for the first time.
Mr. Speaker, I move, seconded by the honourable Member for Range Lake, that Bill 45: Appropriation Act (Infrastructure Expenditures) 2022-2023, be read for the second time.
This bill authorizes the Government of the Northwest Territories to make appropriations for infrastructure expenditures for the 2022-2023 fiscal year. Thank you, Mr. Speaker.
Thank you, Minister. Motion is in order. To the principle of the bill?
Question.
Question has been called. All those in favour? All those opposed? Any abstentions? The motion is carried.
---Carried
Bill 45 has had second reading.
Mr. Speaker, I move, seconded by the honourable Member for Range Lake, that Bill 45: Appropriation Act (Infrastructure Expenditures) 20222023, be read for the third time. Mr. Speaker, I would request a recorded a vote. Thank you, Mr. Speaker.
Thank you, Minister. Motion is in order. To the motion? Member for Frame Lake.
Merci, Monsieur le President. Look, I realize I'm the only thing standing between a pizza party and my colleagues here so I want to recognize and thank the Minister of Finance for the collaborative discussions that led to concurrence in Committee of the Whole to proceed with an appropriation bill, and I meant that.
However, this is the largest ever capital project for the Northwest Territories at $502 million. In short, we are overspending on capital and not spending enough on the right priorities, in my view.
There is a relationship between capital and our programs and services. It's called the fiscal responsibility policy that requires us to have an operating surplus on our operations side to spend money on buildings and big infrastructure. When we overspend big on capital, we have a lot less money to spend on programs and services for our residents. It's left us scrambling to find matching funding from the federal government. Even if the feds gave us free dollars, we still have to find the operations and maintenance money for large projects.
For example, the $14 million that Infrastructure is now scrambling to find for the upkeep of the Inuvik to Tuk Highway; or, the ongoing service payments for the Tlicho AllSeason Highway that will cost us more than $10 million a year for the next 25 years. All of which eat into our ability to pay for programs and services.
As to further evidence of overspending on capital, look at the 201920 public accounts where GNWT failed to comply with our own fiscal responsibility policy. GNWT overspent on capital by $32 million with no consequences. We cannot get a clear commitment from the Minister to review that policy in light of this overspending and/or the increasing reliance on P3s as a way to finance large projects.
In June of this year, the Finance Minister said, during the budget dialogue, "over the medium term the fiscal situation is unsustainable and projections show that the borrowing limit could be exceeded by 202425 even though the limit was increased."
In other words, we are spending too much on capital and not doing enough to raise revenues. The Minister said that we need to "generate more cash from operating surpluses to lessen the borrowing pressures." There are basically two ways to do that raise more revenues or slash programs and services to continue to spend on capital.
Let's look at the revenue side. The Finance Minister only released the revenue options paper two days before the budget dialogue after my many requests. In my view, this Cabinet is not serious about raising revenues. It gave away $21 million in revenues to Husky Oil in a significant discovery licence with zero dollars in rent over fifteen years. It rolled back the small business tax and did nothing to replace the $1.4 million a year in lost revenue.
I've been pushing for a fairness review of our taxation system for six years, to no avail. When I've suggested working with federal opposition parties to increase our portion of ownsource revenues under the devolution agreement, it has fallen on deaf ears.
We haven't yet come to a point where we are slashing programs and services as happened in the last Assembly. But the mysterious government renewal initiative will have to come up with millions of dollars of savings to stop us from hitting the debt wall.
We got a public fiscal update from the Finance Minister on September 15th. That presentation made a number of points that show we are on an unsustainable path. As I said before, we're not just on the edge of a fiscal cliff, we're over the side now. We're still in the early stages of economic recovery with a shifting workforce but we have lots of additional expenses including COVID and flood recovery. When temporary federal capital funding is removed, we are in a permanent deficit position. Debt has grown at a rate of 17.2 percent annually since 200809, almost four times the rate of revenue growth. Our ability to spend on capital will decrease dramatically and the Minister predicted it will be less than half what it is now in a couple of years.
I'm all for stimulus spending as part of economic recovery, but we don't seem to be able to get money out the door right now. I couldn't get a concise answer on what the actual carryovers are in the capital estimates but if it is anything like last year's capital budget, that was about 50 percent.
I asked in the last Assembly for carryovers to be tracked carefully so that we actually understand the reasons for that. I am not convinced that a system is yet in place to do that. Are we getting massive carryovers because we've maxed out our contractor capacity; the ability for our economy to do the work that the government intends to contract? Is it as a result of cash flow issues? Problems with our capacity to actually get the funding out the door? I don't know. We don't seem to have a good understanding of why carryovers continue to take place and seem to be on the increase. If you don't track it and understand the reason, we can't work on how to fix it.
I also wonder why we are rushing to spend money that we can't get out the door during a pandemic. At the same time, the procurement review is still underway with changes unlikely to be fully implemented during the 202223 fiscal year. Why rush to spend money now when we should change procurement to retain more benefits in the NWT from government spending?
Now, I want to turn to what spending Cabinet is proposing in these capital estimates.
It's my understanding that after a recent increase to the federal borrowing limit, we only have about $300 million left. How could we ever possibly hope to do the big infrastructure projects, whether it's the Mackenzie Valley Highway, the Slave Geological Province Corridor, the Taltson Expansion, when all we have left is $300 million? I just don't get it. We need to stop pretending we can ever do all of these and focus on only one if we must, and That should be the Mackenzie Valley Highway if it can be done in small sections where communities can actually benefit from the construction work.
The contract spending on the Slave Geological Province work over the last five years, and Taltson Hydro Expansion, shows that about 10 percent of the money actually stayed in the North. Why are we doing these projects if only 10 percent of the money is staying in the North?
The Finance Minister said in her opening remarks that we are going to spend $150 million on roads in the capital budget. That's almost 15 times the amount we are going to spend on new and renovated housing. I understand that there may be other federal funding not in the capital estimates for housing and that may be fixed in future versions, but we continue to spend more on roads than housing a lot more.
This is totally out of whack with our reality where 43 percent of the NWT dwellings in 2019 had at least one housing problem. Those problems relate to affordability, suitability, and adequacy. If that's not bad enough, core housing needs have actually increased by 11 percent over the last ten years. At last estimate, there are almost 1000 people on the waiting list for housing in the Northwest Territories. That's a shameful record that is perpetuated in these capital estimates. I fully understand that most of the capital funds for the NWT Housing Corporation flow through the main estimates but clearly we are not spending enough on housing to even start to make a difference.
Yes, there are some items I can and do support in the capital estimates, and those will undoubtedly bring economic and social benefits. However, I'm voting against this capital budget to send Cabinet a clear message to get our fiscal house in order. We've got two years left to steer this shipyard in the right direction, Get serious about raising some revenues, and start spending on real priorities like housing. And Mr. Speaker, I would urge Members on our side, if you can't vote against the budget please abstain and start to send that message to Cabinet on the other side. Merci, Mr. Speaker.
Thank you, Member for Frame Lake. Motion is in order. To the motion? Member for Yellowknife North.
Thank you, Mr. Speaker. We came into this Assembly and we had a pretty tight fiscal situation, and so I have a dream. I have a dream of leaving the next Assembly $100 million of room in their debt ceiling. Enough to pay for a bad forest fire season or a flood but probably not both, Mr. Speaker.
Mr. Speaker, we are on track to spend more money than any Assembly in history. We are on track to also add more debt than any Assembly in history. This budget is worth $500 million, Mr. Speaker.
And, you know, I actually have very little issue with the individual projects in here. You know, an NWT budget has never been voted down in the history of the Assembly. We are very much a rubber stamp institution when it comes to budgets. Sometimes some small changes are made in O and M but, in many ways, capital is the one thing people agree on. It creates jobs. It builds the economy. I understand the tendency to want to spend $500 million here. However, I think we have to understand how the capital budget works. It is a snapshot in time.
We are actually spending, when you total up all over the projects, well over $2 billion here, Mr. Speaker. This specific capital budget is about 40 percent funded by the GNWT, 60 percent by the federal government. That is good. But when you add up, there's some math I just cannot understand. I have tried, with the publicly available numbers here, but no matter how I crunch the numbers we are set to exceed our debt ceiling with the capital we are planning let alone other major infrastructure projects, let alone operations and maintenance.
Mr. Speaker, there's a couple things I want to speak to but one is my frustration with what is publicly available out there.
We all, in this House, have a copy of the acquisition plan. It can tell you the individual price of projects and what we're doing in future years. That's not a publicly available document so I can't actually speak to specific numbers of projects. But I would like the GNWT, just for one week, to try and operate with what is publicly available, and I think we would fix our transparency problem. If you go over to Yukon for instance, you can see their five-year acquisition plan. Every single project has the range of what they expect to spend on it. Every single project is then tracked and reported on once it is concluded. We asked our staff to try and track a project through the years in the capital budget, and it's next to an impossible task to tell you what the total cost actually comes out. Add on the fact that we often get sued and then settle with contractors, it's an even more impossible task to tell you what something actually ends up costing in the public accounting.
Now, Mr. Speaker, I think it needs to be clear that this capital budget means a cut to programs and services. That is what we are voting for today.
Down south, you could argue that there is an option to increase revenue. I don't think that is on the table in the Northwest Territories. We are not getting $500 million out of our citizens through taxes any time soon.
The extent to which it actually costs in the O and M is a question the Department of Finance could not answer with any clarity. I get it is a complicated question but the disconnect between our capital budget and our O and M budget leads us to, once again, math that simply does not add up to me, Mr. Speaker.
Mr. Speaker, I want to admit that I will be voting against this capital budget but I am a relatively cheap vote. I would have voted for this capital budget with five more million dollars in housing, permanent long-term funding for our housing infrastructure.
We heard the other day they have a $1 billion backlog in infrastructure. They spend $10 million a year, Mr. Speaker. At that rate, in a hundred years they will have got to their infrastructure backlog and we build houses to last about 40 years, Mr. Speaker. The math does not add up.
Mr. Speaker, this budget is also taking $2.5 million away from our communities. Priorities throughout this Assembly have been housing. People have to have a roof over their heads and our communities, the foundation of our society, have to be strong. This budget is actually removing capital money from our communities who are stretched so thin you can see through them.
Mr. Speaker, if those two things were to happen, you know, less than a half a percent of this total budget, I probably would have voted in favour but we could not even get an increase to the housing capital which is, in this specific budget, building zero new houses; or, our community infrastructure which, in this case, is actually removing $2.5 million.
Mr. Speaker, we know that we spend over $68 million a year on our roads, and we've heard from the Minister that is not nearly enough. We know that the breakdown costs for our deferred maintenance is $465 million. We allocate $5 million a year for deferred maintenance. That would take 90 years to catch up on our deferred maintenance backlog. At that point, every single asset in our portfolio would have to also be rebuilt. The math is not adding up. We are not maintaining what we have in any state.
We have an absolutely terrible track record of maintaining what we have, and I think it is very tempting to build new things. But until that math is there and until that responsibility is there, I believe we are setting future Assemblies and future generations up for failure to have more crumbling infrastructure.
This budget does not even get into the power corporation, which we know also needs billions of dollars to keep its infrastructure in a state where they can continue to provide power to the people of the Northwest Territories, Mr. Speaker.
Mr. Speaker, I know that this budget then builds certain human infrastructure and a great example is long-term care beds. We all know we need those long-term care facilities. But I still don't have a clear explanation on how we're going to afford them. Each of those beds costs hundreds of thousands of dollars to operate. We know there is a $120 million deficit in our health care system. And the department has committed to a stabilization plan which, to me, is actually just a vague term to meaning cuts to a health care system right now that is being held together with glue and strings and losing nurses at such a fast rate. So on one hand, we are asking our health authority to, you know, add tens of millions of dollars to their budget through long-term care. On the other hand, we are asking them to do a deficit reduction. Mr. Speaker, I believe that the fair conclusion there is that our health system is actually underfunded and perhaps the priority of this Assembly just has to be offer basic health care to people, Mr. Speaker. I am concerned we are on a path where that will be very impossible to do within our fiscal capacity.
Mr. Speaker, there are so many priorities in this House, and I don't think the hard work has been done to prioritize the capital.
I can't tell you how much the school in Colville Lake is going to cost; that's not a figure I'm allowed to say; that's not a figure the Minister will say publicly; but I believe that if we run the math on building a school of that size in Colville Lake, and we apply to all of the schools we need to build, we come to a number that is actually impossible. It's impossible to build schools of that scale in all of our communities, Mr. Speaker. I don't see how this math is adding up, and I don't have the public information to conclude that.
In this capital budget, we are building a line to Whati. I don't have a lot of issues to this project but I think this project makes the most sense if Fortune Minerals signs into a longterm power purchasing agreement and actually buys some power from us. That is about the only way we could justify the expense of this project. I know it's a goal to get communities off hydro. That is something I would like to see but I am being asked to vote for a transmission line without being told the total cost of it, without knowing whether we are actually going to sell power to Fortune Minerals, and without knowing the root of it.
I believe there is something going on where the Department of Infrastructure gets its money into the capital budget far easier than any program or service. I would really like to see the success rate of infrastructure going to FMB for those communities.
In this capital budget is money for community hydro. Apparently, we got it out of ICIP funding. Great. When asked about it, the Minister didn't even know what community it was going in. We are spending tens of millions of dollars and we don't even know where it's going yet. I don't understand how that gets through ICIP, how that gets through FMB, and how it now puts a tensofmilliondollar obligation on our budget without even knowing which community it is in, Mr. Speaker.
Mr. Speaker, that's not to say I don't support those projects. That's not to say I don't support community hydro. I would just like to see a bit more due diligence in connecting the capital budget to operations and management to an overall plan for our fiscal stability. I expect, and I hope, the next operations budget starts to make some cuts. There is at least $50 million in that budget I believe I could find to get us on a path. This budget is inherently linked being connected to the operations budget maintenance budget. I do not know what is planned for the next O and M budget but I suspect it is a status quo budget that will take us right up to our debt ceiling and well beyond that and put our next Assembly in the very difficult position of, day one, making hundreds of millions of dollars in cuts, Mr. Speaker.
I would like to see a meaningful plan with our Power Corp. I would like to see a meaningful plan with what is going on with our community infrastructure deficit, our own infrastructure deficit, our road infrastructure deficit. I believe we need to start maintaining what we have before we look into building more.
Mr. Speaker, I believe $500 million could be better spent. It could be better spent making sure our citizens have roofs over their heads and our communities have infrastructure. They have roads and sewer and recreational facilities that work, and they can provide a strong sense of community. I believe that is our priority. I believe it's insulting to pass this budget that builds zero new houses for the Housing Corp and actually takes money away from our communities, yet passes the single largest capital budget in GNWT history. And for that reason, I don't believe the work has been done, or the due diligence by this Cabinet, to actually take us where we need to be and I will be voting against this budget. Thank you, Mr. Speaker.
Thank you, Member for Yellowknife North. Motion is in order. To the motion? Member for Thebacha.
Thank you, Mr. Speaker. I'm all about economic growth, always have been. Very pro-business. A long-time resident. Born and raised here, you know, and I wish I would when we were going through the capital estimates to cost this budget and see by community. And when I see two MLAs from Yellowknife get up and I bet you I bet you 75 percent of these capital estimates is for the capital. And you have two MLAs from Yellowknife making those kind of comments.
I did not do that because I think if we're going to have economic recovery, Mr. Speaker, this is the way to go. I think they have to be more careful on the way the contracts are given out. I think they have to be more careful on the terms of the contract. I think they have to make sure that the money stays in the North. I am sure that we're going to have a new procurement policy, and those are going to make sure that our people are looked after in the North.
What comes out of this budget, there's a few extra buildings for regional centres and communities. We get the crumbs, always. And we're very happy with the budget because we know at least we're going to have some new buildings this time.
That hasn't happened in regional centres and communities for some time. And it disturbs me that it comes across this way when economic recovery is extremely important during this pandemic and, hopefully, we get through this pandemic.
Businesses are suffering, large and small. And it trickles down to the entire Northwest Territories. If you don't have business, you don't have no social programs.
I feel really strongly that, you know, when you talk about the negative part of rebuilding, it's not okay. You have to be in business. I've been in business for 50 years. The only way we put food on the table is because we were in business. We had to work really hard to do that. It wasn't given to us. There's lots of us like that in and also in Indigenous culture, you know.
Growing up, many of us my father had to go out on the land when I first grew up. I worked for 50 cents an hour when I was in high school in order to get a new sweater for school.
So there's a lot of disconnect when I hear people that have not been born here and gone through all those hardships in the North and making those kind of decisions on behalf of our own people.
I fully support this budget because there has to be economic growth in the business sector, in the wider sector of government. Mistakes are always made. Mistakes are made even in business. But you correct them and move on and learn from them.
And so that is the reason I will be voting for this budget. Thank you, Mr. Speaker.
Thank you, Member for Thebacha. Motion is in order. To the motion. Member for Hay River North.
Thank you, Mr. Speaker. Just bear with me because I have to use my computer for this one.
Mr. Speaker, after careful review of the budget, I would like to confirm that there are departments that I'm pleased with and those that are left wanting.
And I just want to make a point, is that, you know, I'm an Indigenous person, lived in the Northwest Territories all my life. I have worked blue collar jobs. I, you know, worked, you know, my way up. I know what it's like to have to put food on the table; you know, go without a wage. You know, I felt the bad times and I felt the good times. So, you know, I'm hoping that, you know, what I say has some bearing.
Mr. Speaker, we are about to come out of the pandemic with limited new capital projects that would ensure our northern residents and businesses will be put to work. Absent any new medium-sized projects, we may experience a period of reduced opportunities for small to mediumsized businesses that may well resonate into a period of stagnation in the NWT.
Albeit, we do have major project work being carried over from previous Assemblies such as the Mackenzie Valley Highway, Talston Expansion, and the Slave Geological Province Corridor.
These long-term projects will continue well into the 20th Assembly and beyond. These projects will provide some northern employment in the future but as with many of the larger projects in the North, will eliminate many of the small to medium or midsized businesses from participating.
Mr. Speaker, if we are to move out of this pandemic and move ahead as a territory, then we must make sure that we immediately identify and plan our short and mediumterm infrastructure needs. It is these projects that are the bread and butter of most businesses in the North. These projects support and aid in the continued growth of our communities.
Mr. Speaker, the federal government has provided stimulus dollars to continue to fuel the economy during the pandemic. This will come to an end and we, as a government, have failed in developing business plans needed to secure and back up any requests for securing sufficient project dollars. The lack of new capital projects in the budget raises a question: What has this government been doing for the last two years in respect to seeking federal infrastructure funding for the NWT?
We need to immediately identify infrastructure projects, develop plans, and meet with the federal government to request those dollars to fund projects. Here, we have failed.
Mr. Speaker, another issue is the lack of housing. This is a major stumbling block when it comes to employability in many of the small communities where jobs may be short term and seasonal. It is an issue when it comes to educating our youth. It is an issue when it comes to community health. It is an issue when it comes to addictions and mental health.
Mr. Speaker, housing is not only a matter for this or any government to solve. It is an issue that will need to be addressed through collaboration and buyin from residents, communities, Indigenous governments, and the private sector. But it also takes money.
Mr. Speaker, this government has access to federal programs that support new infrastructure. As example, the national housing coinvestment fund, for which two streams exist with northern proponents having access to both. These program dollars are meant to provide for new revitalized and affordable housing. The government needs to ensure the supports are available for anyone or any organization wanting to access these funds.
Some of the issues with increasing the public and private sector market in the NWT is partly due to untimely legislative requirements, not understanding community needs, access to land, supply chain issues, increased material costs, access to labor, transportation issues, over design of buildings, maintenance and repair costs.
To move ahead, we need to build partnerships and action in many reviews and studies that have been completed. We need to have shovelready housing projects that will provide much needed housing to many of our Northerners, residents in the communities outside Yellowknife. Here, we are falling short. We have houses on the books that should have been built this year and haven't been.
Now, Mr. Speaker, one significant component of this Legislative Assembly is the diverse view and interests brought to the table by all 19 Members. This diversity can be appreciated in the priorities of this 19th Assembly, some with competing interests but all important.
One sector that we need to focus and support strongly is the nonrenewable resource sector. This sector resources are untapped. The lands of the Northwest Territories hold vast resource of minerals, oil and gas. We have to work towards reducing the timeline from inception to production. We must have substantive agreements that ensure compensation to this government is certain and fair. We must make sure that northern businesses are positioned to participate, that residents are positioned to participate.
To access these resources, we need roads to these resources and must focus on the construction of the Mackenzie Valley Highway by making it the highest of priorities as it is the one that will have a major impact on the economy, a major impact on business opportunities, a major impact on jobs, and a major impact on cost of living for residents of the NWT.
Mr. Speaker, this budget is light on community infrastructure housing and resource development; however, I will vote in support of this budget because we got to move ahead and I just hope that the or the Ministers on the other side take note of what I said. Thank you.
Thank you, Member for Hay River South. Motion is in order. To the motion? Member for Great Slave.
Thank you, Mr. Speaker. Mr. Speaker, all I'm going to say is ditto to my colleague from Hay River South. Everything that he has spoken to is exactly the same things that I feel. We sit here and talk about large infrastructure projects but we also need to remember that there are a lot of small infrastructure projects, including a very important highway in your riding, Mr. Speaker, the Dempster Highway. So this is not just only I'm pleased, actually, to see a budget that does take into account that we need to build more infrastructure, that our lack of infrastructure is really putting us behind the 8ball in every department, in every sector, and we need to make sure that we are able to connect all of our regions and our communities. So I would actually like to take this moment to urge Cabinet to go back and ask for more infrastructure dollars but more for the smaller roads and such as well. We had at one point a discussion with the Yukon government about a joint ask around fixing the Dempster Highway so that it wasn't beautiful to one spot and then became a nightmare afterwards. We're going to be looking at more liability if that road continues to be on the way that it is. We will see deaths on that road. I can promise you that, if we don't get the money to fix it properly.
So I urge Cabinet to not only pass that I will be passing this infrastructure or this capital budget, but also that they need to get more money going and get that money out the door and get it out the door to Indigenous people, not people with just one employee in the North. Thank you.
Thank you, Member for Great Slave. Motion is in order. To the motion? Member for Kam Lake.
Thank you very much, Mr. Speaker. Mr. Speaker, I am supporting this budget. This budget has an impact on a lot of the people in the riding that I serve who are business owners and who are looking to continue to put food on their tables and the tables of the employees that they keep staffed and working for their businesses.
To me, I absolutely do agree with some of the words of the MLA for Frame Lake and the MLA for Yellowknife North in that the government does need to change the way that it's doing business. The way the government is doing business right now is not sustainable. But I don't feel that hampering the ability of northern businesses to attain contracts from the GNWT, which is our largest surplus of cash into our NWT economy right now, is the way to go about it. I feel that if we want to send a message, then we need to talk about how we vote come main estimate time, which is money that directly impacts the functioning of the GNWT and not the functioning of our businesses. Thank you.
Thank you, Member for Kam Lake. Motion is in order. To the motion? Member for Monfwi.
Mr. Speaker, thank you. I will be supporting this budget as well. I was going to abstain but realizing that we do need more infrastructure in my regions, and yesterday I said we have high unemployment rate, and I know there is going to be lot of jobs that's going to be coming up through these infrastructure. And I know I am aware that Whati people are paying for high power rates. So Whati transmission line is on there. But it would be nice if we can have more money invested in mental health, addiction, and housing. And I think as a government, we can do more to get more money from the federal or, you know or partner up with other organizations as well. So thank you, Mr. Speaker.
Thank you, Member for Monfwi. Motion is in order. To the motion?
Question.
