Debates of November 2, 2022 (day 131)

Date
November
2
2022
Session
19th Assembly, 2nd Session
Day
131
Members Present
Hon. Diane Archie, Mr. Bonnetrouge, Hon. Paulie Chinna, Ms. Cleveland, Hon. Caroline Cochrane, Mr. Edjericon, Hon. Julie Green, Mr. Jacobson, Mr. Johnson, Ms. Martselos, Ms. Nokleby, Ms. Semmler, Hon. R.J. Simpson, Mr. Rocky Simpson, Hon. Shane Thompson, Hon. Caroline Wawzonek, Ms. Weyallon-Armstrong.
Topics
Statements

Question 1286-19(2): GNWT Fiscal Deficit

Thank you, Madam Speaker. As I stated earlier today that this government's financial position is in dire straits. Without new revenues, austerity measures are a likely outcome for the future years. As mentioned earlier, simple math. I believe it's time to be honest with our residents about this reality here in the Northwest Territories today.

Madam Speaker, one of my question would be to the finance minister. Is this government planning to implement austerity measures, including cuts to services and jobs within the remainder of its term? Thank you, Madam Speaker.

Speaker: DEPUTY SPEAKER

Thank you, Member. Minister of Finance.

Thank you, Madam Speaker. Madam Speaker, I conducted the budget dialogues this past spring and summer. When I did so, I presented to any member of the public who was interested the state of our funding, funds, the state of our fiscal situation, including operating surpluses, operating and capital expenses. I've put those informations before the public and received feedback on how people would like to see us moving forward in this government, whether it's through trying to increase revenues, whether it's through trying to decrease expenses or, frankly, a little bit of both. So I do want to quite sternly combat the notion that we are somehow not being honest with the public about the state of public finances. I take issue with that. I don't take the Member to be suggesting that is me or that is, you know, anything other than a desire to have more information. That's how I'm going to take this question. So, Madam Speaker, with that in mind, I am not suggesting that there's likely to be significant reductions to the public service or to programs or services at this point or in the near future. There certainly is a business planning process, and Members do have opportunity to go through the business plans with their Ministers, relevant Ministers late in the summer as part of our annual budgeting cycle. But, again, similarly, that is why we do budget dialogues in the summer so that people are aware of what the financial situation of the government is throughout the fiscal year. Similarly, during this particular session and as we go into the capital planning, this year I introduced the opportunity to have a bit of a media scrum in advance of tabling the capital budgets so that, again, I could speak openly to the media about the state of our fiscal situation and what we are doing to keep it on track. There are a number of things we're doing. This is not time for a Minister's statement but there's a number of things that are keeping us on track so that in the medium term we are not facing quite the dire straits that is being suggested here. Thank you, Madam Speaker.

Thank you. Thank you, Madam Speaker. And thank you, Minister. If no such austerity measures are planned, how will the government manage its considerable fiscal challenges without clear resources/future revenues to offset spending deficits? Thank you, Madam Speaker.

Thank you, Madam Speaker. That works out quite well, because I get to now continue what I wasn't going to say earlier. But let me give a few of the comments that I have on that one.

Well, with respect to the notion that we are about to hit the fiscal or the debt ceiling, Madam Speaker, that has been a spectre over many a fine government. That is no longer the spectre because of the changes we've introduced to the capital planning process. By reducing the size of the capital plan to be more right sized, we are not running up against our debt ceiling. We've not had to take on as great a borrowing plan as we would have had to otherwise and as such, we will not be running up into that debt ceiling the way that we were forecast to prior to making these changes.

With respect more generally to our operations, Madam Speaker, we are, again, although this particular fiscal year we did lose some revenues because of the changes to fiscal, we didn't get capital transfers as those projects do move forward later in later years, particularly with the federal government, we still have obligations, those funds will come in. They're just coming in in later years. And similarly, territorial formula financing does catch up. We have had some revenue shocks, including the shocks of COVID, which were only last year, territorial formula financing will catch up, provincial spending went up over the last two years, territorial formula financing catches us up. So we actually are expecting our revenues to go up over the next couple of years. And that's in addition to the fact that there's a number of things, government renewal is underway, the procurement review is underway, you know, changes to the public service is underway, and the public sector, of course, remains a huge contributor to our economy. Thank you, Madam Speaker.

Thank you, Madam Speaker. Thank you, Minister. Madam Speaker, eventually cuts to services and programs will be required to manage spending without a miracle windfall well outside the government ability to plan. Based on current financial projects, can the Minister tell me when these cuts to programs and jobs will come? Will it be in 2023? 2024? Or 2025? When will cuts be required, Madam Speaker?

Thank you, Madam Speaker. Madam Speaker, there's no planned cuts. I have no announcement to make here. There's not a moment of, you know, I get to say here's what's coming next. The plans that are in front of the public, the plans that I put forward, whether it's in budget dialogues, whether it's with this capital plan, there's no cuts to announce. I can't predict the future. I couldn't predict a $100 million flood any more than I could predict COVID. But what I can say, again, is we are trying to do what we can from within to manage our fiscal situation, to try to maintain the strong public sector presence that we have in the economy. And then with that, Madam Speaker, I put my Minister of ITI hat on and say what are we doing to try to grow the economy because that then in turn will keep the fiscal situation more stable for the business sector, for the public, and of course, certainly impacting on the draws on our programs and also on the benefits that we do see from our limited own source revenues. So, Madam Speaker, that continues to be my focus, is what can we do to avoid the cuts by using all the other levers available to us. Thank you, Madam Speaker.

Speaker: DEPUTY SPEAKER

Thank you, Minister. Final supplementary. Member for Tu NedheWiilideh.

Thank you, Madam Speaker. I'm concerned that this government is looking at kicking this can down the road to future governments instead of adjusting these financial realities head on. Can the Minister tell us if this government's setting up the next Assembly to make unpopular financial decisions to avoid making them in an election year? Thank you.

Thank you, Madam Speaker. Madam Speaker, that's certainly not my intention. It may happen to be an election year coming up but at the present time that's still quite far away. And the way that the budget cycle works, the budget that we're preparing now is based on main estimates process where based on a business planning process that started back in June. Again, this is sort of full circle. The reason we do budget dialogues in the spring and summer is because that's when departments are actually preparing their materials going into the next year. And while I certainly have said in the context of why we have government renewal going on, that doing incremental budgeting has its downsides, it has an upside. And it has an upside which is there's stability within departments that is not tied to the political whims of any particular administration. Departments do need to continue to provide for fundamental programs and services to all of the residents of the Northwest Territories and the businesses of the Northwest Territories, and that is one of the upsides of incremental budgeting, is it provides that stability. So, Madam Speaker, I do not believe there's any political pressure on us to do or not do anything. Quite on the contrary. I think we are moving forward with quite a number of things. In fact, some of them that are going to only really see their fruits bear in the next Assembly, for example, government renewal. Thank you, Madam Speaker.

Speaker: DEPUTY SPEAKER

Thank you, Minister. Oral questions. Member for Thebacha.