Merci, Monsieur le President. The 20232024 Main Estimates present pretty much a status quo budget for this government. I am going to talk about what's in the budget, what should be in it, and also about some priorities for the next Assembly in terms of fiscal sustainability.
While I can support most of the spending, there are still some serious shortfalls and trouble is still on the horizon. Both shortterm and longterm debt continues to increase, and we remain very close to the debt limit. There is the largest operating surplus of the 19th Assembly at $178 million, but that is largely due to the scaled back overbudgeting on the capital side. This much healthier surplus comes despite slow growth in revenues, higher inflation, and unforeseen flood remediation requirements. The healthier surplus should also provide greater room for the spending associated with the issues and priorities identified by Regular MLAs.
It's unfortunate that input from Regular MLAs is not sought earlier in the process, something I've recommended for the last seven years I've been here. There should be a meeting between the Regular MLAs and the Finance Minister to share priorities and issues before the budget is developed.
There are some good initiatives in this budget, such as funding for the labour market supplement for some healthcare workers, which should be expanded, and more for recruitment as well. There is more funding for some nongovernmental organizations, apparently a 2.2 percent increase with a total value of $780,000. However, it's not clear why some departmental contributions and grants funding was not increased, and I will single our Environment and Natural Resources, Lands, and the Executive and Indigenous Affairs departments where there were no increases. About twothirds of the NGOs seem to be targeted for the increase but this should be applied to all of the contributions and grants provided by GNWT, especially during this period of high inflation. Better yet, we need a policy change to our funding arrangements that incorporates increases into multiyear funding arrangements to allow NGOs to continue to do the valuable work that makes the NWT a better place. The GNWT also needs to do a better job in disclosing, on an annual basis, all of the grants and contributions provided along with the organizations that receive them.
With this budget, the Cabinet will complete its very low and lessthanambitious commitment to increase funding by $5 million to make a small dent in the municipal funding gap. That $5 million probably doesn't even begin to cover the increases in that gap that have taken place since 2015. We can't even get a new calculation of the current municipal funding gap from Cabinet. This gap will continue to grow and will do so even more during 20232024 due to the carbon tax increases and the decision by Cabinet not to share any of those revenues with community governments.
I understand that the increased carbon taxes will cost community governments an extra $2 million in 20232024 and this will climb with further carbon tax increases. Taxbased municipalities will be forced to raise property taxes and smaller communities will likely cut programs and services to cope with the carbon tax increases. If GNWT is to continue the administration of a carbon tax, or receives carbon taxes from the federal government, we must share some of the revenues to cover these increased costs and treat the communities as if they were diamond mines.
And while I am talking about the diamond mines, Mr. Speaker, I remained unconvinced that GNWT is doing anything serious to support the workers at Diavik which is scheduled to close in 2025. I got vague statements from the Finance Minister last week that GNWT departments are at some meetings on the socioeconomic monitoring agreement. That's not good enough in terms of planning for economic transition. I would welcome any specifics on what we are doing as a government to help these workers but I don't see much in this budget that is likely to be of assistance.
A few other observations on the budget I would like to make:
The first is a $75 million bond issuance for the NWT Hydro Corporation. There are absolutely no details in the main estimates about this increase in debt and what this spending is actually all about. I am still waiting for details, Mr. Speaker. This Cabinet has failed to restore public governance to the NWT Power Corporation and our energy planning is, quite frankly, a mess. Crumbling and underutilized assets, reliance on big grids and old technology, no way of properly analyzing and disclosing tradeoffs, I can't begin to express how out of touch with reality this system has become. A new focus on energy selfsufficiency and smaller scale solutions is urgently required.
There are some interesting references in the budget and papers to a review of the fiscal responsibility policy that has failed to keep us out of growing debt and huge overbudgeting of capital projects. It appears the Minister has finally heard Regular MLA calls for the calculations associated with the determination of compliance or noncompliance with that policy that will now regularly be found in financial documents. We need more detailed financial reporting and accountability throughout the year to ensure that sound financial management continues. There needs to be some consequences for noncompliance with the fiscal responsibility policy and, at a minimum, a requirement for a plan to be made public to bring our finances back in order.
I am particularly concerned with this government's increasing reliance on publicprivate partnerships as a way to finance larger capital projects. There has been little to no analysis or disclosure of the impact this has had on our operating budgets as P3 servicing costs eat away into our ability to provide programs and services. There should be a firm cap on P3 servicing costs just as there on debt servicing as part of a renewed fiscal responsibility policy.
One would also think that something as important as the fiscal responsibility policy would go through some form of public engagement as we do with such mundane matters like the renaming of the Stanton Legacy Building, or a survey on liquor and cannabis products. I will pursue this further with a Member's statement and questions for the Finance Minister at a later date.
The Government Renewal Initiative appears to have ground to halt, and I've yet to see anything made public or much that is very useful. While I support the concept of program evaluation and review, this work cannot possibly find enough spending cuts to fund our unsustainable path when there is overbudgeting on capital, growing debt, and no willpower to raise more revenues.
I would like to turn to some future priorities that I will pass on to future Assemblies in terms of fiscal responsibility that I do not believe have been adequately addressed during the budgets presented in this Assembly.
Review own source revenues and undertake a fair taxation review
Increase the number of personal income tax brackets to five as seen in most other Canadian jurisdictions;
Increase own source revenues as much as possible in the territorial formula funding arrangement and work with federal opposition parties to make that happen;
Increase our resource revenues that have been characterized by world experts as some of the most charitable in the world. We are giving away our resources when we should be maximizing the benefits.
I will give some credit to the Finance Minister who appears to have listened to my concerns, and those of others, about the lack of transparency around the disclosure of resource revenues. For the first time ever, there is a statement showing the past and anticipated net fiscal benefit in these main estimates; in other words, what we actually get to keep from nonrenewable resource development. This is good but can be improved by separating mining and petroleum revenues. We should also be accounting for payments from the federal government for Norman Wells. Of course, we should go even further and disclose royalty payments from each facility as is already done in Quebec and elsewhere. Mr. Speaker,
Focus on Economic Diversification
There are lots of statements in the budget address, and the economic and fiscal reviews about the pending closure of the diamond mines with little prospect of anything similar on the horizon. The next potential mines are financially and environmentally risky, in many cases already fully licensed, and what is holding them back is financing and commodity prices which we have no control over. Past efforts at concerted economic planning and diversification in the NWT have largely failed. We need to focus on economic diversification and selfsufficiency by building greater food security and import substitution. In an uncertain world with a climate crisis, economic diversification and selfsufficiency will provide greater security for all our residents. Mr. Speaker,
Housing, Housing, and More Housing
Cabinet has promised 100 new public housing units over four years of the 19th Assembly. Nunavut will build that many this summer under its new plan. If this government is serious about economic development, poverty, reconciliation, and virtually everything else, people need safe and affordable housing. This needs to be the priority for the next Assembly. No more megaprojects over housing when Cabinet goes to Ottawa. Treat housing as the megaproject for the next Assembly.
The Climate Crisis
The current Cabinet continues to pussyfoot around the climate crisis or climate emergency. I would have thought that two successive years of extraordinary and catastrophic flooding would have convinced this government that we are now in the midst of a climate crisis that will change virtually everything we do. I think I have only once ever heard a GNWT senior staff person say "climate crisis" once.
Our government continues to fail on climate change mitigation and adaptation. Our public reporting is so convoluted that no one understands it. The only reason we may reach the old and outdated greenhouse gas reduction targets is because of the closure of the Diavik diamond mine. I will be watching very closely to see if the new Department of Environment and Climate Change actually uses the terminology of a "crisis" or an "emergency" and has the responsibility and tools to coordinate and lead GNWT's efforts. If this is not part of the establishment policy for the new department, this Cabinet will have failed again. This government needs to stop being part of the problem, acknowledge the crisis or emergency, show leadership, and make better decisions on mitigation and adaptation.
In terms of the budget process, I can say that the relationship and negotiations with Cabinet over financial matters has been respectful and fruitful, a much different and welcome change from the previous Assembly. I will be happy to work with my colleagues on this side of the House to push for changes to the current budget. We still have more work ahead of us to ensure that the priorities of Regular MLAs are more clearly reflected in the budget, but I am confident that working together we can reach a reasonable compromise and a better balance. Merci, Mr. Speaker.
