A perfect storm is brewing between the Northwest Territories government and 3,900 of its workers represented by the Union of Northern Workers.

The two sides are negotiating a collective agreement to replace one that expired nine months ago. The last time they were at the bargaining table was three months ago, and they probably won't be talking again until February.

At the time talks broke off, the union said it wanted time to consult with its members. Earlier this month it held two meetings in Yellowknife and one in Hay River. As those meetings got underway, the union published a brochure with some results from a survey of members thoughts about the negotiation.

Todd Parsons and Shaleen Woodward

Todd Parsons, the president of the Union of Northern Workers, with Shaleen Woodward, a negotiator for the territorial government. The last time they were at the bargaining table was three months ago. (CBC)

Entitled "What Members are Saying," it includes blurbs apparently quoting members' responses to the survey. Three say they are in favour of strike action if the government does not budge from its offer of no wage increases for the first two years and increases of one percent each of the third and fourth years. Others say they will move south if their economic circumstances do not improve during the negotiation. 

According to an official at the union, president Todd Parsons was attending to a family matter and unavailable for an interview. A government official said the Minister of Human Resources, Robert C. McLeod, was on vacation. The government's lead negotiator was out of town and also not available.

It was clear from the last fiscal update given by McLeod, who is also finance minister, that the government plans to cut operational spending.

"The work leading up to the 2017-18 budget will be critical to accomplishing our fiscal strategy objectives and putting us on a fiscally sustainable path going forward," McLeod said.

Growth of Government

There's no question the growth of the territorial government has outstripped the growth of the population it serves.

According to figures gleaned from the government's budget documents, the territorial government now spends 47 per cent more on wages, programs and services than it did 15 years ago. During that time, the number of government employees increased by 26 per cent. Devolution accounts for six per cent of that staffing increase and four per cent of the spending increase.

During those 15 years, the population of the N.W.T. grew less than 10 per cent.

The growth of government is not a good thing for the private sector. Mike Bradshaw, executive director of the N.W.T. Chamber of Commerce says the growth of government cuts into private business in ways that go beyond increased taxes.

Mike Bradshaw

'If you continue to take everything in house, there’s nothing left for the private sector,' says Mike Bradshaw, executive director of the N.W.T. Chamber of Commerce. (Mitch Wiles/CBC)

"A lot of the professional services the government is hiring for and has hired for — things like communications, web designers, engineers — all those services are available in the private sector," said Bradshaw. "If you continue to take everything in house, there's nothing left for the private sector."

Bradshaw says that over the last five years, the number of small and medium-sized businesses in the N.W.T. has dropped by 27 per cent. He says when government wages go up, it makes it even more difficult for private businesses to attract and retain staff. Bradshaw estimates that, on average, government wages are about 30 per cent higher than private sector wages for the same work.

No jump in revenues ahead

As McLeod pointed out in his fiscal update, there's no reason to think government revenues will be going up anytime soon. In fact, new population figures show they will likely be going down.

This week Statistics Canada released the latest population numbers for the N.W.T., showing that during the 12 months to Oct. 1, the population decreased by 188 people. The Northwest Territories was the only province or territory in the country to experience a decline during that period.

In the three months leading up to Oct. 1, the N.W.T. population decreased by 265 people, the biggest quarterly drop in 10 years.

Population is one of the many factors used to calculate the annual grant the federal government gives to the territory. For every person who leaves, federal funding drops by about $30,000.

It was partly for that reason that, almost three years ago, the government introduced a five-year plan to increase the population by 2,000 people by 2019. Since the plan was introduced the population has grown by just 225 people.