Declining revenues lead to small surplus as N.W.T. gov't releases budget

The N.W.T. government is treading carefully into its next fiscal year, making modest investments in programs and services as a result of revenue decline from last year.

The government will be in a $53M revenue decline from last year, projecting a meagre $2M surplus

Finance Minister Robert C. McLeod, left, presented the proposed numbers for the Government of the Northwest Territories' 2018-19 budget, among reporters and government officials. (Randall McKenzie/CBC)

The N.W.T. government is treading carefully into the 2018-19 fiscal year, making modest investments in programs and services as a result of a $53 million year-over-year revenue decline.

Finance Minister Robert C. McLeod highlighted the need for "balance" as he prepared to table the proposed new budget Thursday morning.

"Our projected revenues haven't been as high as we had hoped," said McLeod. "There's less money for operating expenses, new investment in infrastructure and other priorities, and paying back debt."

Revenues are expected to come in at $1.749 billion, with expenses estimated to be $1.713 billion. After accounting for adjustments and capital costs, the government is expecting a surplus of $2 million.

The revenue decline is largely a result of lower-than-expected mining royalties, as well as lower income tax revenues and the end of some federal funding.

Since the start of the 18th Legislative Assembly in 2016, the government says revenues have declined by $84 million.

And, for the first time, the government's total debt has surpassed $1 billion — which includes short-term and long-term debt. The N.W.T.'s federal borrowing limit is $1.3 billion.

Finance Minister Robert C. McLeod, right, is interviewed by CBC's Randy Henderson after presenting the 2018-19 proposed budget for the N.W.T. (Randall McKenzie/CBC)

However, the finance minister expects things to improve next year.

Property taxes, a possible land transfer tax and job opportunities are some of the ways McLeod hopes the government will be able to boost funds.

McLeod added reductions made in the last few budgets have positioned the government well to deal with its revenue challenges this year.

"In one way I see this budget as a 'what if' budget," said McLeod.

"If we hadn't made the difficult expenditure decisions in the first two budgets, we would be forced to make serious changes in this budget to avoid the short-term borrowing trap without the advantage of careful consideration."

Despite the challenging fiscal situation, there are still some investments on the way.

Here are some highlights from the 2018-19 proposed budget:

  • $8.7 million in investments for the economy, including implementing an agriculture strategy, supporting mining and supporting Indigenous governments under the NWT Climate Change Strategic Framework.
  • $4.3 million for French and Indigenous languages.
  • $2.1 million for junior kindergarten.
  • $20.7 million for out-of-territory hospital and physician services, residential southern placements and Métis health benefits.
  • $6.9 million for long-term care facilities, home and community care.
  • $2.9 million for justice services, including adjusting the responsibility of transferring prisoners from the RCMP's hands, to the territorial government.
  • $304,000 to create a two-person RCMP unit dedicated to unsolved murdered and missing persons cases.
  • $595,000 toward implementing Indigenous self-governance agreements.