Check against delivery
 

Mr. Speaker, the Northwest Territories is on the verge of a significant economic transformation, with unprecedented development opportunities emerging across the territory. At the same time, we are facing serious economic challenges and growing pressures on government finances.

The challenge before us is to connect these two realities. We must manage our finances responsibly while making strategic investments that support long-term economic growth. That means building critical infrastructure, strengthening Indigenous partnerships, and developing the skilled northern workforce and business capacity needed to take advantage of the opportunities ahead.

Success will not be measured simply by the number of projects built or the money invested, but by whether those investments create lasting prosperity, stronger communities, and a more resilient territorial economy.

The Northwest Territories has experienced major development cycles before. Those experiences have demonstrated the economic potential of the territory’s resources, but they have also taught us that lasting prosperity depends on careful planning, strong partnerships, and ensuring the benefits remain long after construction is complete.

It also depends on the work getting done. The opportunities before us are still just that: opportunities. They are not guaranteed. If uncertainty, delays, or division prevent projects from moving forward, we all stand to lose. But if we work together in partnership, with trust, respect, and a shared commitment to success, we can turn these opportunities into lasting benefits for the Northwest Territories.

This approach is especially important as major nation-building projects, critical mineral development, energy infrastructure investments, and transportation corridors gain momentum across the North. The fiscal choices we make today will influence how these opportunities can become lasting sources of prosperity for future generations.

Last year at this time, we discussed the uncertainty facing Canada and the Northwest Territories arising from the United States’ trade policies, alongside the anticipated closure of the Norman Wells oil facility. Since then, production at Norman Wells has ended, and the outlook for the diamond industry has deteriorated significantly. With resource production declining, the Northwest Territories is facing a difficult economic transition, and GDP is expected to decline.

Despite these challenges, several economic indicators have performed better than anticipated. Employment and average earnings have held up better than forecast, and labour market participation has increased. Investment spending has also exceeded expectations, as more residential and public infrastructure projects are underway. 

The infrastructure investments underway will strengthen our supply chains and improve electricity reliability over time. But today, many NWT households and businesses continue to face significant affordability pressures. High fuel and energy costs are putting pressure on household budgets, increasing the cost of doing business, and adding to the cost of delivering government programs and services. The GNWT is taking action to address these pressures. Since the beginning of the 20th Legislative Assembly, the government has delivered 286 housing units, invested $7.5 million in expanding the Healthy Food for Learning program, enhanced income assistance benefits, and committed $48 million over four years to help moderate electricity rate increases.

These measures are helping address immediate affordability pressures. At the same time, longer-term investments such as the Mackenzie Valley Highway and Taltson Hydro Expansion are intended to address some of the structural challenges that make living and doing business in the Northwest Territories so expensive.

Mr. Speaker, the same cost pressures affecting households and businesses are also having a direct impact on government finances. We began the 2026-2027 fiscal year with a projected operating surplus of $20 million. Budget 2026‑2027 included $2.397 billion in departmental spending and $326 million in other adjustments that include infrastructure contributions, deferred maintenance and a $210 million supplementary reserve. Total debt on March 31, 2027 was forecast to be $2.21 billion.

As of September, revenues are now projected to be $2.756 billion, slightly higher than estimated in Budget 2026. However, the operating expenditures are projected to increase to $2.795 billion. This means we are now forecasting an operating deficit of $39 million for the 2026-2027 fiscal year, a deterioration of $59 million from the original budget. 

The most significant pressures include additional support for the Northwest Territories Power Corporation to address low water levels and higher fuel costs, as well as increased wildfire emergency costs. These are real financial pressures that must be managed, and they demonstrate how quickly circumstances beyond the government's control can affect the fiscal outlook.

Despite the projected deficit, total debt by March 31, 2027 is still forecast at approximately $2.2 billion, consistent with the original budget projection. This remains below the federally imposed borrowing limit of $3.1 billion, although the GNWT must also maintain a financial cushion under the Fiscal Responsibility Policy.

In addition to cost increases, the current outlook also incorporates decisions to invest in priority infrastructure projects that will help strengthen public services and that focus our efforts to support longer-term economic growth and development. These plans include substantial capital investments in the near term, reflecting opportunities to advance projects with federal support.

We are also continuing to invest in essential priorities such as inclusive schooling, health care, housing, and other services that support residents and communities across the Northwest Territories. These investments are important, but their growing costs must be managed within the territory's financial means.

Current projections indicate that operating expenditures will continue to grow faster than revenues, resulting in projected deficits over the medium term. This is not a sustainable trajectory indefinitely, and it reinforces the importance of continuing to manage expenditure pressures and improve the long-term sustainability of government programs and services. 

This is the difficult balance before us. The Northwest Territories has an opportunity to build the infrastructure needed to improve connectivity, strengthen communities, and support new economic development. We need to be prepared to take advantage of those opportunities, which also means investments in education and health care so that our residents are ready to maximize their potential. However, we are trying to invest in this transformation at the same that revenues are strained, costs are rising and we still need to maintain the government's long-term fiscal sustainability.

Mr. Speaker, the proposed 2027-2028 capital plan, which I will table later today, reflects both the immediate infrastructure needs of communities and the significant opportunities for economic development across the territory.

The plan includes more than $790 million in proposed capital investments. We recognize that actual spending during the year will likely be lower, as the timing of major projects depends on planning, procurement, regulatory requirements, and construction schedules.

Nevertheless, the potential economic benefits are significant. At the planned level of investment, the capital program is estimated to generate approximately $320 million in economic activity, support 1,750 full-time job equivalents, and contribute more than $230 million in labour income across the Northwest Territories. Actual impacts will depend on the timing and pace of project delivery.

But realizing these benefits will require more than funding commitments. We need the GNWT, Government of Canada, Indigenous governments, communities, and industry to work together to get projects built, strengthen the capacity of northern businesses and workers, and ensure the benefits of these investments are felt across the territory for years to come.

Mr. Speaker, higher planned capital expenditures and reduced operating cash surpluses are expected to increase government debt over the medium term. Work is underway to address ongoing expenditure pressures, including efforts to improve the long-term sustainability of the health care system. These initiatives are intended to reduce future financial pressures, but their benefits will take time to realize.

Under current planning assumptions, the GNWT is projected to exceed the infrastructure financing provision established in the Fiscal Responsibility Policy over the medium term. This reflects the combination of significant planned infrastructure investments and reduced operating cash surpluses. It is a pressure that needs to be addressed as we develop future budgets, including through careful consideration of capital priorities, project timing, expenditure management, and opportunities to maximize federal and other external funding.

Over the next year, the government will review how major capital projects are sequenced and what expenditure management measures are necessary to ensure infrastructure investments remain affordable.

As major federally supported projects advance, we need to ensure that the pace of investment matches the territory's financial capacity and ability to deliver our part and to ensure operations and maintenance funding is available for new assets. That may require difficult decisions about project timing and priorities, but those decisions are necessary to protect long-term fiscal sustainability.

While the fiscal outlook remains manageable, it is also subject to significant uncertainty. Business planning for 2027-2028 is still underway, and federal funding arrangements continue to evolve. Changes in project schedules, expenditure requirements, or federal cost-sharing commitments could materially improve or worsen the territory's fiscal position.

Mr. Speaker, the opportunities before us are significant, but they are not guaranteed.

The challenges facing the Northwest Territories are real. Long-standing industries are winding down, the cost of living and doing business remains high, and government finances are under increasing pressure. We need to be honest about those realities, because they will not simply disappear as we look at a promising horizon. But we also cannot afford to stand still.

There is a cost to making the investments needed to build a stronger economy, and we must be honest and disciplined about what we can afford. But there is also a cost to delaying those investments and allowing opportunities to pass us by.

That will require difficult decisions, careful planning, and a willingness to work together. It will require the GNWT, Indigenous governments, communities, industry, and the federal government to remain focused on what matters most: getting the right projects built, ensuring Northerners benefit, and creating the conditions for lasting economic growth.

Ultimately, that is how success should be measured.

Not by how much money we spend, or how many projects we announce, but by what those investments make possible. More good jobs. Stronger northern businesses. Better connected communities. A more resilient economy that can support the services residents depend on and create opportunities for the next generation.

Mr. Speaker, the Northwest Territories is entering a period of profound change. We cannot control every challenge that comes with it, but we can make choices today that shape what comes next.

When future generations look back on this moment, the measure of success will not be the opportunities we talked about. It will be what we did with them.

That is the responsibility we share. . That is the future we have and opportunity to build together.

Thank you, Mr. Speaker.