Check Against Delivery
Thank you. I would like to take this opportunity to recognize dignitaries in attendance, and you, members of the Northwest Territories business community, for being here today.
Congratulations to Richard Morland and the members of your new Board of Directors who will now take the lead on the important work that is put forward by this Chamber; encouraging, supporting, and advocating for local business throughout the Northwest Territories.
This morning, you were provided a great snap shot of the economic realities and trends which our territory faces.
We are not alone in facing economic challenges. Provinces and territories across Canada are feeling the squeeze of a shift in economics and fiscal responsibilities. The Northwest Territories is no different and the current economic realities are significant; both for your bottom line, and that of your government.
There are areas of optimism and opportunity; and with your input and expertise, the Government of the Northwest Territories can be an effective champion for the NWT economy. I believe that we can position ourselves to see through these challenging economic times.
As we prepare to deliver the first budget of the 18th Assembly in June, it will be critical for us to find a balanced approach between the fiscal responsibilities that we have and the economic realities that we face.
We have a duty to meet the needs of our residents in areas such as education, health, and social well-being. But, especially in this time of economic downturn, we must balance these essentials with needed investment in capital infrastructure, resource development, and economic diversity. We must protect our capacity to borrow for future investments.
And, even in these rocky times, we must work to maintain a strong fiscal standing for our territory’s future generations.
I would like to take the time today to highlight the approach with which we are preparing to move forward.
It is an approach that, first and foremost, is guided by the priorities and strategic directions captured and articulated in the 18th Assembly’s mandate.
The Government of the Northwest Territories will promote economic self-sufficiency through responsible development of the mineral and petroleum resources in the Northwest Territories; and encourage growth in renewable resource-based industries to create a prosperous, diverse, and sustainable economy for all residents.
It is an approach built on addressing three critical elements of our economy; resources, finances and people.
Our economy is one which operates at local, national, and international levels. We will need to support each level of our economy in order for our goals to be realized.
In particular, our export economy provides the wealth and external investment to build our localized economies. Our mining industry, in particular, represents nearly 40% of the territory’s GDP and offers a very real means for raising the revenues necessary to bring NWT citizens the changes they have tasked us with providing.
With billions in economic activity, millions in tax revenue, and thousands of jobs created each year, we are committed to supporting continued strength and vitality in this sector.
We have some of the largest proven mineral reserves in Canada; a virtually untapped, rich geological potential capable of supporting a healthy minerals industry for generations to come.
We are aware that industry as a whole is facing challenges – and there are a number of obstacles that we must overcome. We will need to restore the positive exploration investment climate that will lead to the discovery of new deposits and establish new mines in order to sustain and grow our economy.
I can assure you today that your government intends to bring investments and initiatives to the table to address this.
We still have a $1.8 billion budget which we are committed to investing in our territory. And beyond the foundational investments in health, education, and social well-being; much of this will be funnelled into projects designed to increase incentives for economic development, both in resource development and economic diversification, in the Northwest Territories.
We also have the tools and the capacity to address long-standing issues of certainty. Devolution has brought control of our lands and resources home. The impact of this cannot be overstated.
Making land available in an orderly and responsible manner by settling land claims, finalizing land use plans and reviewing conservation targets will help support responsible resource development consistent with the values and priorities of our residents.
I have committed to finding the common ground that will allow us to settle our Territory's outstanding land claims in the next four years. I have also committed to leading a government that speaks with a common voice and takes a balanced approach to land use planning.
A predictable, northern-designed regulatory regime founded in settled claims is something that will be essential to advancing and supporting responsible resource development in the NWT.
Our partnered approach and commitment to resource development extends beyond our mining sector. With exploration down, we will be taking steps in the next four years to advance an environment conducive to modern, responsible petroleum development.
The recently-released Liard Basin shale resource assessment results confirm the potential for development in this sector. It is our duty to ensure that this potential is viable and well-supported from economic and environmental perspectives. Legislative reviews are in order and will soon be underway to ensure the landscape is positive for both the needs of industry and our people.
Meanwhile, we are continuing to support investments in infrastructure that will facilitate access to the NWT’s resources, and are themselves, incentives and stimulus for employment, business opportunities and economic stability.
We are continuing our efforts to capture federal funding in roads and infrastructure corridors like the Mackenzie Valley Highway extension and the all-weather road to Whati that will reduce barriers for resource companies operating in our territory and with improved access bring more affordability to residents in our more isolated communities.
Our 25 year transportation plan will see nearly 1,000 km of new all-season road built across areas of some of our highest geological potential. Meanwhile, the completion of the Mackenzie Fibre Optic Line will increase the connectivity of the Northwest Territories and contribute to modernizing our communities and their economies for the information age.
These items will require significant investment. And, in light of the fiscal realities, that we are facing, these are bold promises and commitments for our government to make.
We are in a situation where our revenues are already less than our spending. Each of you, as active participants in the business community, understands that this is an untenable position for any organization.
Like you, government needs to plan for its financial future, and that includes making the right decisions about how we will fund capital investment and future growth. Those decisions are based on a Fiscal Responsibility Policy that requires the Government of the Northwest Territories to use operating surpluses to partially fund our capital investments. No operating surplus means limited opportunities for new capital investment and that is not a situation that the government, or the business community, wants to see develop.
If we want to preserve our ability to continue growing this territory and its economy through strategic infrastructure investments, we need to address the gap between revenues and expenditures that is emerging. That will mean taking some corrective action to bring our expenditures into line and making sure that future growth does not outpace revenue growth.
We do not make this decision lightly. Government expenditures are part of the economy that we are trying to support. However, we need to consider an economic outlook that anticipates the difficulties in the resource sector. Commodity prices today and in the foreseeable future are much lower than in recent history. We are already seeing the effects.
The Government of the Northwest Territories will not fund its day-to-day operational needs by undertaking increased short-term borrowing. We will pay for programs and services that meet our priorities and are affordable over the long-term. We will live within our means; not just today or for just this year, but for the entire four years of the 18th Legislative Assembly. We have a responsibility to make sure that when the next government is elected, that we aren’t leaving them a legacy void of sound fiscal planning.
We are seeking to foster the environment that allows NWT residents to create a future of prosperity. This goal requires investments that we cannot make without addressing the expenditure side of the budget.
[Pause]
Beyond fiscal responsibility, perhaps our greatest need today, is people.
The continued diversity and development of local economies is integral.
Our government will bring renewed focus to supporting local businesses. It is at this level that entrepreneurship, economic diversification, and community development occurs. Encouragement, support, and investment are required to foster growth - and growth is required in order to further the Government of the Northwest Territories’ mandates surrounding population attraction and quality-of-life.
Promising initiatives are already underway. The Inuvik Greenhouse is one which continues to present promising results in the community, providing access to agricultural capacity where there once was none.
The revitalization of the territory’s fishery industry also remains a priority for our government. If done right, this will open up job markets for newcomers and decrease the cost of Great Slave Lake fish.
Our efforts to address northern costs also include support for the use of energy-efficient technologies, and the increased production and transmission of renewable and alternative energies. These are some of the most effective ways to keep more money in the pockets of residents.
Our growing tourism industry will remain an area of focus for strategic investment. In the wake of a banner year for tourism expenditures that helped surpass five-year targets, the GNWT is pleased with the payoff that investments in tourism have made.
Our burgeoning film sector also provides promise for new kinds of work in the territory. Our continued goals in supporting and expanding our film sector will be guided by our film strategy, which is currently being implemented by the NWT Film Commission.
We recognize the importance of the traditional economy in the Northwest Territories and will continue to provide support in our communities to preserve the essence and practice of the Indigenous cultures which form the foundation of our territorial heritage. Supporting these activities not only provides our community members with the resources to maintain and share the cultural practices they hold dear, but creates important opportunities for people to make a living.
Growing the territory and its economy has to start at the community level. We need to create and support sustainable local economies that provide jobs and opportunities to residents in Fort Simpson, Hay River, Inuvik and all our communities. The success of our economic and fiscal ambitions will come down to partnership. Partnerships between our governments, both public and Aboriginal; Partnerships with industry and business; with the Arctic community, with all of our peoples.
These will drive the economic future of our territory.
Together, I am confident we can achieve the aims of our fiscal and economic plans, and emerge from these trying times in a strong position to provide the future our territory deserves.
Thank you.