YELLOWKNIFE (February 19, 2016) – The Government of the Northwest Territories (GNWT) will begin posting deficit budgets by the 2019-20 fiscal year unless it finds approximately $150 million through a combination of expenditure reductions and revenue measures over the next five years Minister of Finance Robert C. McLeod revealed in his fiscal update to the Legislative Assembly today.
“Even with the partial restoration of federal transfer funding announced this week, which we had already anticipated, the GNWT’s expenditures are still growing faster than its revenues,” said Minister McLeod. “Unless we bring our spending into line with the money we are bringing in, we will have to start borrowing just to fund existing programs and services. That’s bad fiscal policy and can’t be sustained.”
GNWT revenues are broadly linked to activity and growth in the NWT economy. Continuing weakness in the territorial and national economies combined with low commodity prices and the ongoing effects of the 2008 global economic downturn will continue to limit NWT economic growth and government revenues for the medium term.
“The NWT economic outlook and the implications for GNWT revenues are the 18th Legislative Assembly’s most serious challenges,” said Minister McLeod. “We need to support growth and diversification in the NWT economy with investments now. Promoting economic growth and increasing the tax base is important for the long-term health in own-source revenue. However, unless we make changes in expenditure management, we will not have the fiscal resources to make strategic economic investments, let alone sustain current programs and services.”
In an initial move to curtail expenditures, Minister McLeod announced that salaries for senior managers and excluded GNWT employees will be frozen for the next two years.
Media inquiries:
Andrew Livingstone
Senior Cabinet Communications Advisor
Department of Executive
Government of the Northwest Territories
Tel: 867-767-9140 ext. 11092
Email: andrew_livingstone@gov.nt.ca