Funding gap with N.W.T. municipalities should be election issue, mayors say

It's been five years since the N.W.T. government acknowledged communities were receiving almost $40 million less per year than needed to maintain existing infrastructure.

Since then, mayors and advocates say not much has changed.

Now, municipalities across the territory are gearing up to lobby candidates in the fall's territorial election to make closing the funding gap a priority for the next assembly.

"We're struggling every day with this," said Sheila Bassi-Kellett, administrator for the City of Yellowknife. She estimates the gap is as high as $11 million for the N.W.T. capital.

"What we see is an acknowledgement that we should be funded more," she said. "We're not seeing a lot of action."

What is the funding gap?

In 2014, the territory's Department of Municipal and Community Affairs (MACA) agreed to undertake a review of a funding formula established in 2007 known as the "New Deal."

Together with the NWT Association of Communities, the department found community governments received $39.2 million less per year than they would need to maintain and replace their existing infrastructure.

In Fort Simpson, N.W.T., Mayor Sean Whelly said he receives about $2 million per year from the territorial government. But he estimates he'd need $5 million per year to keep up with the community's infrastructure needs.

"We're able to do emergency repairs," said Whelly. "But we're so stressed in our funding that we tend to not set up programs of regular maintenance."

For example, Whelly said the town hasn't been able to afford regularly flushing the sprinkler systems at its rec centre. But after a review by the fire marshal, the town is facing a much more expensive prospect: replacing the system altogether.

Now, Fort Simpson is counting on a one-time infusion of federal or territorial cash, like the $31 million announced recently for roads and cultural sites.

"It's basically begging — begging to get things done — after they basically fall apart," said Whelly.

CBC spoke with mayors and administrators in several communities across the territory. While the impact of the gap varied, all said territorial funding for municipalities should be an election issue in the fall.

According to MACA Deputy Minister Eleanor Young, the territory has made moderate increases to funding over time, reducing the overall gap to about $30 million by the end of the 2019 fiscal year.

But Sara Brown, CEO of the NWT Association of Communities, said the new money, which amounted to an average of just over $42,000 per community last year, is a little better than a "cost of living" increase.

"That just means the gap is moving," said Brown. "It's not being closed really."

MACA seeking increases in 'competitive environment'

Young said the department has done the best it can to close the gap under strict financial pressures.

"I'm sure that the folks out there that need money are saying that we've not made sufficient effort," said Young. "From where I sit, obviously, I'm working in a very competitive environment for funding."

"It was never … an expectation that we would be able to address that $40 million in five years," she said.

"We know that money doesn't grow on trees," said Yellowknife administrator Bassi-Kellett. "We're not expecting an immediate influx right away."

But Bassi-Kellett also pointed to new territorial revenue streams — like cannabis sales and the carbon tax — that are not being redistributed to communities.

The benefits of closing the gap could be substantial. The NWT Association of Communities estimates adequate funding could increase the territory's GDP by $21 million and result in 220 new jobs.

That became a flash point in the Legislative Assembly last week, when MACA Minister Alfred Moses laughed at MLA Kieron Testart for suggesting the 18th Assembly do something to address the funding gap before its mandate ends in September.

The territory is planning to release a new funding strategy before the end of session.

"This is going to be something that's going to need to be addressed by the next government," said Moses at the time.

"Where's the direction of the territorial government going?" said Whelly. "They like the glittery, high profile, attention-grabbing projects."

"Are they trying as hard to get the money for the communities?"