While the N.W.T. government has presented its 2021-22 budget as one that aims to project stability during a global pandemic, observers are saying it lacks the foresight to tackle a troubling financial future.
Finance Minister Caroline Wawzonek presented the budget Thursday. It allocates $117 million in new spending, much of it dedicated to the government's response to the COVID-19 pandemic.
The budget also includes a cut of the territory's small business tax rate from four per cent down to two, a development N.W.T. Chamber of Commerce executive director Renee Comeau said was welcome news.
"This was something that the business community has been asking for, for a significant period of time," Comeau said, adding that it puts the N.W.T. on par with some of the lowest rates in Canada in B.C., Saskatchewan and Yukon.
"For those small businesses, those reductions ... give them the incentive to further invest in their businesses. It actually increases the tax revenue the GNWT will see going forward."
However, Comeau expressed disappointment at the lack of support offered to the struggling tourism sector, facing further uncertainty due to travel restrictions that could extend into the summer and beyond.
The budget contains funding for a 2025 tourism strategy, but no additional relief for operators in the short term.
"Not to be a negative Nelly, but you can't put money towards a sector that might not even exist in 2025," Comeau said. "We need to protect and save our tourism, our hotel and our hospitality sectors right now."
'We're just chasing dreams'
Frame Lake MLA Kevin O'Reilly offered praise for small investments in fisheries, arts and the film industry in the budget, but said that in his view, it doesn't go far enough.
"There is some potential to diversify our economy in those ways, but there's also significant investment in continuing our dependence on mining, oil and gas," he said, pointing in particular to an investment in creating a petroleum resources strategy.
"There's just no prospect of oil and gas, I think, ever coming back here," he said. "The sooner we realize that and redirect those resources to diversify and strengthen our economy ... we're just chasing dreams or wishes that's never going to happen."
O'Reilly also noted that little in the budget addresses economic recovery from the COVID-19 pandemic, something that may be addressed with supplementary appropriations during the year.
"It's mentioned, talked about, but we still don't have a plan from cabinet to do that," he said.
"I'm pleased there's no reduction in services in this budget. I think if this was four years ago, we'd be looking at major cuts, from the previous cabinet. But there's a lot more to be done to help diversify our economy, stabilize revenue sources, and build a more resilient economy."
Speaking Friday morning to CBC North, Wawzonek said that there are elements of the budget that show a shift toward larger changes in the economy and spending, pointing to a department-by-department spending review, an ongoing review of procurement processes, and an upcoming red tape review.
"I don't want to stand by and say that we're just going to change XYZ spending without evidence," Wawzonek said. "That's not a prudent way to handle our government fiscal situation."
Wawzonek pointed out that despite the pandemic bringing some issues to the fore and changing immediate priorities, the territory's fiscal issues are not new.
"[It's] the same challenge we had last year," she said. "Nothing's changed, but we're building on it. The work's getting done."