Thank you, Mr. Speaker. Mr. Speaker, this is the third budget of the 18th Legislative Assembly, and the third time that Members have gone through the painstaking process of reviewing the draft budget and providing detailed input to the Minister of Finance and his Cabinet colleagues. I have to say, I am beginning to wonder why we bother.
Before I comment on the 2018-2019 Budget, let me say a few words for those who might be listening, about the role of the Regular Members in the business planning process. I think it is important to explain this process to members of the public. Although this government talks a lot about transparency, the business planning process remains shrouded in secrecy. I will come back to the topic of secrecy later, but for now, let me set out the process and the role Regular Members play in the budget cycle.
From our perspective the important stages of the budget planning process are:
• The development of the government’s fiscal strategy;
• The development and review of the business plans;
• The budget address; and
• The presentation and review of the main estimates in the Legislative Assembly.
The GNWT’s business planning process occurs on an annual cycle. It all starts with the development of the government’s fiscal strategy.
This strategy is established by the Finance Minister in consultation with his Cabinet colleagues. It is developed by considering the GNWT’s projected financial position based on a set of assumptions about revenues, expenditures, and federal transfer payments, and by considering parameters such as the government’s federally set borrowing authority and its own Fiscal Responsibility Policy. The government comes to some decision about how much of a surplus it wants to carry, how much debt it can responsibly manage, and how to meet those objectives by balancing revenues with expenses. Once established, it is used by the Financial Management Board to set budget targets for each department.
Regular Members have some impact in shaping the fiscal strategy, but because it is ultimately the government’s strategy, we must often resort to political pressure to effect any meaningful change. Two years ago, at the beginning of this Assembly, the GNWT started out with a fiscal strategy based on deep budgetary cuts to the tune of $150 million in the first year alone. The Regular Members objected strongly to this approach, which, as anyone could see, was clearly based on drastic austerity measures, even though the Finance Minister said it was not.
Regular Members were not convinced that deep budget cuts were realistic or necessary, and we were concerned about their impact on our fragile northern economy, already destabilized by low commodity prices and flat population growth. We were told, however, by the honourable Minister of Finance that two years of belt-tightening would be followed by two years of greater spending. The cynic in me could not help but notice that this freer spending would conveniently occur in the lead-up to the next election.
Regular Members advocated instead for a more balanced approach. In fact, we brought forward a motion in the House to have the $150 million reduction target removed from the government’s mandate. Although this motion was carried, the target was nonetheless still touted in the Finance Minister’s 2016 Budget Address, and it continues to reverberate in this year’s budget.
In considering the context for business planning, it is important to note that the budget we are now considering is the GNWT’s operating budget. There is a separate process for reviewing the government’s capital infrastructure budget, but the two are intrinsically linked by the government’s Fiscal Responsibility Policy.
This policy requires the government to fund at least 50 per cent of its capital infrastructure investments from the operating budget surpluses generated by government departments alone, excluding the boards, agencies, and Crown corporations that, for accounting purposes, make up the larger government reporting entity. What all this means is that if the government is going to afford the big-ticket infrastructure projects it wants to undertake, it must it must do so by reducing spending on vital programs and services.
We are not talking about modest capital infrastructure spending. According to this government's 2018-2019 Capital Estimates, the money allocated and spent on infrastructure from April 1, 2016, to March 31, 2019, totals $998,765,000. That is almost a billion dollars in capital spending over three years, of which 50 per cent was or will be financed by this government through reduced spending and cuts to health care, education, and social development.
Mr. Speaker, now that we have this fiscal environment in mind, it sets the context within which the government’s current business plans were developed and reviewed by the standing committees over an intensive three-week period in November 2017.
There are four standing committees that work collaboratively to complete this review. The three envelope committees, the Standing Committee on Government Operations, the Standing Committee on Social Development, and the Standing Committee on Economic Development and Environment, share the work of reviewing the business plans of the GNWT’s 10 departments and the NWT Housing Corporation. The committees make recommendations for changes to the business plans that are forwarded to the individual departments through the Minister of Finance.
The role of the Standing Committee on Priorities and Planning, which is composed of all Regular Members, is to review and prioritize the recommendations coming from the envelope committees that have a dollar impact on the budget; to make additional recommendations as needed; and to ensure that nothing has been overlooked.
It is a significant undertaking for the standing committees and their staff to carry out this work. In fact, we estimate that about 1,300 person hours were spent on the business plan review alone. The three envelope committees made a combined total of 142 recommendations and requests for further information, all with a view to improving the 2018-2019 Budget and the overall operations of the government. In that regard, I should note that not all of these recommendations are related to the financial aspects of the budget. Many have to do with improving how information is presented and how the government organizes and prioritizes its work.
The Standing Committee on Social Development made 62 recommendations, including a safe-house pilot project for women and children fleeing family violence in communities without shelters; and a request to the Department of Education, Culture and Employment to reverse all proposed reductions to the Social Work Diploma program and the Teacher Education Program and restore regular enrolment and program operations.
The Standing Committee on Economic Development and Environment made 42 recommendations, including ensuring adequate funding in Industry, Tourism and Investment’s budget for the Business Development and Investment Corporation and for the Boreal Caribou Monitoring Program; and urging the Department of Environment and Natural Resources to make more substantive progress on the Climate Change Strategic Framework.
The Standing Committee on Government Operations, the committee for which I serve as Chair, made 38 recommendations, including requests that support for the Non-Governmental Organization Stabilization Fund administered by Municipal and Community Affairs be increased; that the GNWT support the establishment of more Single Window Service Centres staffed by Government Services Officers; and that the Ministers responsible for specialized portfolios be included in the Business Plan Review and be available to answer the standing committee’s questions; an important step, in the committee’s view, towards greater accountability by this government.
Overall, the Standing Committee on Priorities and Planning, often referred to as P and P, made 39 recommendations and requests for information, some of which echoed the recommendations coming from the envelope committees. Some of these recommendations came in the form of opposition to proposed budget cuts and new funding proposals by the government, including opposition to:
• A proposed reduction of $475,000 to ECE’s budget that would have been used for school counselors;
• A proposed reduction of $150,000 to ENR’s Boreal Caribou Monitoring program;
• A proposed reduction of $925,000 to ITI’s budget for the Business Development and Investment Corporation;
• A proposed reduction to MACA’s multisport games funding of $650,000 over three years, with the first cut being $250,000 in 2018-2019; and
• The proposed addition of $387,000 to fund the GNWT’s office in Ottawa.
Additionally, P and P sought new funding for under-resourced programming, including:
• A $500,000 increase to support for the NWT Arts Council;
• $100,000 for a touring artist grant program; and
• $300,000 to establish Single Window Service Centres, staffed by Government Services officers, in two smaller communities and in Yellowknife.
Mr. Speaker, having conducted a thorough review resulting in detailed, cogent recommendations from the standing committees, Regular Members broke for the holidays, secure in the knowledge that we had done our jobs and confident that our hard work to improve this budget would be accepted by our Cabinet colleagues.
Alas, Mr. Speaker, our confidence was clearly misplaced, as we learned when the standing committees had the opportunity to confidentially review the draft main estimates in January. These are the same draft main estimates that were tabled in the House after the Minister of Finance delivered his budget address last week.
Mr. Speaker, the Regular Members look eagerly to the main estimates to see if the labour we put into reviewing the business plans has borne fruit. What did we find there? Well, contrary to the advice of the standing committees, we found:
• A reduction of $475,000 to ECE’s budget that would have been used for school counselors;
• A reduction of $150,000 to ENR’s Boreal Caribou Monitoring program;
• A reduction of $925,000 to ITI’s budget for the BDIC;
• A $250,000 reduction to MACA’s multisport games funding; and
• The addition of $387,000 to fund the GNWT’s office in Ottawa.
What did we fail to find, Mr. Speaker? We failed to find:
• The requested $500,000 increase to support for the NWT Arts Council;
• $100,000 for a new touring artist grant program;
• $150,000 in additional funding for the NGO Stabilization Fund; or
• $300,000 to establish three new Single Window Service Centres
All of which were recommended by the standing committees.
Mr. Speaker, I cannot begin to tell you how frustrating it is for Members on this side of the House to see such a poor response to our recommendations.
Not a single one of the standing committees’ recommendations with financial implications was included in the draft main estimates. Not one.
The requests made by the standing committees totalled somewhere in the vicinity of $2.9 million out of a total budget in excess of $1.7 billion dollars These were not unreasonable or exorbitant requests; they total less than two-tenths of 1 per cent of the budget. Our requests were modest in their amount, consistent with the government’s mandate and important to our constituents. What is a mere $2.9 million dollars to enhance program spending, as compared with a same-year capital budget estimated at $237 million? Cabinet couldn’t meet us partway. In fact, I have to wonder if they even bothered to review the standing committees’ input at all before printing the draft estimates.
You know, Mr. Speaker, it has been said that the leader sets the tone for a whole organization. When our Premier made a pitch to this Assembly to be considered for the office of the Honourable Premier for an historic second term, he said something that resonated with a lot of newly elected Members. He said, "During this election, it was clear to me that people were tired of adversarial politics and what was perceived as petty infighting. The Northwest Territories residents deserve a government that is focused on making good public policy, not scoring political points. I believe all of us here share that view, and I am committed to working with Regular Members to establish a new, more cooperative approach."
Let me ask you this, Mr. Speaker: do you think a reasonable person would consider Cabinet’s response to our budget requests indicative of a cooperative approach? I think not. Rather than cooperation, rather than good public policy, this Cabinet chose to force the hand of Regular Members. This is what necessitated the deferral of the budgets of the Department of Executive and Indigenous Affairs and the Department of Education, Culture and Employment earlier this week, to give Members time to negotiate with Cabinet behind the scenes to get a better deal on this budget.
I am encouraged at this point in time that these discussions will result in some concessions on the part of Cabinet, but I want to remind the Premier of the commitment he made to every single one of the Members in this House to do business in a new, more cooperative way.
On that note, Mr. Speaker, I want to return to the subject of budget secrecy. There is a tradition of secrecy surrounding the development of budgets in Westminster-style parliaments. John Fraser, Speaker of the House of Commons, explained this tradition in a 1987 parliamentary debate. He said, "Budgetary secrecy is a matter of parliamentary convention. Its purpose is to prevent anybody from gaining a private advantage by reason of obtaining advance budgetary information."
It was also touched upon in a 1976 budget address by the Liberal Minister of Finance Donald McDonald who noted that "the tradition of budget secrecy has two grounds. It is intended to deny to anyone financial advantage from advance information. It is intended to ensure that important statements of government economic policy are disclosed first to Members of the House of Commons." At that time, Minister McDonald suggested that "the time has come to consider whether some of the long-standing traditions that surround the budgetary process should be modified to serve better the needs of today."
As true as that may have been for the federal government in 1976, I believe it is even more relevant for the Government of the Northwest Territories in 2018. This is a consensus system, Mr. Speaker, built on traditions of respect, cooperation, and the sharing of information; principles that seem antithetical to the notion of secrecy. Also, as important as the GNWT’s budget is to the people of the Northwest Territories, openness about proposed budget measures is unlikely to result in disruption to currency or stock markets or to anyone gaining tax advantages.
In fact, budget secrecy is, in some ways, an anachronism inherited from the British parliamentary system that is out of step with today’s technologically fast-paced world. It inhibits consultation, it is contradictory to transparency, and, as it has been said, "does not take account of the broad economic and social role which modern budgets must play." I believe it is time for this Assembly to consider the role of budget secrecy in our proceedings and to move to a more transparent and open process, so that the people of the Northwest Territories can see exactly what work their MLAs and Cabinet Ministers are doing for them. That would be consistent with the more cooperative approach that the Premier promised us at the start of this Assembly.
There are some things about this budget that trouble me. You have heard those. The budget is irresponsibly silent on the carbon tax and cannabis revenues and how these stack up against the costs of administering the new sales system. The Government of Canada expects revenues of $400 million and costs of $700 million. Surely, the situation is similar here in the NWT. This shows the GNWT still doesn’t have a real plan to deal with cannabis or carbon.
I am concerned about the slow pace of legislative progress by this government, Mr. Speaker. I am concerned that it has left too much work to be done in the last two years, which will force standing committees to rush through their reviews of bills, as we have already been asked to do on the cannabis legislation. I am troubled by the fact that we have yet to see legislation to establish the Office of the Ombudsman, legislation that the GNWT promised in its mandate to introduce the first two years of this Assembly.
However, I want to close on a positive note, by pointing out that there are things in this budget that I am glad to see, such as new funding for friendship centres; additional resources for the settlement of lands, resources, and self-government agreements; increased investment in benefits to seniors, elders, and the working poor; and the continued support for mining exploration and investment, but most importantly, that there are no new tax increases being proposed. I am also hopeful that, before this week is out, Cabinet and Regular Members will come to an agreement on some outstanding matters arising from the standing committee’s recommendations.
I’m glad Cabinet is waking up to the need to develop our economy and make strategic investments to create jobs and growth. Regular Members have been making these points for the last two years. As we review the individual department’s budgets in Committee of the Whole, I will have more specific, detailed comments on the budget in the days to come. Thank you very much, Mr. Speaker.