Thank you, Mr. Speaker. Uncertainty of the global pandemic -- sorry, Mr. Speaker, one page ahead of myself.

Introduction

The Standing Committee on Economic Development and Environment (SCEDE) has witnessed the acute and severe decline in the NWT's private sector from COVID-19. The decline in business activity continues to affect NWT businesses today. While the path through the pandemic may be short term, for some businesses and others it will take much longer to recover.

Businesses across the NWT were ordered to reduce or completely shut down their operations. A handful of businesses were able to innovate and provide altered services to remain open. Many small and medium businesses, however, have quickly depleted their financial reserves and are struggling to survive.

Total employment in the NWT fell by 400 persons in April, while the employment rate dropped to 62.3, the lowest for that month in the past 10 years. Compared to last year at the same time, unemployment rates rose among major worker groups, the highest among those who live outside the territory or outside the capital of Yellowknife are female, aged from 25 and older.

The NWT economy relies heavily on the extractive, non-renewable resource sector, especially the diamond mining industry, representing 21 percent of the overall economy. Although mining, oil, and gas have declined drastically since 2007, it still remains the NWT's most dominant economic sector. Next to mining, oil, and gas, the services industry comprises the vast majority of the remaining economy, at 68 percent, and is dominated by public administration at 32 percent.

The private sector, which is narrowly comprised of non-renewable exports, is volatile as it is subject to global commodity prices. The NWT has witnessed Dominion Diamond Mines ULC, the controlling owner of Ekati Diamond Mine and 40 percent owner of Diavik Diamond Mine, suspend operations at the Ekati mine site and file for a creditor protection order, leaving over $13 million hung up in unpaid expenses to NWT businesses during COVID-19. The NWT resource sector support services, arguably the most important economic linkage in the NWT economy, continues to wait out the uncertainty of the global pandemic as diamonds remain volatile, which furthers the NWT's private sector uncertainty at this time.

The GNWT is heavily reliant on federal financial support as its primary revenue source, accounting for slightly more than 80 percent of the GNWT's total revenues of $2.186 billion. While the GNWT's total operational expenditures, pre-pandemic, is estimated at $1.983 billion, the GNWT can largely run on federal government transfer alone. Government administration can act as a stabilizing force to the NWT economy through this recession. The NWT economy will remain much more stable through the recovery of COVID-19 than other Canadian jurisdictions dependent on private sector activity to fund government services. The medium- and long-term outlook for the NWT was concerning before COVID-19 and is even more concerning now, as we emerge out of this, post-pandemic. The NWT economy is stable but stagnant.

Due to the NWT's small population, there are limitations for the GNWT to increase own-source revenues. Since 2015, during the construction of the Gahcho Kue diamond mine, private investment has trended downward, while public investment has trended upward.

The government walks a fine balance of moving forward with large public infrastructure projects that reduce the cost of living for residents and make the NWT more attractive for investment, while minimizing borrowing debt and stimulating local business development.

The GNWT across all departments needs to train and instill client-service skills that support and promote small businesses across the NWT. The value of well-trained front line GNWT staff knowledgeable and familiar with the potential capabilities of NWT businesses cannot be underestimated at this time in our economic recession.

Small businesses need to risk start-up and be supported through small government contracts over time to enable a diversified and healthy private sector that contributes to the GNWT's own-source revenue through tax regimes. The larger businesses are pillars of the economy and need to be engaged and supported to expand into larger territorial, domestic, and even international markets.

Although the GNWT may be in a healthy credit position today, the long-term plan for the economy has to increase own-source revenues through the acceleration of a vibrant private sector in order to maintain a positive credit rating.

Mr. Speaker, I pass on to the MLA for Deh Cho. Thank you.