Merci, Monsieur le President. Look, I realize I'm the only thing standing between a pizza party and my colleagues here so I want to recognize and thank the Minister of Finance for the collaborative discussions that led to concurrence in Committee of the Whole to proceed with an appropriation bill, and I meant that.
However, this is the largest ever capital project for the Northwest Territories at $502 million. In short, we are overspending on capital and not spending enough on the right priorities, in my view.
There is a relationship between capital and our programs and services. It's called the fiscal responsibility policy that requires us to have an operating surplus on our operations side to spend money on buildings and big infrastructure. When we overspend big on capital, we have a lot less money to spend on programs and services for our residents. It's left us scrambling to find matching funding from the federal government. Even if the feds gave us free dollars, we still have to find the operations and maintenance money for large projects.
For example, the $14 million that Infrastructure is now scrambling to find for the upkeep of the Inuvik to Tuk Highway; or, the ongoing service payments for the Tlicho All-Season Highway that will cost us more than $10 million a year for the next 25 years. All of which eat into our ability to pay for programs and services.
As to further evidence of overspending on capital, look at the 2019-20 public accounts where GNWT failed to comply with our own fiscal responsibility policy. GNWT overspent on capital by $32 million with no consequences. We cannot get a clear commitment from the Minister to review that policy in light of this overspending and/or the increasing reliance on P3s as a way to finance large projects.
In June of this year, the Finance Minister said, during the budget dialogue, "over the medium term the fiscal situation is unsustainable and projections show that the borrowing limit could be exceeded by 2024-25 even though the limit was increased."
In other words, we are spending too much on capital and not doing enough to raise revenues. The Minister said that we need to "generate more cash from operating surpluses to lessen the borrowing pressures." There are basically two ways to do that - raise more revenues or slash programs and services to continue to spend on capital.
Let's look at the revenue side. The Finance Minister only released the revenue options paper two days before the budget dialogue after my many requests. In my view, this Cabinet is not serious about raising revenues. It gave away $21 million in revenues to Husky Oil in a significant discovery licence with zero dollars in rent over fifteen years. It rolled back the small business tax and did nothing to replace the $1.4 million a year in lost revenue.
I've been pushing for a fairness review of our taxation system for six years, to no avail. When I've suggested working with federal opposition parties to increase our portion of own-source revenues under the devolution agreement, it has fallen on deaf ears.
We haven't yet come to a point where we are slashing programs and services as happened in the last Assembly. But the mysterious government renewal initiative will have to come up with millions of dollars of savings to stop us from hitting the debt wall.
We got a public fiscal update from the Finance Minister on September 15th. That presentation made a number of points that show we are on an unsustainable path. As I said before, we're not just on the edge of a fiscal cliff, we're over the side now. We're still in the early stages of economic recovery with a shifting workforce but we have lots of additional expenses including COVID and flood recovery. When temporary federal capital funding is removed, we are in a permanent deficit position. Debt has grown at a rate of 17.2 percent annually since 2008-09, almost four times the rate of revenue growth. Our ability to spend on capital will decrease dramatically and the Minister predicted it will be less than half what it is now in a couple of years.
I'm all for stimulus spending as part of economic recovery, but we don't seem to be able to get money out the door right now. I couldn't get a concise answer on what the actual carryovers are in the capital estimates but if it is anything like last year's capital budget, that was about 50 percent.
I asked in the last Assembly for carryovers to be tracked carefully so that we actually understand the reasons for that. I am not convinced that a system is yet in place to do that. Are we getting massive carryovers because we've maxed out our contractor capacity; the ability for our economy to do the work that the government intends to contract? Is it as a result of cash flow issues? Problems with our capacity to actually get the funding out the door? I don't know. We don't seem to have a good understanding of why carryovers continue to take place and seem to be on the increase. If you don't track it and understand the reason, we can't work on how to fix it.
I also wonder why we are rushing to spend money that we can't get out the door during a pandemic. At the same time, the procurement review is still underway with changes unlikely to be fully implemented during the 2022-23 fiscal year. Why rush to spend money now when we should change procurement to retain more benefits in the NWT from government spending?
Now, I want to turn to what spending Cabinet is proposing in these capital estimates.
It's my understanding that after a recent increase to the federal borrowing limit, we only have about $300 million left. How could we ever possibly hope to do the big infrastructure projects, whether it's the Mackenzie Valley Highway, the Slave Geological Province Corridor, the Taltson Expansion, when all we have left is $300 million? I just don't get it. We need to stop pretending we can ever do all of these and focus on only one if we must, and That should be the Mackenzie Valley Highway if it can be done in small sections where communities can actually benefit from the construction work.
The contract spending on the Slave Geological Province work over the last five years, and Taltson Hydro Expansion, shows that about 10 percent of the money actually stayed in the North. Why are we doing these projects if only 10 percent of the money is staying in the North?
The Finance Minister said in her opening remarks that we are going to spend $150 million on roads in the capital budget. That's almost 15 times the amount we are going to spend on new and renovated housing. I understand that there may be other federal funding not in the capital estimates for housing and that may be fixed in future versions, but we continue to spend more on roads than housing - a lot more.
This is totally out of whack with our reality where 43 percent of the NWT dwellings in 2019 had at least one housing problem. Those problems relate to affordability, suitability, and adequacy. If that's not bad enough, core housing needs have actually increased by 11 percent over the last ten years. At last estimate, there are almost 1000 people on the waiting list for housing in the Northwest Territories. That's a shameful record that is perpetuated in these capital estimates. I fully understand that most of the capital funds for the NWT Housing Corporation flow through the main estimates but clearly we are not spending enough on housing to even start to make a difference.
Yes, there are some items I can and do support in the capital estimates, and those will undoubtedly bring economic and social benefits. However, I'm voting against this capital budget to send Cabinet a clear message to get our fiscal house in order. We've got two years left to steer this shipyard in the right direction, Get serious about raising some revenues, and start spending on real priorities like housing. And Mr. Speaker, I would urge Members on our side, if you can't vote against the budget please abstain and start to send that message to Cabinet on the other side. Merci, Mr. Speaker.