Thank you very much, Mr. Speaker. Mr. Speaker, thank you for the opportunity to reply to the 2022-23 Budget Address. I'd also like to acknowledge the work of staff across the government who have worked hard to prepare the budget.
Mr. Speaker, in total, the budget increased by $43 million, representing a 2.1 percent increase in expenditures over the previous fiscal year. In various ways, departments report on the progress of their initiatives that relate to the Assembly's priorities. However, it would be helpful if the budget reflected both the budgets and expenditures for those priorities come budget time. This would allow us to see the return on our investment, the financial effectiveness of the money we are spending, and make some judgement whether these investments are worth it. It's been said that what gets measured gets managed. So it would be worth measuring what we are spending on our priorities to ensure that these initiatives are well managed.
Mr. Speaker, while this is largely a status quo budget, four departments do show decreases and the most significant budget increase is for the Department of Finance at 13.9 percent. This increase needs to be evaluated along with what I would like to speak to today -
- The almost 2 percent decrease in the NWT population over the last five years,
- The 5 percent increase in inflation over the previous year,
- The forecasted approach of the debt cap, and
- The Assembly's housing priority.
Mr. Speaker, this government has been largely silent on attracting new Northerners. With the economic and social potential from growth, this government needs to take every opportunity to remind the world that we are open for business not to mention a great place to plant roots. Budget time is a great time for this by identifying the specific and broad potential that infrastructure investment creates. For example, the Road to Whati opens access to bismouth deposits for the Tlicho people, and the multitude of R and D investments across the government open doors to reimagine the way the GNWT serves the NWT.
Mr. Speaker, inflation alone could increase costs significantly beyond budget projections, especially when petroleum products have increased by as much as 33 percent. This will affect operational costs in every building the GNWT occupies as well as the fuel it uses in government and medical travel. As costs rise, departments will find it difficult to operate within their budgets. The GNWT's reliance on government renewal to change the way it uses its budget is clear - find the path to change or start cutting. And Mr. Speaker, what is required may be a bit of both.
Mr. Speaker, we can't talk about government spending without talking about COVID-19. The reality is COVID-19 has cost governments worldwide, and our fragile system is not immune to these expenses. Although the eruption of further variants is unpredictable, the country as a whole, recognizing increasing vaccination rates, is quickly opening. Even here in the NWT, we expect to see the end of a two-year public health emergency within the month. Even though future variants may require public health restrictions or new vaccines, we should now have a less onerous mechanism to protect our health and galvanize individual responsibility for mutual care with less public oversight and enforcement.
Mr. Speaker, after the introduction of seatbelt legislation, buckling up did eventually become nearly automatic behavior every time we climb into our cars. Managing the pandemic needs to cost less over time.
This fiscal year will see the Covid Secretariat budget reduce from $26 million to $12 million, but the number of people employed by the Secretariat remains untouched. About half are directly involved in compliance, monitoring, and enforcement. Given the demands on our system, surely there are positions around the territory that would better support the ability of our territory to thrive.
Mr. Speaker, this is a business-as-usual budget, But these are not business-as-usual times. This is an opportunity to budget for a different future.
For instance, even after COVID global political disruptions just aren't likely; they are already happening. Look at the devastating realities of the war in the Ukraine. Here at home, these are likely to disrupt supply chains and especially the availability and cost of refined petroleum resources.
This increase in cost of living, coupled with the caution imposed by COVID, will continue to affect specific industries like tourism, our overall capital investments, operational costs and, yes, our cost of living.
Climate change will have increasingly wicked impacts. The Intergovernmental Panel on Climate Change tells us we are still on a collision course with average temperatures warming greater than two degrees Celsius in our lifetime.
Increased extreme weather will continue to disrupt food production and transportation. Last year, we experienced historic Mackenzie River flooding with huge impacts to Jean Marie River, Fort Simpson, Fort Good Hope, and Aklavik. The West Coast experienced the same with significant impacts to key highways and the cost of food. We will continue to see climate change increase rainfall, flooding, and coastal erosion here in the North. Increasing temperatures will affect habitat, change the availability of country foods, especially meat, disrupt Indigenous subsistence, and increase the cost of living.
Although we are moving forward toward a 30 percent decrease in GHG emissions by 2030, our goals depend on the mitigative actions of industry and the expansion of the Taltson, and neither of these are assured.
Mr. Speaker, I question whether it is the efforts of our government or the reduced mining activity in the North that has reduced our GHG emissions. We have a lot of work to do, and implementing the GNWT portions of the approved 2030 Energy Strategy largely depend on federal contributions.
In June 2021, the federal government renewed its efforts to reduce greenhouse gas emissions and passed Bill C-12, raising the bar to a 40 percent GHG reduction and a target of net-zero by 2050. The spectrum of issues will change and the costs will increase, Mr. Speaker.
Demographically, we are becoming fewer in number but older in age. Housing options and care will need to change for seniors to live in place with dignity or, alternatively, further hollow out our small communities through rural to urban migrations. The spectrum of housing and care requirements will change, and the costs will increase, Mr. Speaker.
Although the legacy of colonization has been recognized through the Truth and Reconciliation Commission, the Missing and Murdered Indigenous Women and Girls Inquiry, the repeated discovery of unmarked graves at residential schools, the work of decolonization and its impacts on collective trauma, structural inequality, and political self-determination, has hardly begun. The spectrum of issues will change, and the costs will increase, Mr. Speaker.
My point is that the future is uncertain and more complex than before. If we are trying to build resilience to return to business-as-usual following each coming disruption, we will not win, Mr. Speaker. A status quo budget does not serve us at a time when the world is anything but status quo. At the least, we must innovate and adapt. But the goal, really, is to innovate and transform.
A sense of urgency needs to pervade government renewal exercises. We need to redirect our little remaining debt capacity toward a very different and even more prosperous future. The word "bold" was peppered across the first half of the 19th Assembly, but this budget is not bold. Instead, I want to see this government take risk by rethinking the way it serves its residents and developing realistic budgets to implement the most desired futures while preparing to prosper through the worst-case scenarios. We need to make budget decisions that position us with the flexibility, strength, and courage to choose wisely and be well prepared to pivot. I hope the government renewal process will evolve GNWT program evaluations to focus on outcomes and value for dollar of the programs. In keeping with that I would like to see the government move to a results-based budget format in the future, Mr. Speaker.
Mr. Speaker, this seems like a good place to end. But I'm not done. And I ask that if you only remember one thing I say today in response to the 2022-2023 Budget Address, remember this: The Housing Corporation cannot meet its mandate with a capital investment of $11 million.
The Housing Corporation owns 2500 public housing units. At an average cost of $600,000 per unit, the Housing Corporation holds $1.5 billion dollars in public housing assets. The industry standard for O and M costs to upkeep units is 2 percent per year. That is $30 million for 2500 units. The standard life of a public housing unit is 50 years. And industry standard says that the annual cost of unit replacement is 2 percent per year. This is another $30 million. This means, Mr. Speaker, that the average cost to maintain 2500 public housing units is $60 million a year. This budget allocates $11 million in capital funding to the Housing Corporation, leaving an annual shortfall of $49 million.
Mr. Speaker, you might be thinking but what about all of those federal funding announcements? And this is great news story. But the new funding from the federal government is not for operations and maintenance or replacement of existing stock. It is to build new stock.
The Housing Corporation has to fulfill its mandate to provide suitable, adequate and affordable housing and has a fiscal responsibility to upkeep and care for those investments. This budget does not do that. The NWT Housing Corporation cannot be responsible for its mandate within this budget.
This session, Regular Members have spent hours grilling the NWT Housing Corporation about the GNWT's investment in housing. The Housing Corporation responded that it follows the budgeting processes of the government. But over the last ten years, the Housing Corporation has seen incremental increases of 31 percent to its budgets while the GNWT has seen an average increase of 51 percent to its overall budget. In this budget alone, we see a 13.9 increase to the Department of Finance.
In truth, Mr. Speaker, this is not solely on the Housing Corporation. This responsibility lies with all of Cabinet who have heard Regular Members, for three budgeting cycles, beg for increased funding to housing, who demanded it in budget negotiations, and now I stand here with the main estimates for Housing Corporation that is lower than the previous two years. Do not tell me that Cabinet hears our demands because these numbers show they clearly do not. This budget shows that housing is not a key priority of this government. Thank you, Mr. Speaker.