INTRODUCTION
From November 2025 to February 2026, the Standing Committee on Public Accounts (Committee) reviewed the 2024-2025 Public Accounts. The Public Accounts are the audited financial statements that show the financial results of the Government of the Northwest Territories (GNWT) for a fiscal year, as well as its Government Reporting Entities (GRE). The GNWT fiscal year runs from April 1 of one year to March 31 of the next calendar year.
The 2024-25 Public Accounts were made public by the Minister of Finance in November 2025 and tabled in the Legislative Assembly on February 9, 2026. On December 9, 2025, Committee held a public briefing to review the 2024-25 Public Accounts. Participants included staff from the GNWT's Office of the Comptroller General (OCG) and the Financial Audit Team from the Office of the Auditor General of Canada (OAG). Committee presented CR 38-20(1) Report on the Review of the 2024-25 Public Accounts to the House on March 3, 2026.
To further support its ongoing review of capital funding delivery, value for money and transparent reporting within the Public Accounts, Committee invited the Department of Municipal and Community Affairs (MACA) to provide a public technical briefing on community government infrastructure funding and support. The briefing was held on April 27, 2026.
Community Government Infrastructure Funding Framework
MACA administers a substantial portfolio of community government infrastructure funding delivered through both ongoing territorial programs and long-term federal agreements. At the time of Committee's review, this portfolio totaled approximately $282 million.
Ongoing annual funding available to community governments totals approximately $53 million per year, consisting of $35.3 million in Community Public Infrastructure (CPI) funding and $18.7 million through the Canada Community Building Fund (CCBF). These programs provide predictable funding that communities may accumulate or leverage over time. MACA reported that since 2007, more than $315 million has been invested through CPI funding, while CCBF investments since 2005 total approximately $232 million.
In addition, MACA manages several application-based federal infrastructure programs. The Small Communities Fund (SCF) provides $38.4 million between 2015 and 2028 for thirty-five projects across all communities. As of 2025 to 2026,
twenty-one projects were complete, seven were in progress, and five had been cancelled at the direction of community governments.
The Investing in Canada Infrastructure Program (ICIP) provides $117.3 million for eighty-five community projects between 2018 and 2034. As of March 2025,
twenty-three projects were complete, forty-two were in progress, and twenty had not yet started. Total expenditures under the program were $50.4 million, with remaining funding reallocated to future years based on revised project timelines.
The Canada Housing Infrastructure Fund (CHIF), signed in 2025, provides $74 million over ten years to support housing enabling infrastructure. MACA's presentation noted that three projects were approved at the time of Committee's review, with additional projects in the approval phase.
In the briefing, MACA advised that differences between budgeted and actual expenditures under these agreements primarily reflect project timing, as communities have long completion windows and are reimbursed for eligible costs once construction proceeds. Committee's review focused on whether existing funding structures, and departmental supports are sufficient to ensure equitable access, value for money, timely project delivery, and transparent public reporting.
FINDINGS AND RECOMMENDATIONS
Training, Regional Engagement and Asset Management
MACA described efforts to provide training related to capital planning and asset management, including the rollout of a new asset management system. Committee supports this initiative but is concerned by limited uptake and use across communities. Committee heard that only a small number of communities are actively using the system, suggesting that training, follow-up, and ongoing support may need to be strengthened. Committee also heard that knowledge retention and availability can be challenging where there are limited contractors or tradespeople, or where there is turnover of key positions, such as Senior Administrative Officers (SAOs).
Committee members emphasized that effective infrastructure delivery depends not only on funding and technical processes but also on relationships, trust, and practical knowledge within communities. Committee members have heard from residents in the communities that training delivered exclusively in Yellowknife is often inaccessible or ineffective for community staff and that more in-community and regional training is needed.
Committee concludes that training should be delivered through a standardized and predictable regional program that emphasizes face to face engagement, regular schedules, and continuity of support.
Project Delivery, Capacity and Delays
MACA identified several reasons why approved projects may be delayed, including changes in community priorities, limited contractor availability, staffing turnover, transportation challenges, and the need to respond to natural disasters. Committee accepts that many of these factors are inherent to infrastructure delivery in the NWT and are often outside the direct control of the department or the community government.
However, Committee remains concerned that persistent capacity limitations within community governments are a core driver of delays and under spending, particularly in smaller and remote communities. These challenges include limited experience with federal application processes, difficulties meeting cost sharing requirements, turnover in SAO positions, and limited access to project management and technical expertise.
Committee heard that while MACA provides a range of supports, access to these supports is uneven across regions and constrained by vacancies and workload pressures within the Department. Committee is particularly concerned by longstanding vacancies in regional capital planning positions and the practice of attempting to offset these gaps through positions based in Yellowknife. Committee does not consider this an effective substitute for sustained, regionally embedded support and notes that communities most in need of assistance are often those least able to access Yellowknife-based resources.
Committee notes that the Report on the Review of the 2024-25 Public Accounts, presented in March 2026, also made recommendations related to improving capacity in communities. Specifically, Committee recommended that the GNWT establish dedicated funding and technical supports for capital planning, project management, and financial administration, to be made available to community governments who demonstrate a need for additional capacity.
Committee discussed the growing complexity and volume of infrastructure administration and the disproportionate burden this places on small community governments with limited staffing. In this context, Committee highlighted the potential role of emergent artificial intelligence (AI) tools to support routine and time-intensive administrative functions. Examples discussed in Committee's deliberations included drafting funding applications, preparing procurement documents such as requests for proposal, and supporting basic financial analysis. Committee emphasized that early adoption of well-governed AI tools could allow community governments and the GNWT to realize efficiency gains and reduce administrative burden.
While Committee recognizes the risks related to accuracy, data protection, bias, and oversight associated with AI systems, Committee also acknowledges that these tools can meaningfully reduce administrative effort when implemented responsibly and with meaningful controls. Committee agrees that these tools should not replace professional judgment, accountability, or decision-making authority, but can serve as a practical support within a broader, government-led capacity-building strategy.
Committee notes that the GNWT has indicated it does not intend to develop AI policies or rules, instead relying on existing information management rules and a high-level guideline for AI use. Committee notes that the GNWT's AI guidance states that “the GNWT should establish clear rules and responsibilities for using and managing generative AI programs so they work properly, are unbiased, and have proper oversight,” yet has no plans to do so.
Implementation of the Recommendation of the Auditor General
Committee reviewed the changes made to the reporting of major federal infrastructure programs following recommendations from the OAG related to transparency and capital estimates reporting. At the time the ICIP and the SCF were signed, funding was recorded as disbursements funded by third parties using notional cash flow schedules that assumed early project delivery. This approach resulted in large year end variances when projects did not proceed as originally forecast, creating confusion about whether funding had lapsed or been lost.
In response to the OAG's recommendation, the Department shared that it implemented a change to shift these programs into the Capital Estimates and to more closely align budgets with realistic project timelines. Committee heard that MACA has since worked with communities to redistribute remaining program funding across future fiscal years based on updated construction schedules, particularly following program extensions due to the COVID 19 pandemic.
Committee is satisfied that the Department has taken the OAG's recommendation seriously and has made meaningful improvements to how these programs are budgeted and reported. Committee agrees that the adjusted budgeting approach improves transparency, more accurately reflects multi-year infrastructure delivery realities, and reduces the appearance of significant year end lapses where no funds have been lost. Committee will continue to monitor whether these improved reporting practices are consistently and clearly communicated and looks forward to seeing the improved budgeting process reflected in the 2025-26 Public Accounts.
Auditing Grants, Contributions and Transfer Payments
As part of its review of community government infrastructure agreements, Committee noted the role of grants, contributions and transfer (G&C) payment programs in the delivery of GNWT services and infrastructure. Given the significant proportion of public funds delivered through these mechanisms, Committee notes the importance of confirming that current processes are effective and efficient, that governance, risk management, and internal controls are operating effectively, and that these arrangements demonstrate value for money.
The question of value for money is of particular importance when considering MACA, where G&Cs account for more than 80% of the Department's operations budget. As a result, MACA's ability to achieve its objectives is heavily dependent on the effectiveness of the frameworks and processes used to administer and oversee funding provided to community governments and other recipients.
Committee notes that this characteristic is not unique to MACA. Across the GNWT, approximately 48% of total operations expenditures are flowed through to third parties and community and Indigenous governments in the form of G&Cs. Accordingly, a significant portion of GNWT operational spending relies on the effectiveness of governance frameworks, administrative processes, and oversight mechanisms that sit between departments and ultimate recipients, rather than within direct program delivery.
In this context, Committee reviewed the 2024 Audit of the Administration of Grants and Contributions conducted at Environment and Climate Change Canada (ECCC). That audit found that rapid growth in ECCC's G&C funding, combined with decentralized delivery models, fragmented and uncoordinated oversight, and inconsistent processes, limited the department's ability to demonstrate value for money in its delivery of G&Cs. Administrative complexity, duplication of effort, and uneven application of controls increased costs without commensurate improvements in outcomes for recipients, and in some cases delayed the flow of funds. The audit further found that significant structural aspects of the Department's G&C administration, including program authorities, terms and conditions, program architecture, and the departmental results framework, must evolve for program officials to fully implement a recipient-focused delivery model, particularly in relation to Indigenous recipients.
Given the scale at which public funds flow out of GNWT departments through grants, contributions, and transfers, Committee is of the view that a similar audit would provide meaningful insight into whether current governance and administrative structures are supporting efficient flow of funds, delivering value for money, and best serving the needs of the recipients. Committee emphasizes that value for money in this context includes not only financial compliance with the terms of the agreements, but also the efficient use of administrative resources, proportional oversight, reduced complexity, and the timely translation of funding into intended results.
CONCLUSION
This concludes the Standing Committee on Public Accounts' Report on the Review of the 2024-25 Public Accounts, No 2: Community Government Infrastructure Agreements. Committee looks forward to the Government's response on the implementation of these recommendations.
