N.W.T. government announces review aimed at freeing up $150M annually

The N.W.T. government has announced a strategy to find an additional $150 million annually through a combination of spending cuts and revenue increases starting in the 2024-25 fiscal year. 

The strategy, titled Restoring Balance: A Fiscal Sustainability Strategy for the 20th Legislative Assembly, was presented on Monday.

At the centre of it is a government-wide program review aimed at trimming expenses. In a news release issued on Monday, the territorial government said the review will "determine inefficiencies and duplication in resources." The review is being carried out over the next few weeks.

N.W.T. Premier R.J. Simpson said at a news conference on Monday that each department will be asked to review its programs and services, which may lead to some programs and services being merged. 

The findings of the review, and a separate initiative to look at ways to increase revenues, will be in the N.W.T.'s 2024-2025 operating budget. The budget is scheduled to be debated in the Legislative Assembly in May.

The Restoring Balance strategy sets a target of lowering the short term debt by $150 million by March 31, 2028, the end of the 20th assembly. 

In the document, the territory writes that the strategy is needed because of the growth of the public service, escalating health-care spending, and the N.W.T. not receiving enough money from the federal government to pay for its programming.

According to the strategy, the territorial government's workforce grew by 27 per cent, or 1,391 positions since 2019-2020.

Caroline Wawzonek, the N.W.T.'s finance minister, said the announcement is not to warn of job cuts as the government hopes to instead limit the growth of the public sector. 

"I do not want people to presume that this is about job cuts, it's not. We are experiencing labour market shortages across sectors and we need our public servants," she said. 

Revenues are projected to grow by around 3 per cent a year, while expenses are expected to increase by 4.5 per cent each year.

"The Government of the Northwest Territories can not continue to rely on Canada to increase our funding or our borrowing limit, we are responsible for ensuring that our financial situation is sustainable and that our financial house is in order," Simpson said. 

The fiscal update also says that disasters caused by climate change have added challenges. Although the costs are subsidized by the federal government, the time it takes to be reimbursed adds to the territory's "borrowing pressures and costs."  

Other goals outlined in the document include fully funding capital projects from operating surpluses instead of borrowing.

The government says the review will involve input from all territorial government employees. 

There will be a web-based survey where employees can provide anonymous feedback and suggestions about where efficiencies can be found.

The release said several factors will be considered in the review of government programs, including:

• Is the program required by legislation?
• How broadly is the program delivered?
• Does the program relate to a priority set by the Legislative Assembly?
• How would external stakeholders be affected by a change to the program?
•  What impact would a reduction in the program's budget have on the territorial public service?