New funding model will be a boost for larger N.W.T. communities, but some say it still falls short

Larger communities in the N.W.T. will soon see a boost in their territorial funding to maintain infrastructure and deliver services — like water and waste management — but the increase still falls short of what communities need. 

Starting in April 2025, the Government of the Northwest Territories is rolling out a new way to fund communities, with more money to be allocated to municipalities with more assets. That means hubs like Inuvik, Hay River, Fort Smith, Fort Simpson and Yellowknife will see a boost.

Yellowknife Mayor Rebecca Alty says that while every bit helps, the change won't come close to the additional $9 million the capital city needs to be properly funded.  

"It's not about frilly things, it's about being able to just provide the core and essential services," Alty said. 

"We need every little dollar to be able to make those just core projects — to be able to get the water to your house, to be able to get the sewage pulled from your house, to be able to pick up your garbage and to be able to dispose of it properly." 

Sara Brown, CEO of the N.W.T. Association of Communities, said that even with the change, communities will still face a funding gap to the tune of 35 per cent. She wasn't sure of the exact amount but she said that in the 19th Legislative Assembly the funding gap was about $5 million. Now, it's more, she said. 

Still, Brown says the change will be better than the current system for funding communities, which she calls "black-box accounting."

"Nobody quite knew where the numbers came from," she said. 

Finding ways to spend money 'not a problem'

Based on calculations under the new formula, which allocates money based on needs, some communities have been getting less than 60 per cent of what they need to properly function, while others are getting more than 100 per cent. 

The Department of Municipal and Community Affairs (MACA) hasn't yet finalized how the funding will be allocated between capital and operational needs so leaders can't yet say what projects the boost will fund. 

But Darrell White, SAO for Fort Simpson, says whatever the territory is offering will help.

"We always can find ways to spend their money and invest in the community, that's definitely not a problem," he said. 

White says they're especially keen to continue FireSmarting work in Fort Simpson.

10 years since recommendations

The new model is based on recommendations from a committee in 2014. Gary Brennan, MACA's deputy minister, says there are a few reasons it's taken a decade to implement the change.

One, he said, is the concerns from small communities. 

Brennan said that when the recommendations were initially presented, the government decided to "red-circle" those smaller communities to keep providing the same funding while they tried to identify new money.  

Then, in the 19th assembly, it was a legislative priority to reduce the municipal funding gap.   

That assembly was also dealing with the COVID-19 pandemic and natural disasters, but in 2022 the territory formed another working group to revisit the municipal funding model. By 2023 the group was ready to finalize the policy but was delayed by the territorial election that year. 

Now, Brennan says, the group is "ready to pull the pin on this thing," as it finishes meeting with community leaders to talk through the changes. 

The group never found the additional funding for the "red-circled" small communities. 

The new funding formula takes effect in April and be implemented over a three-year transition period. Brennan says that's intended to help the communities that will be getting less. 

"We get it, we understand that communities are underfunded in general, we understand the cost of living is increasing," Brennan said. 

"But at the end of the day, we're looking to try to make things more equitable across the board, and how we do that is through this policy."