N.W.T. lost 4,000 jobs this year, public sector helped stave off further loss, says finance minister

The Northwest Territories lost approximately 4,000 jobs this year due to COVID-19. But jobs are expected to bounce back to almost pre-pandemic levels by the end of the year, according to the territory's finance department.

The department hosted a fiscal update on Monday. The briefing touched on costs related to the COVID-19 response and a recent labour market and job recovery report.

Caroline Wawzonek, minister of Finance, led the online meeting, alongside Sandy Kalgutkar, the deputy minister of Finance, Jamie Koe, deputy secretary to the Financial Management Board and Terence Courtoreille, director of the Management Board Secretariat

Wawzonek said many of the jobs lost were held by fly-in workers.

Vast majority of losses in service sector

She said the mining sector began to slow in January, though there was an uptick in tourism. By April, which marked the first full month of COVID-19 public health measures, there was widespread loss across sectors, particularly in construction, hotels and restaurants. Grocery stores, which were deemed essential services, saw an increase in employment.

May and June mostly continued on the same track, with restaurant jobs down 48 per cent, Wawzonek said. In total, service sector jobs comprised 81 per cent of all N.W.T. job losses since the start of the year.

There was also unexpected job losses in the health sector, explained by less locums travelling into the territory, Wawzonek said, as well as the closure of nonessential medical businesses like dentists and other therapies. The jobs in the health industry are still below what they were last year, down by about 7.5 per cent. 

"The reopenings have not all been to full capacity at those facilities," Wawzonek said. 

Not as severe as anticipated

The job declines were less severe than initially anticipated at the start of the pandemic, the territory said.

That's because many industries, in response to the pandemic and the health measures put in place, kept staff on and reduced hours.

The size of the government sector also acted as an economic stabilizer, since the almost 8,000 people employed in the public sector continued to work from home and had their wages and salaries continue uninterrupted and without reduction.

The number of N.W.T. jobs are expected to return to nearly 90 per cent of its pre-pandemic level by end of 2020.

"This projected job recovery of course does not mean the overall economy will necessarily return to it's pre-pandemic structure," Wawzonek said.  

Those returning jobs might also not be evenly distributed across sectors and job quality might not be the same, Wawzonek says. For example, some jobs dependent on international markets or tourism might take longer to come back. The jobs that do come back might also have lower wages or might not be full-time. 

Revenues drop

The path forward may still be "unsustainable," the territory said, since both operational and capital spending is exceeding revenue growth. That's despite federal transfers, which increased by $85 million for COVID-19 relief and partially offset some of the loss.

Federal transfers went in part toward support for airlines, essential workers and education, as well as a safe restart agreement.

The N.W.T.'s taxation and other own-source revenue was down to $347 million from the earlier reported $368 million, which is attributed to foregone revenue and fuel and payroll decreases. Resource revenue also fell to $3 million from $33 million.

The territory said that's because of the lack of profits in diamond mining which reduced royalties.

"Action will need to be taken quickly to ensure sufficient borrowing room remains for the next Legislative Assembly," Wawzonek said.

"Looking a few years down the road, we see that we still are going to continue to approach even our new borrowing limit."