'Municipalities are bleeding money': 2 N.W.T. mayors say federal money isn't enough

The mayor of Yellowknife says infrastructure money coming from the federal government isn't going to cover the more than $2 million in losses it expects this year due to the COVID-19 pandemic.

Rebecca Alty said $1.7 million Yellowknife is getting out of the federal gas tax fund has already been accounted for, and will go toward capital projects, like road and sewer maintenance. But she said what the city needs right now is help with operating costs.

"It doesn't really help in the COVID-19 stuff," said Alty. "We've already had our budget approved for that money, so it doesn't have much of an impact for us." 

On Monday, the federal government announced it would fast-track the delivery of $2.2 billion in municipal infrastructure spending to help cities and towns deal with the fallout from COVID-19. Of that, $16.5 million will go to Northwest Territories communities.

This money isn't new though. It was approved in the 2019 federal budget.

What Monday's announcement does mean for Yellowknife, said Alty, is a lump sum in June rather than two separate payments later on — one in August and another at the end of the year.

The money won't, however, help Yellowknife recoup revenue lost from the closure of city facilities, and the waiving of parking and transit fees, as well as late fees on property taxes. 

"It is a substantial hit," said Alty, of the city's lost income. "We've put in a request with the territorial and federal government to support those operating costs, because that's where we're really feeling it."

City intends on balancing budget

Rather than impose a big tax increase, the city plans to draw on its reserves in the general fund to help cover unexpected losses and balance this year's budget, said Alty. 

Meanwhile, facilities like the pool and hockey arena remain closed to prevent the spread of the coronavirus. 

Alty said "it's tough to say" right now whether the city will make cuts to programs, services and staff. 

Without emergency funding, municipalities are out of options.- Lynn Napier, Fort Smith mayor

"We're trying to be as creative as possible when we know there'll be impacts," she said.

Alty said the city is developing its own reopening plan and hopes to send it to the territorial government for approval in the next couple weeks.

Emergency funding needed, says Fort Smith mayor

Lynn Napier, the mayor of Fort Smith, N.W.T., and president of the NWT Association of Communities, said COVID-19 has many Canadian municipalities facing deficits.

While the expedited federal gas tax money may help communities with some immediate cash flow issues, she said, that funding isn't new and "it doesn't really address the crisis that communities across Canada are facing in non-recoverable losses."

Much like Yellowknife, Fort Smith is facing reduced income from user fees and added expenses from the increased use of technology

"Across the board, cities and municipalities are bleeding money," said Napier. 

Northwest Territories communities are already underfunded, collectively, by about $30 million a year, she said, with Fort Smith needing around $3 to $4 million more annually. And that was before COVID-19.

Municipalities can't take on debt, said Napier, and a major property tax hike or cut to basic services, like water and sewer isn't the answer, either. 

According to the territorial Cities, Towns and Villages Act, municipalities can take on debt in limited circumstances and if they meet a specific set of criteria, including, in some cases, ministerial approval.

"Without emergency funding, municipalities are out of options," said Napier.