N.W.T., Nunavut and Yukon blew their budgets by $2.6B over 15 years

The three territorial governments blew their budgets by a combined $2.6 billion from 2000 to 2014, a new study from the C.D. Howe Institute reports.

The study, called "Controlling the Public Purse: The Fiscal Accountability of Canada's Senior Governments," found that Nunavut, the Yukon and the Northwest Territories respectively spent $1.4 billion, $675 million and $543 million more than they annually budgeted over the 15-year study period.

"The prairie provinces and the territories [showed] the biggest overruns relative to the size of their budgets," stated a summary of the findings.

During the same period, the territorial governments raised a combined $1.4 billion more in revenues than they initially projected, though not enough to cover the $2.6 billion spending overage.

'Logistical costs'

The report comes at a time when the cash-conscious N.W.T. government is warning of potential program cutbacks, saying it needs to raise and/or save $150 million over the next five years.

But Yellowknife North MLA Cory Vanthuyne says some perspective is in order.

"We are clearly a small population that lives in a vast geographical area with extremely harsh conditions at times and this leads to a number of influencing factors."

He said those include little or no competition for bidding and building on large infrastructure projects and "logistical costs around labour and materials that have to be transported, accommodated, secured.

"All of these factors can be very challenging to accurately estimate in the beginning, especially given that we are building a number of these projects for the first time and do not have past experiences to learn lessons from."

"For these reasons and others," added Sahtu MLA Danny McNeely, "we should review a structure on project management oversight. Otherwise we will continue to experience [construction delays] and cost overruns."

N.W.T. financial documents could be clearer: MLA

The C.D. Howe report also looked at the quality of financial reporting by the governments — namely, whether "an intelligent and motivated non-expert — a citizen, taxpayer or legislator — could find valid consolidated numbers for revenue and spending in the budget each government presents at the beginning of the year and in the financial statements released with its public accounts at the end of the year."

"Legislators and Canadians generally should insist on better financial information from governments and use that information to hold governments to a higher standard when it comes to hitting their budget targets," said the report's co-author, Colin Busby, in a media release accompanying the report.

The N.W.T. and Nunavut each scored an "E" on that front, with the Yukon faring better with a "C+" grading.

Overall — when sized up according to both their spending overruns and how clearly they report their finances to John Q. Public — the N.W.T. and Nunavut received "F"s, while the Yukon got a "C+" and special mention for having its more recent budgets more closely align with its audited public accounts.

"The Standing Committee on Government Operations recently reviewed [our] public accounts," said N.W.T. MLA Kieron Testart, who represents Yellowknife's Kam Lake constituency.

"I can say personally that I find our government needs to substantially improve the clarity of its financial reporting and ensure that information about public spending is delivered in a manner that is clear and easy to understand for members of the public.

"Spending money is how our government delivers on its commitments and is a clear indication of its real priorities. We need to ensure that Northerners can understand and see how their dollars are being spent."

The N.W.T. Department of Finance is set to release the government's full 2016-17 budget later this spring.