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The Globe and Mail

NWT budget predicts $200-million surplus as territory calls for more people

Inuvik, NWT, is seen in December, 2013. Figures show the Northwest Territories’ population dropped slightly last year as the cost of a significant loss of revenue such as income tax.


The Northwest Territories needs 2,000 new residents over the next five years, according to the budget tabled in the legislature.

"In 2013, the natural increase in our population did not keep pace with the number of people leaving for opportunities elsewhere," Finance Minister Michael Miltenberger said Thursday in his budget speech.

"A stagnant or declining population over the medium term reduces economic growth and our ability to fund programs and services critical to northerners. If we are to stem this trend, we must do things differently."

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Figures from October, 2013, indicate 43,523 people lived in the NWT – a decrease of 0.2 per cent from the previous year.

The budget forecast a $200-million surplus on spending of about $1.6-billion, but declining income-tax revenues reveal the consequences of a stagnant population.

The government collected $105-million in 2012-13 and $87-million last year – even less than anticipated.

"We need to come to grips with that," Mr. Miltenberger told reporters before the speech.

He said the continued high rate of fly-in, fly-out workers, inadequate results from the immigrant-nominee program and the loss of young people who don't return after heading south for education are all concerns. Discussions are already happening with other governments and businesses on how to attract and retain more northerners, Mr. Miltenberger said.

The figure of 2,000 "just seems reasonable," he said.

"It's big enough that everybody will pay serious attention to it and it's not unachievable."

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Every new NWT resident brings in another $30,000 from the federal government. That means Mr. Miltenberger's population goal could bring in as much revenue to the territory as its entire net take from getting control over its natural resources.

Ottawa signed over that control last fall in a devolution agreement that takes effect in April.

Net revenue from resource royalties is expected to be about $60-million – $15-million of which is pegged to go to aboriginal governments.

Most of the money will go toward large infrastructure projects, but the territory will set aside 5 per cent in a heritage fund, that is to be invested in a trust that can't be touched for at least 20 years.

"The intent is to make it as politically tamper-proof as possible," Mr. Miltenberger said.

The territory's overall economy is anticipated to do well. Construction on mines and roads and energy exploration should drive growth of 3.1 per cent.

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Infrastructure remains a major focus. The government plans highway improvements, a north-south fibre optic link, liquid natural gas projects and hydro transmission lines. Spending on such projects is budgeted to decline to $230-million from last year's $285-million, but officials note that more money may become available after the federal budget is tabled.

Mr. Miltenberger said persuading Ottawa to increase the territory's legal debt ceiling from $800-million to $1.8-billion is key to advancing those projects.

"It's a critical issue," he said. "We're not asking the federal government for money. We're just asking for the ability to make strategic investments. Without that, there's not going to be the kind of nation-building capacity that our jurisdiction needs."

About three-quarters of the NWT's budget comes from Ottawa. It has an Aa1 credit rating and one of the lowest debt-to-GDP ratios in Canada.

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