Layoffs, other savings needed to fund projects: N.W.T. deputy minister

The Northwest Territories' deputy finance minister says layoffs from the territorial civil service, along with other cost-cutting measures, are needed to pay for construction projects and services for residents.

A report released earlier this week is critical of the government's plans to cut 135 government jobs as part of its move to slash $135 million from the next two budgets.

The report, written by public policy analyst David Thompson of the Parkland Institute at the University of Alberta and commissioned by members of Alternatives North, a Yellowknife-based social justice group, suggests that the N.W.T. government is justifying the cuts by inaccurately portraying itself as being in hard times when the territory actually has healthy finances.

But deputy minister Margaret Melhorn said the cost-cutting measures are more about funding government priorities — such as dealing with aging infrastructure — than about balancing the books.

"The legislative assembly has identified a number of priority areas, and if the government wants to make investments in those areas to help move those priorities forward, then there has to be some money identified," she said Wednesday.

Melhorn said the Parkland Institute report focuses on government's proposed cost cuts, ignoring the need for increased spending.

The N.W.T.'s infrastructure, from schools to public housing, needs to be replaced or repaired, she said. The government spends about $100 million a year on construction projects, and it plans to add $50 million to that amount in the coming years, she added.

Premier spoke of financial difficulties

Melhorn's message differs from that of Premier Floyd Roland earlier this year, when he announced his plan to cut $135 million from the next two budgets.

In January, the premier, who is also finance minister, warned of "serious financial difficulties" ahead if the government does not change its spending.

"If we continue to allow our expenditures to grow faster than our revenues, we'll experience serious financial difficulties by the end of this assembly," Roland said on Jan. 22.

A Finance Department document on the territory's fiscal framework from 2004 to 2008 also states that the territorial government is facing "a fiscally unsustainable situation" in which "expenditure growth is forecast to exceed revenue growth unless measures are taken to counter the trend."

However, the Parkland Institute report says the N.W.T. government has recorded surpluses the last four years, paid down its debt, and is actually on healthy financial footing.

Roland was not available for comment on Wednesday.

The territory's full spending and cost-cutting picture won't become clear until Roland delivers the budget on May 22.

But some other MLAs and the unions representing territorial civil servants have already criticized the cuts the government is proposing, arguing that cutting jobs like recreation co-ordinators and court workers conflicts with the legislative assembly's priorities.