N.W.T.'s 'robust' economy does not warrant job cuts: report

The Northwest Territories' economy is doing better than its government claims, meaning it shouldn't have to cut 135 public service jobs, according to a report released Tuesday.

The report by Parkland Institute associate David Thompson came in response to the proposed layoffs, which are part of Premier Floyd Roland's plan to cut $135 million from the territory's next two budgets and redirect it toward government projects.

Earlier this year, Roland said the territory would face "serious financial difficulties" if the government allows its spending to grow faster than its revenues.

But Thompson's report — released Tuesday by Yellowknife social justice group Alternatives North and the unions representing territorial government employees — argues that the N.W.T.'s growing revenue is actually exceeding government spending.

"The N.W.T.'s economic health appears to be very robust. The N.W.T. has the highest GDP per capita in Canada — 40 per cent higher than that of oil-soaked Alberta," Thompson wrote in his report.

"Statistics Canada recently confirmed ongoing GDP growth, reporting 2007 growth of 13.1 per cent — the highest in Canada and substantially higher than that of China," he added, also pointing to the N.W.T.'s low unemployment rate and high average incomes compared to the rest of Canada.

The report states that the N.W.T. government has had a growing surplus since 2004, currently at $109 million. The territory's debt was down to $6 million by March 2007, meaning it has likely been paid off this spring, Thompson added.

Budget coming down

Details of the budget and job cuts are expected to be made public when Roland, also the N.W.T.'s finance minister, delivers the budget later this month. Roland was not available for comment on Tuesday.

But a number of territorial government workers have already been informed that their jobs may be cut, according to the Union of Northern Workers and the Public Service Alliance of Canada. An additional 88 vacant positions within the territorial civil service are expected to be eliminated.

The budget has to be approved by MLAs in the legislative assembly before any cuts take effect.

In his report, Thompson argues that the territory's economic growth can support government spending without cuts.

Instead, he says, the government could consider bringing in new taxes on retail sales or capital investment, or raising existing taxes on liquor, fuel, large corporations or top income earners.

"In light of the government's healthy financial picture, and the strong N.W.T. economy, there would appear to be little reason to continue with the public service cuts," Thompson wrote.

"In light of the harm they could cause to families and communities in the N.W.T., the government should conduct a detailed re-examination of its financial outlook, taking into account the truly 'enormous' and 'unprecedented' growth that the N.W.T. is about to experience."

Thompson warned that the total 223 job cuts being proposed would be felt outside the territorial civil service, as other jobs would be affected across the economy. Front-line government services would also be affected, he said.

"Depending on the areas cut, and what is done with the salaries of those eliminated positions, the economic multiplier effect of cutting $135 million … could be losses on the order of another 1,000 jobs," the report says.

Thompson's report was published by the Parkland Institute, a public policy think-tank at the University of Alberta in Edmonton.