In what may be the last budget before Ottawa hands the territory long-awaited control over natural resources, Finance Minister Michael Miltenberger said the N.W.T. should end up $113 million in the black this year with no major initiatives or tax increases.
"We're staying the course; we're trying to control our expenditures," Miltenberger told reporters before he delivered his budget speech in the territorial legislature Thursday.
"Next year ... we're going to start reaping the benefits and fruits of some of our labour."
The 2013-14 budget is similar to last year's in that it keeps spending flat at about $1.5 billion and earmarks most of its surplus to debt repayment. It's the second budget in a four-year plan intended to rebuild the territory's cash reserves and give it more borrowing room to ramp up spending on long-awaited infrastructure projects in the third and fourth years.
The projects include a paved highway from Inuvik to Tuktoyaktuk, which would complete Canada's first road link to the Arctic coast. Another project is a fibre-optic link connecting communities down the Mackenzie Valley — where most of the territory's population outside Yellowknife lives.
Liquid natural gas projects and hydro transmission lines are also on the territory's $3-billion infrastructure list.
Miltenberger said spending on such projects is planned to increase from about $134 million this year to about $180 million each in 2014 and 2015.
By then, the territory also hopes to have access for the first time to royalties generated from its natural resources. Those royalties now go to the federal government.
Miltenberger said an agreement on devolution — in the works for more than a decade — is expected in the coming weeks and should take effect in April 2014.
That would bring the N.W.T. an extra $60 million a year. One-quarter would go to aboriginal governments and the territory would use the rest to repay debt, finance infrastructure and pad its savings.
Miltenberger was adamant that resource royalties would not be used on program spending. He said the N.W.T. wants to follow the example of Norway, where oil revenues are kept separate from general revenues.
Paying for ongoing expenses with resource money, as Alberta does, creates volatile budgets that depend on the whims of international markets, Miltenberger said.
"(Alberta) fully integrated all their resource revenues into their economy and it makes them — and it would make us, if we did the same thing — very, very vulnerable if there's significant price fluctuations."
Miltenberger said spending resource money on projects such as energy infrastructure would lower the cost of living and dramatically leverage economic growth. He said there are 21 potential energy and mineral developments in the Northwest Territories, which could bring in up to $21 billion of investment.
"A lot of these big projects are dependent on access to reasonably priced energy to be viable and we intend to address that."
Lower-priced energy would also extend the life of current mines and could reinvigorate shuttered projects.
Overall, the N.W.T. expects revenues of about $1.6 billion, 70 per cent of which will come from the federal government. Its overall debt is expected to fall to $581 million out of its federally mandated borrowing limit of $800 million.
It's the second surplus in a row for the territory. Last year, it was $99 million.
The N.W.T.'s debt to GDP remains one of the lowest in the country. It maintains its Aa1 credit rating, one of Canada's highest.
— By Bob Weber in EdmontonSuggest a correction