N.W.T. forecasts $39M deficit, $790M capital budget

The Northwest Territories government now expects an operating deficit of $39 million this fiscal year, Finance Minister Caroline Wawzonek told the legislature on Wednesday, reversing a planned surplus of $20 million for 2026-27.

Wawzonek also tabled a capital budget for the year ahead worth more than $790 million, nearly double the previous one, Cabin Radio reported. More than $400 million of it is tied to highways, including initial work on the Arctic Corridor and the Mackenzie Valley Highway. It is not yet clear how much of the spending federal dollars will cover.

Wawzonek said the swing to a deficit comes from extra costs such as expensive diesel to make up for low water levels in hydro systems and the cost of fighting wildfires. This year was the third-worst this century for area burned in the territory.

She said the closure of several diamond mines and Imperial Oil’s Norman Wells oil field means the territory expects its gross domestic product to keep declining, although employment and average earnings “have held up better than forecast.”

“Current projections indicate that operating expenditures will continue to grow faster than revenues, resulting in projected deficits over the medium term,” Wawzonek said. “This is not a sustainable trajectory indefinitely.”

The minister said the territory needs to spend to take advantage of promised federal investment in major projects and military infrastructure, as well as on education and health care, while revenues are strained. She said the planned capital spending would generate $320 million in economic activity and support the equivalent of 1,750 full-time jobs, but that actual spending “will likely be much lower” than the estimates because the timing of major projects depends on many factors.

“That may require difficult decisions about project timing and priorities, but those decisions are necessary to protect long-term fiscal sustainability,” she said.

The speech came during a busy week in Yellowknife. The assembly’s cabinet changed when Denny Rodgers was named N.W.T. health minister, and in Nunavut, the city of Iqaluit is weighing a $216-million capital budget. Mining is also shaping northern finances, as shown by the planned $140-million sale of Yukon’s Eagle gold mine.

The figures come from Wawzonek’s address as reported by Cabin Radio, which is the only outlet we have found with full details so far. We will update this story as the territorial government releases its budget documents.

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Source: Cabin Radio