Thank you, Mr. Chair.
I'd like to thank the standing committee for the opportunity to meet with you today here in Yellowknife as part of your pre-budget consultations. Finance Minister Miltenberger regrets that he isn't able to meet you, as he's travelling on government business.
The Northwest Territories saw tremendous economic growth over the last 10 years, but we have not escaped the effects of the global downturn. There have been temporary shutdowns and layoffs in our mining industry, and exploration has slowed substantially.
The downturn will negatively affect our government's finances, but we are prepared to maintain spending to sustain economic activity. Canada's contributions through the economic action plan have been a welcome and important addition to our plans.
This fiscal year we will invest a record $475 million in infrastructure, including the stimulus funding from Canada. The Building Canada program has worked well in the NWT. We have been able to identify needed community and transportation projects, receive approvals, and get work under way. Our increased capital spending will be responsible for about 1,000 person-years of employment over this year and next.
Our government has long argued, however, against per capita allocation of infrastructure funding because this formula is not appropriate for the north. The RInC program is a good example. The three territories were allocated less than $600,000 using the per capita formula. Infrastructure programs need to include a base amount per jurisdiction.
Our government remains highly dependent on federal transfers. The NWT's vast size, small and dispersed population, significant social and human needs, and challenging climate mean that it costs much more to deliver services and build infrastructure than we can generate from tax revenues.
We rely on adequate transfers under territorial formula financing to fill this gap. This program was placed on a sound footing in 2007 and provides the territories with a stable source of funding. Reducing TFF would jeopardize the delivery of vital public programs in the north. It is critical that it be maintained.
Furthermore, emerging aboriginal self-governments in the NWT will face similar challenges. Canada must acknowledge its responsibility to adequately fund these new governments.
Valuable programs, like the territorial health access fund, that help us explore new ways to address the north's substantial health care needs should be renewed. Continued support for early childhood education and child care programs would also strengthen our ability to meet some critical social objectives.
Until devolution is concluded, the NWT lacks jurisdiction over our non-renewable resources. Resource development does not generate the revenues that would allow us to make investments that would generate long-term economic, social, and environmental returns and thereby increase our territory's self-reliance. We are also limited in what we can borrow to finance this investment and therefore need Canada to partner with us.
For example, the Taltson hydro expansion project would displace up to 100 million litres of imported diesel and eliminate approximately 280,000 tonnes of greenhouse gas emissions every year. It represents a tremendous opportunity to address climate change concerns while providing short- and long-term stimulus to the economy. Canada's investment in this project would signal a commitment to support legacy infrastructure that provides major long-term public and private sector benefits.
We are encouraged by renewed federal interest in the north, including the creation of the northern development agency and the federal northern strategy. Premier Roland has welcomed these initiatives, but he has also stressed the need for northern engagement in their implementation. Northern governments must play a role in decisions concerning our future.
The premier wants to advance work on key initiatives that will strengthen the north and Canada, including the Mackenzie gas project, aboriginal rights negotiations and implementation, transportation infrastructure, green energy, and devolution.
Finally, we are concerned about the NWT's declining population. The high cost of living is a real barrier to attracting and retaining residents. We need to nurture growth in the territory to strengthen our economy, increase economies of scale, lower the cost of living, and support Canada's goals for Canadian sovereignty.
The federal northern residents tax deduction is important. Last year's 10% increase was welcome, but it did not fully restore the deduction's real value. We had called for an increase of 24% and estimate that this would cost Canada an additional $14 million and our government $1 million.
To conclude, territorial formula financing transfers must not be reduced. Other funding arrangements that support important initiatives in health care, training, and early childhood education should be continued. Canada should make concluding devolution and aboriginal rights agreements a priority, and Canada needs to stay the course on its stimulus efforts on infrastructure, in particular transportation and green infrastructure.
Investments that help to lower the cost of living are of prime importance for the NWT. Infrastructure dollars should not be allocated on a per capita basis.
Thank you, Mr. Chair.