Thank you so much for the opportunity to present to all of you regarding the government's response to the COVID-19 pandemic.
I'm Lynn Napier, the mayor of Fort Smith and president of the Northwest Territories Association of Communities. We proudly represent 33 communities of the Northwest Territories that vary in size from 52 to 21,000. Our members are both indigenous communities and traditional municipalities, but all are northern and remote to varying degrees.
We have been fortunate enough to present to this committee in the past and have highlighted our four main federal priorities as infrastructure, climate change, housing and broadband. The current pandemic has really highlighted the importance of these priorities and how much they impact on the resilience of northern communities.
We've been very pleased to hear of the programs announced to date to mitigate the economic impacts on both individuals and businesses. Further, the more recently announced health and social services support for northern communities was very welcome. When our territorial government, residents and businesses are doing better economically, so are our communities. Despite the support program's name, little or none is actually going to local communities. We are, however, going to need additional programs to support local governments.
As you know, local governments are relied upon to keep essential services running. We have 33 communities that deliver water, sewer and landfill services; provide fire protection, planning and building services, as well as transit and recreation services; and protect our most vulnerable populations.
We're working tirelessly to ensure that we maintain these services, but we are also very concerned. COVID-19 has led to not only many additional tasks for communities; it is also compromising their ability to raise revenues, whether they are taxes or user fees. This poses a particular challenge because of the small size of our communities, especially when they cannot legally carry a deficit budget. We're going to require particular support from the territorial and federal governments.
I would like to highlight some unique areas of challenge in the north that make us particularly vulnerable to the virus and to its impacts.
We have a large cohort of vulnerable populations, including those on income support, the homeless and those with mental health and addiction challenges. Well in excess of 50% of our housing is overcrowded and insufficient.
The last month of self-isolation has really highlighted the inadequate broadband connectivity in our communities and proven a barrier to education, working from home, telehealth and participation in the digital economy on an unprecedented level.
The lack of proximity to health care services as a result of our communities' remoteness is making community leadership very anxious. This is further compounded by the fact that we are over 50% indigenous, which is a particular risk factor with respect to COVID-19.
We are already seeing significant impacts on our two main industries: the mining and oil and gas industry, and tourism. Last but not least, our existing supply chain issues are only likely to become worse.
Our communities will require support for the immediate response to COVID-19. The funding should be provided as quickly as possible. Community governments are already experiencing significant impacts. To get this funding out the door as quickly as possible, it should be allocated-based and distributed on a base-plus basis.
Direct municipal financial impacts will also need to be addressed as well, whether they relate to reduction in tax revenues, user fees or additional costs. We hear estimates that one in four businesses may not survive the pandemic. That would mean a significant loss of tax revenue. Closed recreational facilities cannot generate user fees. Without these financial supports, communities will be forced to reduce services even more, or those that can will have to raise taxes at a time of economic instability. With northerners already subject to a very high cost of living even before COVID-19, this will have a significant impact and may put some residents into insolvency or force them to leave.
With respect to planning for the critical economic stimulus recovery phase, I am pleased to let you know that local governments are agile enough to be important partners. We commissioned a report by The Conference Board of Canada's centre for the north, which clearly demonstrated that community governments' expenditures have the largest impact on the NWT economy. For example, local government expenditures generate 13 jobs per $1 million expended, while territorial and federal projects generate seven and six jobs per $1 million respectively. Local governments are absolutely the best bang for the buck.
The expansion of the gas tax fund with a continued allocation-based distribution across Canada on a base-plus basis is the best way to get stimulus dollars to our communities.
Also, although housing funding is not funded to communities, it is incumbent upon us to highlight the critical importance of increasing the funding for housing in the Northwest Territories. This not only will serve as an economic stimulus, but will also address many of the social determinants of health in the communities and, in the long run, make communities more resilient.
We would be very pleased to provide advice on how best to design the various funding programs for the greatest effectiveness in the north. We're best positioned to help various programs navigate the challenges in the north. We ask that you not wait to contact us until there's little or no uptake on a program. We do it so much that we even have a brochure on it.
We wish to thank you for the invitation to present to you this afternoon. We hope that you continue to consult with us, with the Government of the Northwest Territories, our sister organizations across Canada and the Federation of Canadian Municipalities.
Thank you.