Good afternoon, everyone.
Thank you for your invitation.
I am Caroline Wawzonek, Minister of Finance for the Northwest Territories, and Minister of Justice and Attorney General as well.
I'm aiming for five minutes, but I may be one or two over. I'll do my best.
COVID-19 has exposed the depth of economic and social vulnerabilities in the Northwest Territories, particularly in small communities, from health care access to reliance on airlines for our food security to the lack of Internet connectivity in homes. Our non-public sector economy is driven by the mineral resource industry, primarily diamonds. This is a luxury good commodity market that is susceptible to fluctuations outside of our control. Our population has many pre-existing health vulnerabilities, low rates of educational outcomes and a recent history of both individual and collective trauma stemming in part from residential schools. COVID-19 has brought the collective impacts of these realities and other challenges into sharp focus for us.
Even with all this adversity, I am proud of the way the Northwest Territories residents, businesses and communities have rallied to respect the health measures being put in place to minimize COVID-19 and keep it out of our remote communities.
My opening comments now will speak to both the challenges and the opportunities that COVID-19 has brought into focus and the responses we believe are needed to build our strong and sustainable north.
One of our strengths is our people. The Northwest Territories is made up of very strong and resilient people. We are at our best when we work together, as is being demonstrated by the active collaboration between public and indigenous governments.
Another strength is our mineral resources. Significant mineral resource potential across the NWT’s vast geography continues to exist. Notable examples are lithium and rare earth minerals, which could gain greater prominence if COVID-19 advances the conversation about increased use of green energy.
The Northwest Territories is a key entry point to the Arctic Ocean and the Northwest Passage. The geopolitical importance of the Arctic, as well as direct economic potential, is unaffected by COVID-19.
As for our cultural diversity, we celebrate and protect 11 official languages in the Northwest Territories. Each one is translated in our legislative assembly. Cultural knowledge, particularly interest in indigenous cultures and language, is an area of growing interest across the world.
Many of our strengths have not been diminished by COVID-19. Anecdotal evidence so far suggests that the aggressive measures announced by the federal government, combined with our own government’s support for Northwest Territories residents and businesses, will do much to stabilize the immediate economic situation. We are especially appreciative of the programs that have been targeted specifically for the north, such as the $8.7 million to support Northwest Territories airlines.
As for the challenges that have been brought into focus by COVID-19, the Northwest Territories has the largest infrastructure deficit in Canada. We have airports that allow limited aircraft, a small handful of emergency shelters in only a few regional centres, and high food insecurity. COVID-19 has highlighted, and in some cases exacerbated, these weaknesses.
I have a few other examples for you. One is education. Every school district right now is struggling to provide web-based schooling, very often without sufficient access to computer hardware in homes and with limited Internet connectivity across the territory.
As for our heat and energy sources, people staying home has resulted in higher energy use in an already very high-cost environment. Most communities rely on diesel fuel to heat their homes. It is often the community’s primary electricity generation source. Lest you think the recent fuel price drop is at all helpful in this regard, keep in mind that fuel is purchased far in advance and sent to communities on ice roads.
Overcrowded housing and housing insecurity, leading to transient housing, has put more people into contact with one another, and often they are those who are simultaneously suffering from pre-existing lower health conditions. This is a perfect environment for COVID-19 to spread.
A lack of transportation infrastructure results in communities depending on airlines for food and medical supply chains. Those airlines today are in trouble, with at least one having already closed its doors.
At present, we have very limited own-source revenues. Those revenues are now further depleted by our efforts to provide immediate relief to the financial pressures being created by the collective response to COVID-19. In addition, a reduction of revenues resulting from a loss in personal and corporate income taxes as well as in mineral royalties is expected to have a major impact. Although we appreciate the financial help from Canada to date, we certainly will need more.
We already have limited fiscal room, which impacts our ability to be a primary investor in major products and can create fiscal challenges to act as partners if the investment relationship is being predefined.
There are some opportunities. We were forced to hit a pause button, of course, on regular government business and the pursuit of our government's priorities in order to contain COVID-19, but as we are beginning to plan our restart we have an opportunity to think about what that restart will look like, with a vision of who we want to be in the future.
We are assessing which projects are shovel-ready but could be delayed due to fiscal constraints. We also have several projects that are what I would call “next-stage ready”. These are projects that have some stage of design, planning or permitting. They include, for example, telecommunications connectivity expansion and capacity development; the expansion of the hydroelectricity capacity at the Taltson hydro facility, with a view to moving the Northwest Territories towards cleaner energy in homes and industry, which could then perhaps be a leader in greener mining; the exploration of the Slave geological province, with potential to provide the first direct transportation corridor to Nunavut; the expansion of hydroelectricity transmission lines across the south of the territory; and the introduction and expansion of community-based solar and wind projects.
Here are a few recommendations. One, ensure sufficient borrowing flexibility and a broader diversity of infrastructure investment partnership options, including opportunities for indigenous governments as equity partners. This includes being able to stack funding, in some cases with 100% dollars.
Two, advance the broadband 2020 fund and the promise of broadband access into all homes and communities in the Northwest Territories.
Three, identify social and economic goals within the Arctic and northern policy framework that can be funded for action immediately, or funded for immediate next-stage planning; and commit to doing so in collaboration with the Arctic and northern communities that are eager to be on par with the rest of Canada.
We know countries that invest in the Arctic see real benefits, whether from the natural resources, the access to traditional knowledge, or new opportunities in communications and transportation. We believe this is true of Canada's north as well, and we look forward to being a continuing partner with Canada to achieve that goal.