So the territorial government has at last unveiled its plan for opening up the territory. Schools were told they could re-open (an idea now scuttled amid a sea of surprise among school boards and educators) and those of us who desperately need a haircut can rejoice.
But the plan also confirms what most of us have feared; that life will not be fully returning to normal until a vaccine for the coronavirus has been found – at least 12 to 18 months from now. With travel and social distancing restrictions still in place, this means many businesses, even if allowed to open, will continue to struggle as long as the pandemic continues.
Mines can shut down, retail and tourism jobs will evaporate but the public sector is sitting pretty, working from home with pay cheques promptly deposited every two weeks for however long the pandemic lasts. And when the calamity subsides and people are finally allowed to break out of their pandemic cocoons, the public sector will return to work largely unscathed, so the theory goes.
Many, many people in the private sector have lost their jobs in just a couple of months but other than having to learn Zoom chat at home with fussy internet, if you’re a government employee, life could be worse.
So it seems at least for now. But what does the long-term future hold knowing our pandemic summer may become a pandemic winter?
Let’s start with some numbers. The territorial government’s proposed budget this year is just under $2.2 billion, of which $1.4 billion comes in the form of a per capita grant from Ottawa. This means the federal government pays the GNWT a sum of money for every man, woman and child who lives here.
Take the $1.4 billion the GNWT receives from Ottawa, divide by the NWT’s population during the last federal census in 2016 (41,786) and you get $33,500 for every resident of the territory.
The census count is a big deal. Just ask former premier Joe Handley who, as finance minister, nearly had a coronary when Statistics Canada missed about 4,000 people in its 2001 census. Those missing people represented a potential loss of tens of millions of dollars toward GNWT salaries and programs.
Now let’s look at some other numbers. The NWT Bureau of Statistics reports that there were 19,800 employees in the Northwest Territories last year — 10,300 in the private sector, 9,500 working in the public service.
Now, I’ve heard some scary figures – none of them verified – so I’ll be conservative in my next equation but I’ll point out the NWT Bureau of Statistics reported last Friday a loss of 400 jobs in April from the previous year. So let’s just pretend by next year’s census (by law, they must be held every five years) the territory has lost 1,000 private sector jobs. What does that mean for the GNWT and its 5,000 employees and the lesser order of governments, such as the City of Yellowknife, which gets a third of its budget from GNWT transfers?
Presumably, most, if not all, of those 1,000 workers who lost their jobs will flee the North where heating and energy costs are the most expensive in the country. And let’s not forget, many of the 1,000 workers will have spouses and children so for the sake of argument, let’s make that figure 2,000.
That means the GNWT will be kissing $67 million goodbye on the per capita funding alone. But let’s not forget the other budget items: Income tax, payroll tax, mining royalties, gasoline tax and so on. All of these are going to take a hit as the streams of pennies being siphoned away swell into a flood of lost cash.
How receptive will the federal government be to the territory’s financial problems now that it’s (necessarily) mortgaging our children’s future to carry the country over through a single season of pandemic?
The fact of the matter is the GNWT, entirely reliant on Ottawa to pay its massive workforce, faced with uncertainty in the territory’s mining sector and with tourism and other businesses on the ropes, will be getting squeezed hard in the not too distant future.
It will need to put out every lifeboat it can to weather this storm, to help private sector employees and all the government staff who will ultimately share the pain.