The issue: New Northern funding
We say: Now we need details
If you were waiting for a “good on the government for this funding announcement but we’re thirsty for details” sort of page 8 today, your ship has come in.
Within hours of Yellowknifer’s editorial board agreeing that the GNWT or probably the federal government needed to step in and provide a new support package that addresses the fact that Northern businesses and residents live with challenges unique to the territories, including a higher cost of living than other parts of the country, Prime Minister Justin Trudeau announced $130 million in new dollars for Nunavut, the NWT and the Yukon.
Most of the money is for health care, some for airline companies, which up here serve as essential services to remote communities, a bunch ($25 million) will go to Nutrition North, and some is set aside for small businesses.
Trudeau said clarity on what support businesses can expect would come later but he mentioned commercial rent relief, which some Yellowknife business owners said last week would be more important in many cases than the 75 per cent wage subsidy. In a nutshell, it’s a fixed cost versus variable cost scenario because businesses like restaurants and salons that have shut down or slowed operations have laid off staff and aren’t paying them, but still have to pay their rent.
Another stitch with the wage subsidy is that it only covers three-quarters of the first $58,700 of an individual’s salary, which is fine to cover the vast majority of restaurant workers in the south, as one example, but is less helpful here since employers generally have to pay higher salaries because of the higher cost of living.
Unsurprising statistics keep rolling in backing up the argument that businesses need help now if we expect to restart the economy with any success. At the end of last week, Statistics Canada numbers from March showed just the first inklings of the impact of Covid-19 mitigation measures on the economy nationwide and in the NWT. And at the start of this week, the International Monetary Fund (IMF) projected that the world’s economy can expect to contract by three per cent this year, a drastic slowdown deeper than anything seen during the last recession in 2008-09.
For all of the abovementioned reasons and a host of others already familiar to Northerners, businesses here are more exposed to fluctuations in the economy. Small business owners, especially ones that have been completely shut down, will see little or no reason to remain in the North if they’re faced with a growing pile of bills and zero revenue. The danger here is that the new normal after the pandemic threat recedes, with an economy very nearly completely propped up by well-paying government jobs, will contain very little other than government jobs – with large chunks of the private sector completely eradicated and unable to survive in the North.
And what will attract people to live here if many of the amenities Yellowknifers enjoyed before pandemic – the restaurants, spas and entertainment venues – are unable to replicate in a new normal that doesn’t allow anything else in to fill the vacuum?
It will need to offer more than good fishing and the aurora borealis if we want to attract much-needed newcomers to Yellowknife.
The details we’re hungry for from Trudeau’s announcement may well have to come from the GNWT, since most or all of the funding will flow through the territorial government. Premier Caroline Cochrane, who took over the territory’s Covid-19 response when she absorbed the role of minister of municipal and community affairs, must ensure this latest package, an improvement on the cookie-cutter approach taken thus far by Ottawa, gets to where it’s needed most, and lobby for more if it proves to not be enough to meet the unique needs of Northern entrepreneurs and the people they employ.