Echoing calls from Fort Smith earlier last month, Yellowknifers made a hardline push for at least half of resource revenues garnered through devolution to be put into the Heritage Fund for safekeeping for future generations at last week’s public meeting.
Yellowknife was the latest stop on this year’s round of budget consultations put on by the NWT department of Finance following meetings throughout October in Behchoko, Fort Simpson, Hay River and Fort Smith.
The tour has provided a venue for Finance Minister Michael Miltenberger to present his plan of what to do with the territory’s share of resource revenues after responsibility for lands, water and resources is finally transferred to the NWT on Apr. 1, 2014.
The territory expects to make a maximum of $65 million after splitting royalties in half with the federal government, 25 per cent of which will go to Aboriginal governments, leaving a maximum of around $52 million to the GNWT.
As that cap hinges on the territory’s capital expenditures, which are currently “well below” the $65-million mark, the five-year average for resource revenues is closer to $42 million.
Though Miltenberger’s plan is to put 5 per cent of that $42 million into the NWT’s new Heritage Fund, saving the rest for infrastructure and debt repayment, residents attending the meeting in Yellowknife requested anywhere between half and 100 per cent of the revenues from non-renewables to be put aside for future generations who won’t be able to benefit from those resources.
Yellowknife’s Frame Lake MLA Wendy Bisaro was one of them. Though she agreed with Miltenberger’s intent to ensure no resource revenues are allocated for programs and services – for which the government already invests $1.4 billion annually – she said a 5 per cent investment for the future was disappointing.
“In my view, we should be placing a minimum of 25 per cent of our anticipated resource revenues into the Heritage Fund, and it should be so stated in legislation, not in regulations which are easily changed by government without any discussion with, or input from, the public,” she said in legislature last week.
Yellowknife resident Julian Morse, who attended the consultation last Monday with around 20 others, said there was a mixture of recommendations, wavering between 50 and 100 per cent of revenues.
Though he would like to see all of the revenues go into the Heritage Fund, he said he understands the value of investing in infrastructure for the future, as well, and could settle for a compromise of at least a 50-50 split between the two areas.
“But just throwing everything into capital budgets for the year is a terrible idea,” he said. “If you’re going to put in a small amount, you don’t really have a Heritage Fund. You might as well put a lot away or none at all.”
He said the 5 per cent figure is “100 per cent arbitrary” and wants to see the department listen to the views of residents in making this decision, despite what Miltenberger said may be a tough political sell in legislature.
“If people in the political arena don’t understand the benefits of a Heritage Fund, it’s Miltenberger’s job to explain that to them,” Morse said. “When you’ve got residents who know what they’re talking about coming to meetings and saying this is what we want, then they need to respond to that. This is the will of the people.”
Morse added that any allocation for debt repayment is a “red herring,” as the majority of the territory’s debt is self-liquidating.
“The ‘infrastructure deficit’ is a bit of an imaginary figure. There’s no physical deficit; there’s no money that needs to be repaid. They’re talking about what they’d like to build and the money they need to build it,” Morse said. “That’s not a good reason not to establish a Heritage Fund.”
Residents in Fort Smith also called for at least 25 per cent to be put towards the fund, with the preference of 100 per cent, as is done in Norway, whose Heritage Fund currently boasts around $730 billion.
Five per cent would see $2.1 million going into the Heritage Fund each year, which – when totalled with compound interest – would see around $65 million saved up in the 20 years the fund is legislated to go untouched. The fund’s current balance is just over $500,000.
The department has two communities left on its budget consultation tour. Miltenberger and his Finance staff will be in Inuvik on Nov. 12 and Norman Wells on Nov. 13.