N.W.T. finance minister on federal budget

People in the Northwest Territories are waking up to a new fiscal reality today. The federal budget, which was released yesterday, pledges to fully fund the Mackenzie Valley Highway, earmarking the $3.1 billion for it over the next five years. More on this and what else is in the budget for the territory, I'm joined in studio by NWT's Finance Minister, Caroline Wozniak. Good morning, Minister. Good morning. So what was your reaction and your colleagues' reaction when you learned that the Mackenzie Valley Highway will be fully funded? Obviously very excited. I mean, this is, yeah, what words do you want? The generational, the transformational, right? So yeah, we're very excited about it. I guess my own reaction is, you know, twofold, which is happy to see the money and now we have to go get the thing built. So happy to see it. I was also really excited to see the funding that went in to establish a project entity that will deliver the project. So because having the money to build it is fine. We need to get it built. We need to get it built as quickly as possible. So the federal government's been pretty clear about some timelines on all of the major projects. We want to demonstrate that we can deliver, that we can deliver quickly, because I'm now wanting to see the full funding for the other two major projects that we have. So there will be an office charged with building this road? Yeah, I mean, we're calling it a project management entity right now. We need to figure out probably a little bit of a better name for it. But there is, you know, I don't have the number right in front of me here. It's just shy of $200 million to get this set up. We've got a team of about 20 right now building all three of the major projects, plus all of our energy projects, managing all of that policy work. That's not a way to build big things quickly and efficiently. So there was some significant money there to make sure that these projects get built. So even though we saw full funding for McKenzie Valley Highway, very exciting. It's the furthest along. We've also seen the mechanics in place now to get the other two done as well. And will that be a territorial project management entity or a federal one? So this has been the conversation that we're having with Major Projects Office about how to set it up. I'm expecting over the course of the rest of this calendar year, we should settle in on that. We'll, we'll. We've been pretty clear that we want to ensure that there has to be territorial oversight and management and voices of the Indigenous communities and governments that we're working with. So I'm confident that that will all be reflected in there. This funding is expected to roll out between now and 2031, which is the expected construction period. How ready are we to get this highway built? We are ready. There's a lot happening. It's like there's so much happening. I heard what Chief Grandjean is saying about wanting to see work happening and training happening. So there's already been some money that's rolled out for communities to be able to apply to directly manage their own training programs. But beyond that, we've got community readiness groups set up across the Mackenzie Valley Highway communities. They're kind of going live here in the next month or so, but we've been doing a lot of work to make sure that we have them ready to go out. We've also been establishing a governance agreement between ourselves and the nations that are along the highway. And so we've landed on a settlement of what that can look like, how we will manage our relationships so that we're all clear about what's happening when, how the project is moving forward. Also, I'm expecting to see kind of go public here in the next month. And then beyond that, is to go in and actually make sure that the community readiness and that delivery mechanism are overseeing the training, overseeing what needs to happen, making sure people understand what kind of workforce commitments there are. We've also got procurement policies that we're sort of standing up for each of these projects that can be specific to them to make sure that, again, maximizing as much as we can the northern opportunities, northern employment, opportunities for northern businesses. While recognizing that there's likely to be the need for some outside capacity supports. But we want to still always maximize our own domestic labor force first. We've seen the Dene Nation call for an Indigenous procurement policy. Will that happen for this project? So, I mean, well, in a way, I want to say yes, insofar as there's going to be a specific set of parameters that we're going to use for this project and for the others as well. Our own government, in terms of our public procurement at the government of the Northwest Territories, what we've done is, you know, going out and looking at how we deliver, we ran the numbers, and about almost three-quarters of all of our procurements stay in the Northwest Territories right now. But beyond that, I don't have the... The ability to say how many of those are with Indigenous businesses or not because we weren't tracking it because there was no definition. We have the definition now, we are tracking it now, and once we know how that breaks down, we can figure out what we need to do to tweak it. So we talked kind of about the training piece there. How will you ensure that Northerners are getting work on this project? One of the ways we've talked with major projects offices is rather than doing the target, you know, like the mines have had for years, you have to have such and such percent target and have seen them struggle. We see our own government struggle to make sure that we're... Providing the kind of balanced positioning for Indigenous people in the North, even though we have a high population, we don't see that. So we are talking about using an output-based type target. So, for example, is the employment rate going up in a community or unemployment rate going down, for instance? There's other measures we can look at that if what we actually want to deliver meaningfully is a situation where there's change happening in those communities, then maybe that's what we should be measuring as we go along. What do you think this, or what do you expect this project to do for the economy here in the Northwest Territories, at least over the short term? Well, yeah, so the short term is construction period, and if we are accomplishing what all of us are saying, and myself and leaders throughout the regions and communities, is that there's going to be a significant increase in employment, but also a significant increase in training and capacity. So folks hopefully getting on and being apprentices, five years as a construction period is not that long if someone's starting from just fresh out of school, but they can be on their way, and others can go ahead and get their apprenticeships done. Some of it's going to be in how we design the contracts and the delivery, that if we can build in apprenticeship plans over time, some folks will be able to shift straight into other projects. So the other thing is to make sure that over the construction period, which is the short term, that we can't, at the end of the construction period, start to talk about who's building a hotel or who's building a cafe. That has to be happening now, too, so that people are ready when the road goes live. What are any other major wins in this budget for the territory? Well, so this is where the... I'm going to say not really, at least not yet. So some of the granular details that we want to look at would be, so for instance, there's money in there for NIHB, but it's over time, it seems like a big number, it's over time we want to look at is it actually an enhancement of any sort or are they kind of keeping it just stable as where it is right now, which at this point in time still doesn't fully fund the costs of what it takes to move folks who need medical travel in Northwest Territories, Indigenous people. We were looking at Jordan's principle, of course, did not see an enhancement there and have not seen some of the policy changes that we know are needed. And so our government's been filling in that gap over time, looking at the First Nations policing agreement. So there's money announced in there, but again, not sure, again, if it's an enhancement necessarily. So seeing the money in the descriptions of what's in there sounds good. But the next call might well be to Treasury Board, I was saying, because that's where the actual implementation of the budget takes place, and we can start to get into whether or not there's something in there that's changing or enhanced, or if it's just sort of keeping lights on effectively. I was really looking for what affordability measures there would be. There was some signaling that there would be something in there, because the country is facing some pretty significant rising costs. And one area that I've asked our department to look into is just how many Northerners are getting the the grocery tax benefit. I looked at the income thresholds. So again, is this a good win for the North? And they made some announcements there. We'll depend on what our numbers show, but it might be that we need to see a little bit of maneuvering on some of those policies. Yeah. When it comes to Jordan's principle that you mentioned and that your government has been filling in that hole, are you going to continue to fill that gap? Well, I mean, we have to effectively, and I, you know, reticence sometimes when you fill the gap, then it just, it becomes expected that the GNWT fills the gap, and we're taking that from the territorial form of financing that we have to provide all the services that are available. So, you know, it is an essential thing. So we looked right now at where the school funding was before the Jordan's principle changes happened and to now, and at this point, the gap's been fully made up. But the money is coming differently, it's going coming from a different source and going through the school funding formula which doesn't necessarily target the same cohort of students who might have been receiving it through Jordan's principle so while dollar for dollar it's there it doesn't necessarily do the same things and it wouldn't necessarily be administered the same way it also doesn't eliminate the fact that the the federal government had an obligation under Jordan's principle, in our view, to be supporting some of the most vulnerable students. And now it is often at the hands of individual families to be applying, which are often families that are quite stretched. So this is still going to be a point of contention, I suspect, between us and the federal government. But, you know, I always want to come back to the first half of the conversation was how excited and happy we all are that we're getting something. have supported that has been asked for for successive generations pretty much. So you know the relationship's good and it's strong but there's still things that we need to come back and say look there's there's some realities at the front lines even while there's exciting big things happening there's some realities at the front lines that we can't can't lose sight of. What about the Taltson Hydro Expansion Project? Where does that stand after yesterday's budget? Look, positive. All three major projects are positive because of the significant money that's going into a delivery mechanism. So they named specifically Mackenzie Valley Highway and Taltson as being part of that delivery entity. But from our perspective, all three projects will benefit from that. I know Great Slave Lake got some specific mention in the budget, and I didn't have a chance to look at what those numbers were. But if that. Projects advancing, then the Arctic Economic Security Corridor is an essential part of that. So I think all three projects are getting moving forward. Obviously, Mackenzie Valley Highway, clearly moving forward, but the others are going to benefit from the other announcements as well. Was there any money for either of those projects announced yesterday, other than this entity? Not announced yesterday, but we have funding right now, right? So we are funded right now to do the work that's underway. So looking on both of those projects, looking to be into an environmental assessment next year on both. With the Taltson looking by the spring, and with the Arctic Economic Security Corridor looking by summer, and we have the funding to get us there. The work's been happening over this summer season to do hydrology on the one, for instance, and, you know, mapping on another, and so I'm not concerned. Those ones are good to keep going forward at the pace that they are, particularly with some project management support. Once we've done that, once we're into an environmental assessment, we've scoped them a little further and have some design work done, then... I would look forward to next year's federal budget to announce one of the next ones. You're also the infrastructure minister and there was money, it is money in this budget for electricity projects and expansion. Anything in there that piqued your interest that could be coming to the NWT? Yeah, the granular, this is where it's not always very granular at the budget end of what's in there. I did have a look at that. One of the benefits is that intra-territory transmission lines now will be subject to the Clean Energy Tax Credit, which does help because we do have intra-territory lines. We've got a line that we want to get out to Watti to provide hydropower there. We want a line that we want to get to Fort Providence and Kikaiza. So every bit that can help incentivize those moving forward and give a little bit of support, that's good news. I guess I would be remiss. There is a lot in there for homes and housing. So I know Minister Robertson has already reached out to Minister Kutana here. So that was good news. That suggests to me that they're going to talk the granular nature of how that money rolls out. So again, there is a lot of positive things, but maybe a few things that I want to look at more closely. You announced a deficit fiscal update the other week. How much of that do you think? Can be fixed with this budget? This budget provides the long-term structural changes that the territory needs, right? So when we've looked at the reasons for high costs, whether it's to residents and businesses, the lack of supply chain capacity, so roads, and the lack of energy infrastructure, and therefore high energy costs are two big ones. These provide those, definitely provides us on a path to start to make those structural changes. That's huge. But in the short term, this is where I was looking at, you know, what is the grocery benefit going to do for the North, for Northern residents? And if the income thresholds aren't lining up to the realities of the North, then that's a conversation that we need to have with the federal government. Jordan's principle similarly, if it's not helping some of our most vulnerable students in education capacity, well, then we're filling that gap. So that's not going to change our bottom line when we're having to top up things that were being funded from elsewhere. So yeah, short term, I don't think it does. Long term, it puts us on a better path to fix the structural changes that have been around for a long time. And that, again, don't for a second want to say that that's not very important and that we're not excited about it. All right, Minister Wozniak, thank you so much for coming in this morning. Good luck with your capital budget happening in the Leg today. I'm sure we'll be talking about that in the coming days. Look forward to it. That's Minister Caroline Wozniak. She's here with me in the Yellowknife studio. She's the NWT Finance Minister.