As the N.W.T. changes how it funds communities, small communities will be the most impacted

The government of the Northwest Territories is changing how it funds its communities and those with the smallest populations will feel it most.

The Department of Municipal and Community Affairs (MACA) is starting its transition into the new funding model on April 1, 2025 and easing into it over a three-year period. 

The change is based on a review from 2014 that found communities with the smallest populations have been receiving a higher percentage of funding compared to larger communities. 

MACA Minister Vince McKay said that's led to some communities being underfunded to the point of not being able to operate. 

"This has to be fixed in order for new funds to come in instead of throwing money at a problem," he said Tuesday in the Legislative Assembly. 

In a written statement, the department said the updates would be a more equitable distribution of MACA's budget. It said the change will have the biggest impact on communities with fewer than 500 people.

Ray Ruben, mayor of Paulatuk — a community of about 300 on the Beaufort Sea — said it helps that the new model is being implemented over three years. 

"So it's not like if communities are going to face cuts, it'll be sudden," he said. 

Ruben said that gives them time to prepare for what they could be facing.

Ruben said the numbers of what funding his community is receiving aren't yet final, but he's telling some staff they might be looking at areas to cut in the coming months. 

'Not ideal obviously'

According to senior administrative officers who have met with MACA staff to learn about the new model, communities choose from a list of plans that allocate different amounts of money to their operations and maintenance budgets, waste water and sewer and community public infrastructure. 

Soham Srimani, SAO of Nahanni Butte — a community of under 100 in the Dehcho region — said his community is opting to lessen its funding for waste water and sewer. 

"It's actually a concern I would say, but then operation maintenance is more of a concern for me because the power bills, insurance and whatnot," he said. 

Srimani said it's unlikely to impact residents' regular water and sewer services, but it limits their ability to deal with emergencies.

This summer, water in Nahanni Butte had elevated levels of manganese, restricting children under five and pregnant people from drinking tap water. Srimani said it was an expensive fix.

He said if something like that were to come up again, the community will have to lean on MACA for help, but he's confident they will.  

"I'm sure they will not want the communities to face this kind of problem and they will eventually come up with a model that will help everyone. I trust them," Srimani said. 

In Wrigley, a community of about 120, SAO Derek Sutherland is worried about the new model coming with stricter reporting requirements. He said the small community works to keep clean books but that with limited staff some things can fall through the cracks. 

On top of implementing more equitable funding, MACA said in a statement that updates on reporting, penalties and eligible spending are to increase transparency. 

McKay said the goal is not to fund N.W.T. communities fully but to make sure they have the money to run key services.

"It's not ideal obviously. It would be nice to have 100 per cent funding for all the communities, but the reality is we have to find a way that distributes this funding equitably and fairly across the territories to all 33 communities," he said.  

McKay said there will "soon" be a meeting explaining the funding formula but MACA staff did not answer when that meeting will be and whether it will be public prior to deadline.