Where is the N.W.T.'s $21.5M COVID-19 relief package coming from?

When she announced the Northwest Territories' 2020 budget in February, Finance Minister Caroline Wawzonek told reporters that while the territory's economy was stable, it wasn't growing and the economic situation was not what she had hoped it would be. 

Then the COVID-19 pandemic hit.

As businesses in the N.W.T. were forced to close their doors and companies began laying off hundreds of workers, Wawzonek and her cabinet counterparts announced a $21.5-million relief package to help the territory weather the storm.

But just where is this $21.5-million relief package coming from?

CBC North spoke with the finance minister to find out.

'Money that we're not taking in'

Wawzonek says it's important that people don't think the territory is handing out millions of dollars in stimulus. In fact, the vast majority of line items in the first two relief "phases" the government announced don't immediately put cash in northerners' pockets. 

"The $21 million is a value of $21 million. It's not money being handed out in every respect. In a lot of aspects of that, it's money that we're not taking in," Wawzonek says.

For example, loan payments for students and some small businesses have been deferred, airlines are no longer charged airport landing fees, and gifts and unearned income deductions for people on income assistance have been put on hold. 

Housing

The portion of the relief package that deals with housing — $5 million toward the creation of temporary housing in which homeless people can self-isolate — is a different story. That, Wawzonek says, comes from money the department already had. 

"[The Northwest Territories Housing Corporation], they had internal funding set aside for the year that they were going to be doing some projects on, well they're just moving that along faster."

Income Assistance

In the last "phase" of the government's relief package, the territory announced that it was giving people on income support an additional $500 each. That money was meant to be spent on supplies to help people self-isolate, but the government said it wouldn't be monitoring where or how that money was spent.

This portion of the relief package does require that the income assistance program get a funding boost of $1.6 million over three months, says Wawzonek.

That money was already part of the program's budget for the year, but it was made available earlier to pay for the $500 cash payouts.

Lost Revenue

While the territory isn't exactly handing out millions of dollars, the savings it's offering in its relief package will still have an impact on its overall budget.

About 80 per cent of the territory's budget comes from transfer payments from the federal government. The remaining 20 per cent comes from own-source revenue — money the territory brings in from resource revenue, taxes and fees the territory charges.

That 20 per cent is what is going to be hit the hardest during the COVID-19 pandemic.

Not only is the territory going to be bringing in millions less in fees, its resource revenue from the mines and the tax it brings in from employment are going to see a drastic drop.

The territory's largest mine, Ekati Diamond Mine, has shuttered. Others across the N.W.T. have slowed operations and are now spending much more money on chartering flights to bring workers in from the rest of Canada after they sent their northern workers home, with pay. Higher costs and falling diamond prices mean less revenue to be shared with the territorial and Indigenous governments.

Then there's the N.W.T. payroll tax. Through their employers, workers in the territory pay a two per cent income tax to the N.W.T. government. Mass layoffs and businesses closing their doors means the territory will be bringing in less tax.

"We are looking quite seriously at that and taking into account different possible outcomes of what may happen over the next few months to look at what the actual projections are going to be. There's no doubt that they're going to change," Wawzonek says. 

"Our expenditures are going to be no doubt different."

What that will mean for the budgets going forward is still unknown.

Next steps

Wawzonek says more phases to the government's relief packages are coming. She says she's been hearing from a lot of different groups about what they need. 

One thing people in the N.W.T. could be seeing next is a subsidy for essential workers to help pay for child care now that schools have closed.

Wawzonek didn't say when the next phase will be rolling out.

"The reason we keep calling them phases or waves is because it's just going to keep rolling out as soon as we can put the pen to the paper and get it to a state where it's ready to go."