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Feds partially restore lost funding
Finance minister says territory will receive $24 million of $34 million lost in December

John McFadden
Northern News Services
Wednesday, February 17, 2016

The territorial government is breathing a bit of a collective sigh of relief today after word that the federal government is partially restoring millions of dollars in formula funding to the territory that had been taken away late last year.

The GNWT had lost about $34 million from the annual federal grant in December after Ottawa changed the way it calculates the territory's share of the funding. It is a complicated formula that is based on, among other factors, population and gross domestic product information from Statistics Canada.

Federal Finance Minister Bill Morneau yesterday announced $24.1 million has been restored for the 2016-17 fiscal year. Morneau also stated he will introduce legislative amendments to improve the stability and predictability of the payments and address the impact of the Statistics Canada data revision.

NWT Finance Minister Robert C. McLeod said he appreciates that Ottawa restored at least some of the lost funding.

"But it doesn't change the fact that we have to watch our expenditures to make sure they aren't exceeding our revenues," said McLeod.

"We still have to go forward with some of the exercises we are going through. My understanding is that they've done it for this year and have put mechanisms in place in their legislation so that things like this don't happen again."

The funding formula had been in effect since the early 1980s and had worked well until the Statistics Canada changes in December, according to McLeod.

The finance minister also announced there had been funding restorations to Nunavut and the Yukon as well. His announcement follows a meeting late last week between Premier Bob McLeod and Prime Minister Justin Trudeau where McLeod explained the reasons the territory needed at least part of that funding restored.

The premier's brother, Liberal MP Michael McLeod, said the decision to partially restore the funding follows some serious lobbying by him and the premier.

"My role was to flag the issue to the minister's office, his staff and also the parliamentary secretary," said McLeod.

"I also talked to a number of people over the last while about the seriousness of such a cut to the NWT."

With the NWT's overall budget set at more than $1.5 billion, the MP said some had suggested the $34 million was just a drop in the bucket but he disagrees.

"This was a huge cut and we needed to find a way around it," McLeod said. "We also had to find a way to ensure it didn't happen again. We need to have an agreement in place that allows the GNWT to provide a vision of what they see in terms of growing the economy and providing programs and services. All these things we had to make a case for."

McLeod said he thinks the premier did a good job in lobbying for the restoration and his meeting with Trudeau last week didn't hurt.

"It was very important for the premier to give a good snapshot of the situation in the NWT, where our economy is, where our social issues are, the need for investment in the North. I think the premier did a very good job of drawing it to his attention."

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