Councillor fears for Yukon’s financial health

Whitehorse could suffer from a decrease in federal funding, city councillor Doug Graham said this week.

Whitehorse could suffer from a decrease in federal funding, city councillor Doug Graham said this week.

“We won’t have a whole lot of infrastructure funding from the federal government anymore,” said Graham.

“I think there could be problems coming in the future.”

The problems arise from the federal government’s new $33-billion Building Canada Infrastructure Fund.

Building Canada will eventually replace the Municipal Rural and Canada Strategic Infrastructure Funds, said Graham.

These two funds have brought a lot of money into communities and are responsible for projects such as the waterfront development in Whitehorse.

When both of the funds were created, the Federation of Canadian Municipalities took a stand to ensure all provinces and territories received one per cent of the money off the top.

The remaining amount was divvied up based on population.

Now, with only 0.1 per cent of Canada’s population, the Yukon will receive only $700,000 instead of last year’s $7 million.

The Canadian government said that the northern strategy fund of $25 million would make up for this difference.

However, this is money given to the territory with no strings attached so there’s no guarantee it will be used to improve infrastructure, says Graham.

First Nations governments and Yukon communities would have to make detailed applications to access any of the money.

“In the Northwest Territories they’ve worked out a way to spread the money around,” said Graham.

This ensured that a certain portion went directly to municipalities to increase infrastructure.

Last year, Whitehorse received nothing from the $25-million northern strategy fund.

The Gas Tax Fund has been extended until 2014, but the city isn’t able to use this money for capital spending as it could under the previous funds, said Graham.

He said he hopes that in 2008, the government will change their criteria for accessing the funds.

“It’s premature to be speculating about this,” said Finance Minister Dennis Fentie noting that MRIF is being extended to 2009.

The gas tax fund has been significant and the Yukon received a percentage similar to the other infrastructure funds, he said.

“In the North we get a lot of extra funding besides MRIF and CSIF.”

The Dempster and Alaska highways have both been designated federal, which will free up a lot of territorial money for investment in infrastructure.

“The Northern Strategy Fund is a great way to demonstrate the amount of consultation our government is doing with the First Nations,” he said.

Trilateral consultations between the federal, territorial and First Nations governments, are held to decide uses for these funds.

“The territory has invested enormous amounts into Whitehorse,” added Fentie.

He cited the Canada Winter Games, “which was a resounding success,” and the ongoing construction of Hamilton Boulevard.

Fentie is not interested in looking into ways to offset the two funds, which may disappear in the future.

“We’ll just continue to invest the money as our government receives it,” he said.

“Thanks to successful negotiations with Canada’s new government we’ve ensured that the Yukon gets its fair share of government funding while at the same time increasing our own source revenues.”

A focus on promoting business in the Yukon has generated millions of dollars from mining and private investment and made the Yukon more self sufficient, said Fentie.

However, councillor Graham remains concerned about the future.

“MRIF has been extended to 2009 but that’s only a year and a half away,” he said.

“We have to plan these projects two, three years in advance so we have to know where the money is going to come from.

“We’ll make do with what we get,” he added. “But we used to get a lot more.”