Yukon Premier Sandy Silver in legislative assembly after the announcement of the 2018-19 budget in Whitehorse on Mar. 1. (Crystal Schick/Yukon News)

UPDATED: Yukon Liberals project deficits will continue until 2020-21

Opposition parties criticize the government for a lack of detail and ‘vison’

The Yukon government is projecting a $4.5 million deficit in the 2018-19 fiscal year.

Premier Sandy Silver tabled his budget March 1 in the Yukon legislative assembly.

“A budget should do more than account for the spending of public dollars,” Silver said. “It should be a plan for getting the most from public dollars.”

A deficit of $6.9 million is projected for 2019-20. By 2020-21 the territory will be back in the black, but only barely, with a surplus of $1.8 million.

That means a surplus is forecast just in time for the next election.

The territory is expecting to be in net debt by the end of the fiscal year.

As of April 1 the Yukon will have approximately $30 million in net financial assets, according to the budget. But the end of the year the territory will be nearly $21 million in net debt.

The $1.472-billion budget this year includes $3.5 million for 10 new continuing care beds at the Thomson Centre, $39.7 million in housing work, $9.8 million for the Dawson airport and $6.8 million for a new track and field facility at F.H. Collins.

The 2018 deficit is substantially less than what the government thought it was going to be. This time last year the government was projecting a deficit of approximately $49 million.

Silver said the improved numbers are “in part, because of the fiscal approach our government is taking to fully account for costs.”

In order to meet the projections in this year’s budget, the government is not giving itself much wiggle room. Money spent on operation and maintenance is only slated to get slight increases year-over-year.

There’s $280 million budgeted for capital spending. That’s about 10 per cent less than last year.

That’s a concern for Yukon Party interim leader Stacey Hassard.

“Where are those jobs going to disappear from? Who’s going to make up for that? Certainly they’re not all going to be able to go in the new cannabis department of government.”

Hassard criticized the government for going into deficit at all.

“The fact that it’s a $4.5 million deficit, I think it would be pretty easy to get rid of that deficit altogether and balance this budget.”

Silver said the deficit is a result of increasing costs in operations and maintenance.

Spending on operations and maintenance for the Department of Health and Social Services is up $37.1 million, an increase of 10 per cent, he said.

The government has promised a “comprehensive review” of the health department, something that came out of recommendations from the territory’s financial advisory panel.

“Almost one in three dollars are spent on these services,” Silver said.

As they hinted earlier this year, the Liberals are planning to spend cash on 10 new continuing care beds in the Thomson Centre. That money is made up of $1.2 million in capital costs and $2.3 million in operating costs.

The budget provides some idea of how much it will cost to run the new Whistle Bend continuing-care facility that is supposed to open in the fall. The government is earmarking $24 million for the opening of the facility, and that’s only to cover a partial year.

NDP Leader Liz Hanson said Silver’s budget has “no sense of vision.”

“We heard the financial advisory panel say last fall that there was a number of options for the government to choose and one was sort of a ‘do-nothing’ option,” she said.

“I think this is pretty close to the do-nothing option.”

The government again failed to meet its promise to allocate $30 million annually for an energy retrofit program, she said.

“There’s no mention of climate change for goodness sake.”

Silver said the government has $11 million allocated right now for energy retrofits “and there is more money to come” but the NDP say most of that money is for existing recurring programs, not new cash.

This year’s budget is the first since the final report of the territory’s financial advisory panel was released.

Hanson was critical of the government for not considering the panel’s recommendations to generate revenue.

“As though a harmonized sales tax is the same as seeking to recoup some of our costs for example (with) a payroll tax on fly-in/fly-out workers.”

Hanson said the budget is very heavy on process.

“I think it’s ‘head down, we’re just going to keep doing what we keep doing’ and talk about it lots.”

Silver said his government is still considering suggestions around raising revenue.

“It doesn’t mean we’re not doing these other things as well. So more information will come as we start moving down the road.”

This year $9.8 million is being spent on the Dawson airport. Of that, $2.4 million is to plan for paving the runway and the rest is for a new maintenance facility.

There is $11.8 million worth of Yukon government money in the budget this year for a redundant fibre optic line. Another $11.1 million will be coming from third parties and Canada, according to the budget.

But the government is being tightlipped on what specifically that money is being spent on. No one has said which route the line will take or how much it will cost overall. Two paths are being considered, one that would remain within Canada and the other connecting to Alaska. Ottawa will have to sign off on either option.

At a press conference following the budget speech Silver promised more information “in the coming weeks.”

This is the first budget that has a line item for money that will come from legalized cannabis. The Yukon is expecting $387,000 in cannabis tax. That’s substantially less than what’s being spent. The government has earmarked $3 million for distribution at its new cannabis store.

About another $1.2 million is going towards preparing the regulations, and preparing for enforcement and education campaigns. $525,000 of that is recoverable from the federal government.

“The premier himself has said that the government needs to get out of the business of being in business,” Hassard said. “So here was the perfect opportunity for that to actually happen and instead this Liberal government has chosen to do the exact opposite.”

Hassard said cannabis sales “was an opportunity for private sector to come in on day one.”

“The government could set the rules up, we would have known how things were going to go and instead they chose to do the opposite, to grow government.”

The Liberals have said from early on that the plan is to eventually have cannabis regulations in place to allow for a private sector.

The territorial budget doesn’t include the impact of carbon pricing. This week’s federal budget did clarify that the carbon tax will take effect Jan. 1, 2019.

Yukon officials are still waiting for more information from Ottawa but they estimate the tax will bring in $5 million in the first year, based on a carbon price of $10 per tonne. It’s expected to hit $25 million per year five years later when the carbon levy rises to $50 per tonne.

The finance department predicts the impact on the Yukon economy will be negligible, since the revenue will be returned to residents in the form of a rebate. But officials acknowledge the impact will differ across different sectors of the economy, with sectors that use more energy, such as transportation, facing a higher potential burden.

The government has released no details about how exactly it plans to rebate the money to Yukoners and Yukon businesses. Silver said conversations are “ongoing.”

“We need to involve our private sector. We need to talk to the businesses and chambers about how the business money gets allocated,” Silver said at a press conference after the budget was released.

“We can have those conversations because they know what we’ve said. We’ve said we’re giving 100 per cent of that money back.”

But Hassard is frustrated with the lack of details.

“How are Yukoners supposed to plan their future if they don’t know the details of what’s coming down the pipe?”

A federal study analyzing the impact of carbon pricing on household costs is expected in April.

With files from Chris Windeyer

Contact Ashley Joannou at ashleyj@yukon-news.com

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