New budget could boost territory

By John Thompson News Reporter The Conservative government will spend its way through the dark times ahead with a budget that will run up a $64-billion deficit over two years. And the Liberals will support them, with one caveat: they want the government t

The Conservative government will spend its way through the dark times ahead with a budget that will run up a $64-billion deficit over two years.

And the Liberals will support them, with one caveat: they want the government to provide quarterly updates to ensure they make good on their commitments.
“This government has a sad history of not implementing what it promises,” said Yukon’s Liberal MP, Larry Bagnell.

Only about 20 per cent of promised infrastructure funds have been delivered to date, he said.

The budget, released on Tuesday, offers massive government spending in many areas that may benefit the Yukon, such as municipal infrastructure, Arctic research, aboriginal health and education, social housing and help for the mining and tourism sectors.

Bagnell happily claims credit for some perks to northerners found in the budget, which had been absent in the fall economic update.
“It’s like night and day,” he said.

Bagnell would have preferred to see spending focus on helping the most vulnerable, through bigger changes to employment insurance, offering more help to seniors and boosting money to child care.

Still, “this is very much more like a Liberal budget” than anything the Conservatives produced in the past, he said.

Some spending of interest to Yukoners includes:
• Almost $12 billion in new infrastructure money to be spent over the next two years;
• $2 billion in low-cost loans to municipalities to invest in sewers, water lines and other work;
• $50 million on building social housing in Yukon;
• $50 million to be spent over five years to establish a regional economic development agency for the North;
• $85 million to upgrade existing Arctic research facilities, and $2 million to study the feasibility of building a High Arctic research station.

Dan Lang, Yukon’s newly-appointed senator, sees plenty of small perks in the budget to help Yukoners get through the economic downturn.

He points to a new tax credit for home renovations, worth up to $1,350 on 2009 taxes, and another tax credit that offers $750 on closing costs for buying a new home.

The budget also lifts Canada’s two lowest tax brackets, with the upper limit of the 15 per cent bracket rising to $40,726, and the 22 per cent bracket limit rising to $81,452.

Lang is no fan of deficits. But, with the present global economic downturn, “I don’t think we have any choice,” he said.
“Government has no choice but to act.”

Yukoners are lucky, Lang said. Other parts of the country are being hammered by an imploding automobile sector; the territory, buoyed by government funds, is largely insulated from the recession.

And the forthcoming flood of infrastructure investment should produce new jobs in the Yukon.
“I wouldn’t be the least bit surprised if it’s going to draw people to the Yukon,” said Lang.

The next big challenge rests with the territorial government. Much of the new infrastructure money is set to flow in the next two years, and the federal government is asking for projects that are “shovel ready.”

Premier Dennis Fentie has indicated one big project he hopes to see funded is an upgrade to the Mayo hydro-electric dam, which is expected to cost about $100 million.

But the budget speech’s only specific reference to priority Yukon projects is to “water treatment.”

It’s unclear what work, in which communities, this refers to. Public works officials were unable to offer comment before Yukon News deadline.

Either way, the territory will need to move swiftly to cash in, and not, as Lang said, “get stuck in a morass of bureaucracy.”
“That’s going to be a real challenge. But I think they’re going to work fairly well.”

Contact John Thompson at

johnt@yukon-news.com.