Pending a vote by MLAs, Finance Minister Sandy Silver’s $2.08-billion budget pitch for the 2024-25 fiscal year will likely eventually pass in the Yukon Legislative Assembly with the support of the Yukon NDP.
Given Yukon NDP Leader Kate White’s commitment under the confidence and supply agreement with the governing Yukon Liberal Party, she told the News by phone at the end of the day on March 7 that the minority Yukon government can bank on her three-member caucus voting in favour of the budget.
With the three territorial party leaders expressing interest and concern around health care leading into the 2024 spring sitting of the legislature, the Yukon government’s budget introduced on March 7 includes an estimated $603.8 million for spending in the Health and Social Services department, up by $75.8 million from last year.
The Yukon Hospital Corporation is slated to get $5 million exclusively for the mental wellness unit and $110.4 million for operations and maintenance this fiscal year, which is more than the previous year’s estimates but down from the 2023-24 forecast of $124.7 million.
Opposition parties had committed to closely watching the budget for the hospital corporation, which is notable following an independent report that found the hospital corporation misspent government money specifically intended for Whitehorse General Hospital’s mental wellness unit, also known as a secure medical unit or a short-stay psychiatric unit, on daily operations like paying staff.
Official Opposition Yukon Party Leader Currie Dixon told reporters in the lobby of the legislature following Silver’s budget address that the amount budgeted for the hospital corporation represents a drop.
Moments later, Yukon NDP Leader Kate White told reporters that in her view, overall health-care spending is down. She wonders what that could mean for supplementary budgets down the line.
Silver told reporters in the Yukon government cabinet office that the opposition is comparing “oranges to apples.”
In total, the government is planning to spend about $1.6 billion on operations and maintenance and $484 million on capital in 2024-25.
The total budget is up from last year’s $1.94 billion budget, with an increase of around 9.7 per cent in operations and maintenance spending to keep the wheels turning daily.
According to information provided by Finance officials during a technical briefing on the morning of March 7, that increase in spending on operations and maintenance covers insured health services and a boost to hospitals, hiring additional educational staff, Minto mine remediation and collective agreement increases for the Yukon Employees’ Union.
A relatively new $50-million contingency fund, which was spent in full last year, was initially put in place for COVID-19 pandemic and then environmental emergency responses like fires and floods. Now, it can also potentially cover additional pressures in the health-care system.
Additionally, an interim supply bill authorizes spending totalling $458.3 million — roughly 22 per cent of the total budget — to ensure government departments can operate while the latest budget is debated. At the government’s technical briefing on the budget, it was stated that the interim funding is expected to tide over government operations until April or May, at which point the budget should be approved.
The territory’s annual surplus for 2024-25 is $119 million, a notable 147 per cent increase from last year’s surplus.
The surplus is attributed to investment in tangible capital assets, or TCAs, used to produce or deliver goods and services. However, spending on these TCAs is also credited with contributing to the increase in the territory’s net debt, which is expected to climb by more than 30 per cent from last year to nearly $489 million.
According to budget-related documents provided to the media, the territory’s net financial debt is anticipated to climb again next year and in 2026-27 before dropping to an estimated $455 million in 2027-28 and roughly $375 million the following year.
One of Dixon’s main criticisms is the net debt under the Yukon Liberal Party government.
“What we’ve seen from this government over the past eight years has been a negative trajectory,” Dixon said.
Silver argued the former Yukon Party government left the Liberals in a tricky spot.
“The trend of cash going down started in 2013, when the Yukon Party was in power, and if we didn’t have a pandemic, that trend would have been stabilized long ago,” Silver said.
Meanwhile, revenues are projected at $2.05 billion, which is up 9.4 per cent. Officials said a new form of revenue is expected to roll in, assuming the Yukon government enters vaping product taxation and can pass a bill on the matter.
Eighty-five per cent of the money the Yukon government is expected to take in will come from Ottawa.
Expenses are predicted to be $1.93 billion, a bump from 2023-24.
Part of the Yukon government’s pitch involves spending more on some of the other biggest spenders: Highways and Public Works, Education and Community Services.
At $77.7 million, the Yukon Housing Corporation is getting a slightly higher allocation than last year.
Economic Development, Tourism and Culture, the Yukon Development Corporation and the Public Service Commission are each seeing a slight dip in funding compared to last year.
The new budget is expected to increase the Yukon RCMP’s funding by $4.8 million. Some of this additional money will fund eight and a half new positions with the police force.
The government’s capital budget for 2024-25 is a $200,000 increase from last year. This minor increase — from $483.8 million to $484 million — sees the government’s planned capital spending stay within the “normal” range, according to the technical briefing, after a historic level of capital spending — $547 million — in the 2022-23 budget.
The capital budget is used for constructing, purchasing or maintaining infrastructure and other assets. In the latest budget, the primary drivers of capital spending are the housing, health care, education and transportation sectors.
In relation to housing, more than $27 million will be allocated to construct affordable homes, community housing and other land development projects. Among other projects, $5.5 million will go towards loans to assist developers and individuals in buying, building, and repairing homes, and $2 million will be used to renovate and improve units owned by the Yukon Housing Corporation.
Other major capital projects funded in the budget are the construction of the mental wellness unit, $146.8 million worth of strategic transportation projects, a $12-million green infrastructure program and the Dempster Fibre Project, for which $11.5 million is earmarked. The $13 million in construction costs for the Kêts’ádań Kų school in Burwash Landing are also included in the capital budget.
The budget notably lacks money for a Skagway marine services platform and Atlin hydropower expansion. A budget document provided to the media notes that the former will be deferred to 2025-26, and the latter isn’t part of the 2024-25 budget or the five-year capital plan.
Dixon noted the budget also omits a second iteration of the landlord assistance program, which he suggests is an indicator of the program’s “abject failure.”
The biggest impact on the Yukon government’s economic outlook was the abrupt closure of the Minto mine, which was offset by two other mines doing better than expected and the tourism sector almost fully bouncing back to pre-pandemic levels, according to officials.
When asked by reporters, Silver couldn’t decide on the most difficult decision he had to make when coming up with the budget. Instead, he indicated that trying to be a moderate government with a fair, balanced budget under many conflicting and increasing pressures was the “hardest thing.”
Although White said the budget proposal has the Yukon NDP’s support, it doesn’t mean she likes everything in it or that it will go through without debate.
“It’s not a free pass,” she said.
Contact Dana Hatherly at dana.hatherly@yukon-news.com
Contact Matthew Bossons at matthew.bossons@yukon-news.com