The Yukon’s 2006-07 budget is a record budget.
It is a stay-the-course budget.
It is a boring budget.
There are few, if any goodies that you might expect in the last year of a government’s mandate.
“We tabled our goodies budget in our second budget,” said Premier Dennis Fentie.
“Our first budget, 03-04 was to get the fiscal house in order.
“The next budget, 04-05, was to use that budget to begin the change of direction for the territory by heavy investment in capital.
“We continued that in 05-06 and we’re continuing it in 06-07.”
Worth $793,360,000, it’s the largest budget in the territory’s history.
Of that, more than $191 million will be spent on capital expenditures.
But there are few new projects.
Last year’s capital budget topped $206 million, with record investments in highways, schools and health-care facilities.
This year, those projects continue.
“Technically, there’s not a lot new,” said Mark Tupman, the Finance department’s budgets director.
“It’s about completing things that got started.”
There’s $1.7 million for an Alaska-Canada rail link feasibility study, $2.1 million to improve the Dempster Highway and $4.4 million for a sewage treatment plant in Carmacks.
As usual, Highways and Public Works got the biggest chunk of the capital budget — $72.4 million, slightly more than last year.
The territory pulled money out of the 2005-06 budget that had been earmarked for three major capital projects.
More than $2 million for a multilevel care facility in Watson Lake was taken out of last year’s budget and counted as a new capital expenditure. It should be completed this year, to the tune of $5 million.
Another $1.5 million was re-appropriated from last year and added into the Education department’s budget this year, to complete the replacement of the Tantalus School in Carmacks by October 2006.
Total cost is pegged at $11.6 million.
And $900,000 came out of from the Environment department’s 2005-06 capital budget and was added into Highways and Public Works, to finish building an interpretive centre in Tombstone Territorial Park.
Those funds were pulled and re-allocated so they wouldn’t lapse, said Tupman.
Altogether, almost $27 million was lapsed from the 2005-06 budget, and must be re-voted.
The most expensive new capital project is a $2 million substance-abuse action plan.
“One of the initiatives rising out of the substance-abuse action plan that will be implemented by the fund is the safer communities and neighbourhoods legislation,” Fentie said during his two-hour-20-minute budget address.
And $1 million has been allocated to begin design of new prison infrastructure.
“It may include a separate remand centre,” Fentie said in a subsequent news conference.
“The big issue right now is nailing down a design for a correction facility.”
The territory also earmarked $250,000 to extend Whitehorse’s Hamilton Boulevard, and $1.2 million for the Whitehorse airport parking lot.
There’s plenty of money for the 2007 Canada Winter Games, including $360,000 to start construction of a speed-skating oval at FH Collins Secondary School, $700,000 for a ski chalet at Mount Sima and $8.7 million to complete the athlete’s village.
Operations and maintenance again took the lion’s share of the budget, worth more than $600 million.
The most expensive government department to run is still Health and Social Services, at more than $175 million.
The territory is running a surplus of almost $9 million, which is significantly lower than the $38 million surplus forecast for last year, because the $27 million in lapsed funds are not counted as surplus, said Tupman.
“By adopting full-accrual accounting we have identified all of our obligations, so with things like employee pensions we’ve made appropriate adjustments to reflect future obligations for our pension plans,” he said.
“Before full-accrual accounting we weren’t accounting for those, fully.
“The next thing we’ll be addressing is our obligation to reflect environmental liabilities properly.”
In February, federal auditor general Sheila Fraser praised Finance for improving its accounting principles by moving to a full-accrual model.
Forecasts from the Finance department are optimistic, predicting steadily increasing revenues.
The Yukon is approaching balanced budgets, where revenues match expenditures, said Fentie.
But most of the territory’s money still comes from Ottawa.
Almost $506 million comes as a grant from the federal government.
Health and social transfers account for $39.3 million, including $6.3 million from the new Territorial Health Access Fund.
More than $13.3 million flows from the Northern Strategy trust.
Altogether, transfers from Canada make up 71 per cent of the Yukon’s revenue.
“The money that the Yukon receives from Canada is fundamental to what this country is all about, and that is the fair sharing of the country’s wealth,” said Fentie.
“We are part of a federation. Every nickel we get, we deserve.”
Some capital investments are recoverable from Ottawa, such as $8 million from the Canadian Strategic Infrastructure Fund and $3 million from the Municipal Rural Infrastructure Fund.
And almost $35 million for improvements to the Alaska Highway are recoverable from the US government, through the Shakwak agreement.
Domestically, the territory will bring in about $86 million this year.
Personal income tax accounts for $41 million, and corporate taxes count for a little over $3 million.
Tax on fuel oil brings about $6.4 million.
Tobacco and liquor taxes account for more than $9 million, while liquor sales bring in almost $6 million.
And slightly more than $6 million comes from the territory’s only major source of natural resource revenue: the Kotaneelee gas field in southeast Yukon.
For 2006-07, the field is expected to yield $500,000 less than it did 2005-06.
“In 2005, there were two wells drilled in the Yukon; one in the north Yukon at Eagle Plains and one in southeast Yukon in the Kotaneelee gas field,” said Fentie.
“Mining is destined to become the Yukon’s number-one industry over the course of the next decade.”
There’s no hike planned for personal or corporate income taxes. They’ll remain at their current base rates.
But there’s also no money specifically for a school in Whitehorse’s Copperbelt riding, which the government suggested was in the works last fall.
And there’s no money to bail out Dawson City, which has been without a town council since the government took over its finances in April 2004.
“The problems past governments got into is, they started guessing at how much money they have to invest in any particular area,” said Fentie.
“As Finance minister, I don’t guess. I want to know what the numbers are, what the costs are.”
The budget includes $2.5 million for Dawson’s sewage treatment.
And the government announced a new Dawson trustee, Leo Chasse, who will replace Ray Hayes.
Fentie hinted that a financial package and elections in Dawson would be announced soon.
“As far as a financial plan goes, you’re going to find here, shortly, that we’re tabling a legal mechanism so that we can hold an election here in the next few weeks.”