Budget devotes $484 M to capital works

Revised - The Yukon government tabled its budget for 2024-25 Thursday afternoon, and at $2.08 billion, it’s the largest to date and the first one to crest the $2-billion mark.

It’s a seven-per-cent increase over the $1.938-billion budget tabled last year, with most growth coming from new money for health care, education and salary increases.

Finance Minister Sandy Silver told MLAs the government’s plans will support a sustainable economic future that benefits all Yukoners, making their day-to-day lives more affordable, more equitable, safer, and healthier.

“Now is not the time to take our foot off the gas,” said Silver.

“The economic data is proving … that we are on the right track.”

To help with that, the Liberal government will table an Interim Supply Bill of $458.3 million to allow departments to function while the budget is debated in the coming weeks.

Core funding for municipalities

Federal transfers have grown by just over $100 million, thanks to population growth, to $1.43 billion.

The Yukon government is sending $2.3 million of that along to communities as a top-up to the Comprehensive Municipal Grant.

Taxation revenue is expected to rise as well, due to increased employment and rising incomes.

A budget surplus of $119 million is forecast, alongside a $50-million contingency fund that will be used for emergency response (fire and/or flood) and emergent pressures in the health care system.

“We’re improving life for all Yukoners,” Silver said, noting there are capital investments in every community.

“Yukon Liberals believe that governments can be a force for good, and that government actions can improve the lives of all Yukoners, not just a select few.”

Big-ticket items in this year’s operations and maintenance budget include:

• $30 million more for insured health services, for a total of $160 million;

• $15.3 million more for the Yukon Hospital Corp., for a total of $110 million;

• $41.9 million for the employees’ collective agreement wage increase; and

• $9.4 million to establish the new health authority called for in the Putting People First plan.

More than $4 million is going toward the Substance Use Health Emergency, including $1.3 million for the new managed alcohol program and $510,000 in additional funding for court-monitored drug treatment programs.

“Ongoing efforts of this government have the Yukon well-positioned for continued success,” Silver said.

He cited positive reports from the CD Howe Institute and Canadian Federation of Independent Businesses, along with the “AA Stable” credit xrating received last July.

“With retail sales up 7.8 per cent in 2023, the Yukon had the strongest growth in the country, and was well above the national rate of 2.1 per cent,” he said.

Five projects account for a major share of the $484-million capital budget:

• $11.5 million to complete the 800-km-long Dempster Fibre Internet project;

• $13 million for construction of Kêts’ádan´ Kù School in Burwash Landing;

• Up to $17 million for more reconstruction of the North Klondike Highway;

• Up to $50 million for ongoing construction of the new Nisutlin Bay bridge; and

• Up to $75 million for critical runway and site improvements at the Erik Nielsen Whitehorse International Airport.

Economy is returning to normal

The government released its March edition of the Fiscal and Economic Outlook on Thursday as well.

It said the Yukon’s economy is returning to normal after the “extraordinary circumstances” of the COVID-19 pandemic, with inflation falling, tourism numbers rebounding and higher consumer spending.

The Yukon’s Gross Domestic Product is expected to stay growing, with a forecast of 3.6 per cent in 2023 and 1.6 per cent in 2024.

Meanwhile, inflation is expected to trend downward throughout 2024, with annual inflation over the next five years expected to be at or near two per cent.

“We are the envy of almost every single jurisdiction in Canada when it comes to our fiscal acuity,” Silver told reporters.

He noted provinces and other territories are talking about austerity measures, which is not the case here.

“The Liberal government is doing our level-best to keep up with housing, keep up with infrastructure investments, keep up with climate change, things that the Yukon Party government was not all that interested in doing.”

The forecast surplus of $119 million is driven largely by investments in tangible capital assets (TCAs) like government-owned buildings and pension funds. TCAs also contribute to the increase in net debt, to $488.8 million.

Silver noted that of that total, about $230 million is borrowed money – which was borrowed by Yukon Party governments back in the day.

“They left us with that debt …. I think the Yukon Party is talking about net debt to confuse, but net debt as we talk about it is a ratio, it’s a debt anchor, it’s a comparison.

“If the government today had to stop and we had to pay off all our liabilities, pension liabilities, etc., and we had to use existing assets, that’s the number that you see as net debt.”

As for being the one in charge when the territorial budget topped $2 billion for the first time, Silver said it was a reflection of the investments the Yukon needs.

“We know full well we have to be very conscientious of the future …. I want to make sure the next Finance minister has a stable foundation to work from; that’s my biggest goal. It’s not about the numbers.”

While $21.5 million is budgeted for work at the abandoned Minto Mine site, almost all of that expense will be covered by the security held by the government, according to Department of Finance staff.

With respect to external electric power supply options, the government plans to spend $850,000 to explore the feasibility of tying into the B.C. power grid.

There are no funds identified for 2024-25 for the Atlin hydro tie-in because there are several requirements to be finalized before construction funds are needed.

The 2024-25 budget will be scrutinized by MLAs in the weeks to come, starting with Opposition responses on Monday and continuing with department-by-department reviews.

Final approval will be given at the end of the spring session, which won’t happen until mid-April at the earliest.