Confidence in the Economy Slumps
With three levels of government elections over the next two months NWT’s business community has spoken and the issues are clear. Economic growth is by far the number one priority. In a Business Issues and Priorities survey of Chamber of Commerce members throughout the NWT the top three priorities for the upcoming Legislative Assembly are:
- Economic Growth: 87.6%
- The Cost of Electricity: 71.4%
- Population Growth Strategy and Incentives: 62.8%
“Business people don’t just see what’s going on, they live with it every day,” said Kevin Diebold, President of the NWT Chamber of Commerce. “We feel the effects of limited economic growth and limited opportunities. We feel the effects of high operating costs. And we worry about negative migration rates and its effects on our labour force and federal transfers.”
From communities to Federal MPs, Diebold believes the time is right to seriously assess all candidates on economic matters. “Question candidates about the issues and determine how serious they are about addressing them. We don’t need these elections to become popularity contests.
“We’re at the crossroads. We have serious issues in the NWT and we need serious minded people to resolve them,” he said.
While the lead question in the 2015 Survey focused on the next Territorial Assembly, the overall findings should resonate with all levels of government.
Business people were asked about their confidence in the economy. Over the next 12 months 65.3% indicate the economy will decline while only 3% feel it will improve. Over the next 36 months 52.8% feel it will continue to decline and only 21% feel it will improve.
“These are telling results. Without business confidence and investment who will provide jobs? How will governments raise tax revenue to pay for new water treatment plants, health care, or municipal and territorial infrastructure?” asks Diebold.
On the same note, respondents to the survey indicated that hiring intentions for the next 12 months are flat; mirroring results from the 2014 survey.
Beyond growing the economy, the most pressing issue is outmigration. Both municipal and territorial governments have the ability to tackle this challenge on two fronts: lower the tax burden and put incentives in place to attract new residents. Regrettably neither level of government has lifted a finger.
The cost of living and operating in the North are driving people and businesses out of the NWT. From Jan 01, 2014 to April 01, 2015 more than 700 people left the Northwest Territories, a population decrease of 1.7% which will cost the GNWT over $20 million. Outmigration in the territories largest centres is tracking the same pattern.
The NWT is a resource-based economy. The diamond mining industry has been nothing short of transformational, particularly in terms of northern Aboriginal participation. But the regulatory regime and infrastructure deficit are impediments to new investments. As a result we have no new major mining projects in the pipeline.
“The regulatory system is within our control and it’s broken. We must have the political will to fix it,” said Diebold.
“It’s a good time for all of us to be asking political contenders at all levels what their vision is for the North and what they would do to make sure the prosperity that the NWT has enjoyed from diamonds continues well into the future.”
Respondents were also asked to rank cost issues affecting their success. Not surprisingly the number one issue was the cost of electricity. More surprisingly, the second and third place issues were competing with GNWT salaries for employees and GNWT red tape, respectively. Numbers four and five were municipal property taxes and GNWT corporate taxes.
The survey was conducted between August 10 and September 11, 2015.
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