New funding model will be a boost to larger NWT communities, but some say it’s still inadequate

Larger communities in the NWT will soon see increases in area funding to maintain infrastructure and provide services such as water and waste management, but these increases still do not meet the needs of communities.

Starting in April 2025, the Government of the Northwest Territories is introducing a new way of funding communities: more money will be allocated to municipalities with more assets. This means centers such as Inuvik, Hay River, Fort Smith, Fort Simpson and Yellowknife will see growth.

Yellowknife Mayor Rebecca Alty says while every little bit helps, these changes won’t come close to the extra $9 million the capital needs to properly fund.

“It’s not about fancy things, it’s about being able to just provide basic and necessary services,” Alty said.

“We need every little dollar to be able to get these basic projects done—to be able to get water into your home, to be able to get wastewater out of your home, to be able to pick up trash and be able to be able to dispose of it properly.”

Sarah Brown, CEO of the NWT Communities Association, said even with the changes, communities will still face a 35 per cent funding gap. She wasn’t sure of the exact amount, but said there was a funding gap of about $5 million in the 19th Legislature. Now it’s something more, she said.

However, Brown says the change would be an improvement over the current community funding system, which she calls “black box accounting.”

“Nobody really knew where these numbers came from,” she said.

Finding ways to spend money is “not a problem”

The new formula, which allocates money based on need, estimates that some communities will receive less than 60 percent of what they need to function, while others will receive more than 100 percent.

The Department of Municipal and Community Affairs (MACA) has not yet decided how funding will be allocated between capital and operational needs, so leaders cannot yet say which projects will be funded by the increase.

But Darrell White, Fort Simpson’s general manager, says whatever the territory offers will help.

“We can always find ways to spend our money and invest in the community, it’s definitely not a problem,” he said.

White says they are especially interested in continuing FireSmarting’s work at Fort Simpson.

10 years from the date of recommendation

New model based on committee recommendations in 2014. Gary Brennan, MACA’s deputy minister, says there are several reasons why it took a decade to implement the changes.

One of them, he said, is the concern of small communities.

Brennan said that when the recommendations were initially presented, the government decided to “red circle” those smaller communities so they would continue to provide the same funding while they tried to find new money.

Then, in the 19th Assembly, the legislative priority was to reduce the municipal funding gap.

That meeting also dealt with the COVID-19 pandemic and natural disasters, but the territory formed another task force in 2022 to review its municipal funding model. The group was poised to finalize the policy by 2023, but was delayed by territorial elections that year.

Now, Brennan said, the group is “ready to hit the ground running,” concluding a meeting with community leaders to discuss changes.

The group never found additional funding for the small communities “circled in red.”

The new funding formula will come into effect in April and will be implemented over a three-year transition period. Brennan says this is intended to help communities that will receive less.

“We understand that, we understand that communities in general are underfunded, we understand that the cost of living is rising,” Brennan said.

“But at the end of the day, we’re committed to making things fairer across the board, and we’re doing that with these policies.”