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Overview

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Overview

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  1. Overview • Context: citizens’ priorities, recession, long term trends, government capacity • Recommendations • Revenues • Savings • Spending

  2. Context: Priorities What do Canadians care about? Education, health, environment, fairness, economy (when it’s down, not to exclusion of others) Northern concerns similar, plus cost of living, others per 16th Assembly Priorities There is a public demand for strong, effective public programs

  3. Context: Recession • Worst since Great Depression? • Green shoots of recovery, or second dip? • Will only know these things in hindsight • What we do know: • Workers and families feel the impact • Job losses continue after recession ends • Public spending is propping up economies

  4. Context: Recession & Policy • The non-ideological view • economists, bankers, international organizations, finance ministers • Recession is part of the business cycle • When down, stimulate. When up, cool it. • Countercyclical monetary and fiscal policy. • Monetary: Bank of Canada. • Only Territorial option is fiscal (spend/save).

  5. Context: Long Term • Details are not clear • Some big picture elements are clear: • Recession will end • Fossil fuels scarcer and costlier • Macquarie Bank (Globe Sept 16): peak oil

  6. Context: Fiscal Capacity Three elements: • Among strongest balance sheets in Canada • Well under borrowing cap • smart debt vs. dumb debt • New revenues capacity

  7. 2008 1999

  8. Budget Recommendations

  9. Revenues • Federal rules allow new taxes and tax rate increases with no clawback • Integrated package of reforms • Some up, some down (smart tax reform) • Social, economic, environmental improvements • Raised tobacco, liquor revenues – good start • Implement 2010-2011, phase in over 4 years • By year four, raise additional $54 million

  10. Savings • Two goals: year-to-year, and long term • Year-to-year: countercyclical spending • When economy hot, take money out (save it) • When economy cold, spend it • Economic Stabilization Fund (savings acc’t) • Long term: • When resource revenues decline • Territorial Trust Fund (RRSP)

  11. Spending – Short Term • Economists: no cuts: don’t even discuss • No P3s: • Expensive: profits, advertising, cost to borrow • Accountability: “offshoring” debt, commercial confidentiality • No Privatization • E.g. ATCO shopping for new assets in North • NWTPC: high annual net revenues: plum

  12. Spending – Short Term • Recession stimulus test – 3 criteria: • Implement immediately • Value: number of jobs per dollar spent • Prepare us for the long-term future of expensive energy • Illustrate use of these criteria • Traditional: roads and bridges • New: energy efficiency upgrades for buildings

  13. Spending – Short Term

  14. Criterion #2: ValueNumber of jobs per dollar

  15. Spending – Short Term • Energy efficiency upgrades in buildings • Insulation, weatherstripping, doors, windows, furnaces, etc. – can start immediately • Public buildings and public housing • Private residences: subsidy • NWT: $7-35 million – 80-385 person-years employment • owner cost savings, energy conservation, reduced emissions, green jobs, boost small business

  16. Spending – Long Term • Revenue capacity  citizens’ priorities • Helping the most vulnerable • Progressive tax and income support system • A.k.a. “automatic stabilizers” • Cultural and language preservation programs • Early childhood education: • extend public system: $18m • Quality public health care • Sustainable transportation - transit where practical