Fentie defends spending-heavy budget

Yukon Premier Dennis Fentie is dismissing opposition concerns that his latest budget, tabled on Thursday, comes with unsustainable spending that could saddle future generations with debt.

Fentie, who is also finance minister, introduced a budget with a record $1.08 billion in spending, along with a projected $2.9-million surplus. In fact, Fentie said the territory should have money in the bank for at least the next four years.

"The surpluses continue. They vary on an ongoing basis, but the surpluses indeed continue," Fentie said after his budget was tabled.

But opposition MLAs say the budget shows increased deficit spending, noting that the budget does not include borrowing by two Crown corporations Yukon Energy Corp. and the Yukon Hospital Corp. for major infrastructure projects this year.

Liberal Opposition Leader Arthur Mitchell said finance ministers must make tough choices to avoid such spending situations.

"It's simply a matter of actually having to choose priorities, and do the things that are most urgent and most important first," Mitchell said.

NDP leader Elizabeth Hanson said future governments could end up with less revenue: "That will limit the choices that we'll have in the future," she said.

Years of benefit: Fentie

But Fentie says it's only wise to spread out costs over time for facilities that will benefit future generations.

"Why should the taxpayer of today pay the full cost of that, when this type of infrastructure will be used through the fullness of their life long into the future?" Fentie said.

"So the opposition's argument about the future future Yukoners, as they put it, our children having to bear this debt is, again, false."

Fentie said prudent financial management will preserve government surpluses over the next several years, but opposition MLAs argue that if you factor in the big project spending, the surpluses would disappear and Fentie could be deep in deficit.

Also concerned with the budget is Whitehorse economist Keith Halliday, whosaid the budget's spending on new programs will translate into ongoing operations and maintenance costs in the future.

"The premier's projections say that we'll continue to have a cash surplus. I think outside observers would be quite right to be a bit skeptical about that," said Halliday, who has ties to the Yukon's Liberal party.

Halliday also warned that given the federal Conservatives are looking to tighten their belts, federal funding the Yukon's main source of revenue could be at risk of shrinking.

"In the last few years, we've benefitted from special funds about health-care investment, or this or that," he said. "We may see a lot less of that in the future."

Finance Department officials say the federal government's funding transfer agreement with the Yukon is secure for at least the next two years.