When Yukon Premier Currie Dixon tabled his government’s first full budget on Thursday, he put it bluntly: the territory is spending more than it can afford, leaving it in a “dangerous financial position.”
The budget projects a nearly $82-million deficit, which Dixon called a new record for the territory. The territory is also approaching its borrowing limit from the federal government, the premier said.
“That means we no longer have the ability to take on any new debt to pay for spending,” Dixon said.
“That means we need to get back on track. We need to bring back into balance our spending and our revenues. And that’s what this budget does.”
The tabling of the budget marked the start of the spring sitting for the territory’s 21 MLAs.
In his budget address, Dixon referred to “unsustainable spending” by the former governing Liberals, including under the confidence-and-supply deal with the NDP, which he said came at the expense of health-care and energy infrastructure.
“It is much worse than was ever publicly communicated to Yukoners,” Dixon said. “Nine years of reluctance to make tough decisions and prioritize means that the Yukon faces significant deficits in infrastructure and programming.”
Dixon has described the budget process as constrained by the debt cap imposed by Ottawa, which now sits at $1.2 billion. The territory is requesting that cap be raised.
In total, the territorial government is putting forward a $2.46-billion budget for 2026-27, subject to legislative approval. That includes $2.07 billion in operations and maintenance spending, and $385 million in capital expenditures.
While many jurisdictions in Canada have been hit hard by U.S. tariffs, Yukon has fared better than other places, the government says.
The government’s economic outlook predicts modest growth with strong metal prices and higher placer gold production.
New contingency fund
The budget proposes a new $100-million contingency fund to cover unexpected spending such as wildfire costs.
Officials said this would be similar to what other jurisdictions already have in place, as the Yukon catches up.
The difference from a previous, $75-million contingency fund is that the territorial government won’t need to return to the legislative assembly prior to dipping into the new fund, if changes to the Financial Administration Act are approved. Government officials said that will help the territory move away from the historic use of special warrants and supplementary budgets.
Territorial government borrowing is anticipated to close in on the $1.2-billion limit imposed by Canada, if that full contingency fund is used. The rising debt is needed to pay for repairs and building of energy infrastructure, the government says.
The government’s net debt position is expected to further deteriorate from $696 million to $804 million over the year but could improve by 2028-29, according to budget documents.
No cuts to public sector jobs, premier says
Capital spending is down from the last territorial budget, as major projects such as the Nisutlin Bay Bridge replacement project and Whitehorse international airport runway construction start to wind down.
Growth in the departments of Health and Social Services, Education and Justice drove operations and maintenance spending up.
The biggest chunk of spending will go to health, with money earmarked for a long term care home in Watson Lake, and an expansion of Whitehorse’s Whistle Bend Place. There is also an increase in the budget for the Whitehorse General Hospital expansion project.
The departments of Energy, Mines and Resources and Highways and Public Works will see cuts to their budgets this year.
Dixon said he doesn’t see a need to cut public sector jobs but does intend to limit growth. He pointed to other Canadian jurisdictions that have seen provincial governments recently impose cuts to public sector jobs, including British Columbia and Nova Scotia.
“You’re seeing that across the country because there’s a number of other jurisdictions in difficult financial situations as well,” he said.
‘Lots of blame,’ says opposition leader
Official Opposition Leader Kate White expressed some skepticism about the government’s plans to restructure some departments.
She said she’s curious how combining the economic development and tourism departments will go forward without making personnel changes, but said she’ll wait and see what happens in the upcoming fiscal year and through the next three years of the government’s mandate.
She said at first glance, Dixon’s description of the territory’s financial state does not match the budget.
“It is a big budget,” she said. “We saw a lot of pessimism and doom and gloom and lots of blame.”
The NDP leader highlighted what she considers gains made under the confidence-and-supply agreement between her party and the previous government. She pointed to things that were kept in place or even built on, such as increased services at the walk-in clinic, more educational assistants, and wellness counsellors in schools.
White also said she wants more clarity on what Dixon means when he says he wants to review and puts limits on “red tape,” particularly in areas of health and social services, education and the environment.
White also questioned the inclusion of a $13-million energy rate relief program in the budget without having the details of that program finalized. She noted Energy Minister Ted Laking earlier told CBC News that the program won’t fully offset rising rates.
The Yukon Party pledged to roll back the rates during the November territorial election campaign.
