Assessing the Financial Impact

Throughout its deliberations and discussions, the Panel has learned that principles, directions, and best intentions are one thing. What people really want to know is the bottom line. What are the financial implications of the Panel’s new approach?

To assess the fiscal impact, the Panel compared the results of its new approach with the TFF entitlements for the territories under the New Framework, as well as forecasts of funding the territories would have received under the previous TFF formula. Further information on the financial impact of the Panel’s recommendations is contained in Annex 4.

Comparison with the New Framework

• The Panel’s approach provides more funding to the territories than the legislated New Framework. This is due to the combined effect of adjustments to the GEBs for the territories, the reintroduction of the PAGE escalator, and the simplified measure of revenue capacity.

• Under the legislated New Framework, total TFF funding is $2.14 billion in 2007–08. In 2007–08, the Panel’s approach means an additional
  $60 million for the territories.

• Over the five years from 2005–06 to 2009–10, the total amount of funding for TFF would increase by $285 million compared with the New Framework. To put that in perspective, the Panel’s approach would increase funding for TFF by about 20 percent over five years while the New Framework would increase funding by about 15 percent.

Table 2 – Comparison of the Panel’s Approach with the New Framework, 2005–06 to 2009–10

Comparison with TFF entitlements announced for 2006–07

• Each of the territories would receive additional funding under the Panel’s approach compared with the 2006–07 TFF entitlements announced in November 2005. Compared with announced TFF entitlements for 2006–07, under the Panel’s approach, the Northwest Territories would receive an additional $53 million, Nunavut an additional $53 million, and Yukon an additional $26 million in 2007–08.

• On a per capita basis, the Panel’s approach translates into $18,148 per capita in the Northwest Territories, $29,165 per capita in Nunavut, and $17,114 per capita in Yukon in 2007–08.

Table 3 – Comparison of the Panel’s Approach for 2007–08 with Announced Entitlements for 2006–07, by Territory

Note: Totals may not add since figures have been rounded up to the nearest million. TFF entitlements for 2006–07 were announced by the federal Minister of Finance in November 2005, based on October 2005 data.

Comparison with the previous TFF formula

• For 2007–08, each of the territories would receive more under the Panel’s approach than under the previous TFF formula. The Northwest Territories would receive $40 million more, Nunavut would receive $48 million more, and Yukon would receive $35 million more.

Table 4 – Comparison of the Panel’s Approach with TFF Formula for 2007–08

• Over five years from 2005–06 to 2009–10, the territories would receive $549 million more under the Panel’s approach than under the previous formula.

Table 5 – Comparison of the Panel’s Approach with TFF Formula, 2005–06 to 2009–10

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