Debt limit calculations change needed: MLA
Finance minister to raise issue at December meeting with federal counterpart
Shane Magee
Northern News Services
Tuesday, November 15, 2016
SOMBA K'E/YELLOWKNIFE
A Yellowknife MLA says the territorial government should resume lobbying Finance Canada to reclassify some of the territory's debt so it doesn't count against its $1.3-billion borrowing limit.
Kieron Testart: Kam Lake MLA calls on government to lobby feds for change to borrowing limit calculation. - NNSL file photo
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The change would mean self-liquidating debt wouldn't count against a federally imposed borrowing limit, freeing the government to spend more on infrastructure such as highways.
Self-liquidating debt is paid off with user fees, such as power bills and highway or bridge tolls.
The idea, championed by former finance minister Michael Miltenberger, was nixed by the former Conservative government. The current territorial government so far has decided not to continue Miltenberger's initiative. Kam Lake MLA Kieron Testart thinks that should change.
"We need to have a realistic borrowing ceiling that takes into account things like self-financing debt so we can start to grow the economy and start to invest more money, especially at a time when borrowing (rates are) at an all-time low," he said in an interview earlier this month.
It's not clear why the federal government rejected the idea. Finance Canada did not return a request for comment.
Last year, the former Conservative government increased the territorial debt limit by $500 million to $1.3 billion.
Current territorial Finance Minister Robert C. McLeod said in an interview last week he believed the reason for the rejection was the federal government thought the $500-million increase would be sufficient. The territory had asked for an increase to $1.8 billion.
Premier Bob McLeod said at an April 2015 news conference altering how debt is calculated would be a boon for the territory.
"We are reviewing our books because we think there is a significant amount that is self-liquidating," he said. "We've been making this argument for some time. We know for sure the (Northwest Territories Power Corporation's) $200-million debt falls under that category and we know there are others as well."
Robert C. McLeod said last week the issue hasn't come up with his federal counterpart, Bill Morneau. He said he'll likely raise the issue at a meeting in December.
"We're not sure if the Liberal government would be interested in that," said the minister. "The fact that (the federal government) raised our debt limit, it gives us a bit of room."
The territory was expected to approach $782 million of debt by the end of the current fiscal year. As well, the territory's fiscal responsibility policy means debt payments cannot exceed five per cent of revenues, further hemming in government borrowing.
Testart said the debt issue is important as the territory considers taking on large-scale infrastructure projects like new all-weather highways or dams and power transmission lines.
"These are significant projects and it encourages the government to look to the (public-private partnership) options which are not without controversy," he said.
Last year, Ontario's auditor general found P3 projects in that province had cost taxpayers $8 billion more than they likely would have cost had they had been publicly financed and run.
The territory has limited experience with P3 projects. Recent examples are the Deh Cho Bridge boondoggle, the troubled Mackenzie Valley Fibre Link and the new Stanton Territorial Hospital.
Three major roads are being considered as P3 projects: the $700-million Mackenzie Valley Highway, $150-million road to Whati and the Slave Geological Province road, which was estimated in 2015 to cost about $300 million if built to the Nunavut border.
Yellowknife Centre MLA Julie Green said earlier this month the technical nature of P3 projects often means MLAs may not be able to provide sufficient oversight and suggested the government needs to bring in third-party oversight.
Changes to the debt limit and what counts toward it could benefit MLAs who made costly election promises. Testart wants the GNWT to build a new Aurora College campus in Yellowknife, which Education, Employment and Culture Minister Alfred Moses earlier this month estimated could cost $60 million.
