SOMBA K'E/YELLOWKNIFE - The territorial government is counting on borrowing $90 million to get through to the end of this fiscal year ending March 31.

The accumulated debt is projected to grow to $450 million by 2010-11 and on to $525 million by 2011-12.

"Then it starts to decline, based on our fiscal strategy," said Margaret Melhorn, assistant-deputy minister of finance for the GNWT.

The fiscal strategy calls for government to reign in infrastructure investment and to cap spending growth at three per cent starting in 2011-12. But which departments bear the brunt of those spending caps and how they will affect programming have yet to be determined.

The government's business plans for each coming fiscal year are prepared in January.

"So discussion at this stage of who will be affected is theoretical," said Yellowknife Centre MLA Robert Hawkins. "They're trying to get into a non-deficit situation by capping spending growth to bring it in-line with revenue growth. Managing spending is one thing, cuts are something else. Previous attempts by this government to make cuts didn't go over very well."

The federal government has temporarily raised the maximum borrowing limit of the GNWT to $575 million - up from $500 million - due to the $165 million debt currently being carried because of the Deh Cho Bridge project. The power and housing corporations, meanwhile, are responsible for another $166 million of debt. Melhorn cautioned these debts are deceiving, because while they do add to a large total they either already are, or will become, self-financing.

The power corporation services its debt from utility revenues, the housing corporation is responsible for its debt and plans are for the Deh Cho bridge to pay itself off through tolls.

The territory's march toward its debt limit was highlighted nationally by Western Arctic MP Dennis Bevington's private member's bill to raise the limit to 70 per cent of gross revenues - nearly one billion dollars for the 2009-10 budget. Bevington's bill remains before Parliament.

Regardless of whether the private member's bill succeeds, plans are to reduce infrastructure investment and cap program spending growth. The GNWT is in pan-territorial negotiations with the federal government to have borrowing limits raised.

"By and large the debt wall increase is reasonable considering our infrastructure challenges," said Hawkins.

That opinion is not shared by Kam Lake MLA David Ramsay.

"Why are we in such a rush to get more credit when reality would indicate this government only has 10 months left to go before residents elect another government?" Ramsay told the legislative assembly on Nov. 4.

"It would only stand to reason the larger the debt, the larger the debt servicing, and that would drastically reduce our ability to fund programs and services for our residents."

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