Home page

Text size

E-mail this page

SOMBA K'E/YELLOWKNIFE
The territorial government's debt ceiling got a $225-million boost as of March 8, which gives the government much-needed breathing room.

The limit for the Northwest Territories has been raised to $800 million from $575 million, as announced Thursday by federal Finance Minister Jim Flaherty.

"All the territorial governments have been asking for an increase in their borrowing authority, and for good reason: jobs and growth, good economic expansion in all the territories," said Flaherty during a teleconference. "And so we've been working on this together, we've had discussions together about when and how much and we're finally at the place we want to be with the support of the territories."

Flaherty wouldn't speak about any specific projects on the table for the NWT that influenced the decision to raise the borrowing limit, but acknowledged there are many infrastructure projects that could benefit from the increase.

"A lot of the projects, of course, are infrastructure projects to get the basic infrastructure in place so you can have the kind of economic development that creates jobs and growth. It's a great picture right now in the territories - all the territories are doing very well and we want to facilitate continuing growth," said Flaherty.

He said he is open to discussing the possibility of further raising the limit, and that he is satisfied the NWT can pay back any money they borrow.

"I am confident (the NWT) can pay that money back. I'm very confident in the economic future of the NWT and the other territories for that matter," he said.

The territory's finance minister, Michael Miltenberger, said he is pleased with the announcement - it's come at a time when the distance between the government's debt and the pre-March 8 ceiling was "paper-thin," he said. In the 2011 budget, Miltenberger predicted the government would be $515.9 million in debt by March 2012.

Miltenberger said the increase will fund infrastructure projects and cover unexpected expenses, such as fighting wildfires in the summer.

"It gives us the flexibility we need to move forward in year three and four (of our government) to build on our infrastructure requirements and it's a recognition of the fiscal management that we've had over the last number of years as a government," said Miltenberger.

There are several pressing infrastructure projects on the GNWT's plate. Stanton Territorial Hospital is in urgent need of a complete overhaul, which Miltenberger pegged at upwards of $200 million last August. A long-term care centre is also needed in Norman Wells, and Hay River needs a new hospital as well - and these are just within the health department.

Miltenberger emphasized on Thursday that even with the increased borrowing limit, the GNWT still has to be careful with its spending.

"It gives us some room. We are going to have to make choices, we're going to have to look at creative ways to deal with some of the challenges and some of the infrastructure pressures, but it is a significant step for us and gives us that breathing room that we needed and asked for," he said.

"This year and next year we've got to maintain fiscal discipline, build up our reserves, manage our money, recognizing the fact that like all other jurisdictions in the country we have some deficit issues we must deal with first," said Miltenberger. He said after that, they can focus more on funding infrastructure projects.

Dennis Bevington, speaking from the House of Commons in Ottawa, is happy the borrowing limit has been increased, but doesn't think it's enough.

"I'd say that's long overdue, this decision, and it should really be a formula that acknowledges the expanding territory," said Dennis Bevington, MP for the Western Arctic. "But at the same time, with this borrowing limit, the government will have breathing space, but it's still not the ultimate answer."

Bevington had drafted a private member's bill in 2010 that would have given the GNWT the authority to borrow up to 70 per cent of its estimated revenue, which in 2011 would have meant $951 million. It passed two readings, but died on the order paper when parliament was dissolved in April of last year.

"That would have been over a billion dollars this year, and, as the government grew, it would get larger," Bevington said.

The last time the borrowing limit was increased was in 2010, when it was raised by $75 million.

We welcome your opinions. Click here to e-mail a letter to the editor.