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Debt ceiling doubles

Jeanne Gagnon
Northern News Services
Published Monday, March 26, 2012

NUNAVUT
The federal government has doubled Nunavut's borrowing limit to $400 million, the federal finance minister announced on March 15.

Jim Flaherty also increased the borrowing limit of the other two territories.

"These increases are sustainable and reflect the increased financial resources available to the territories to manage their obligations going forward," he stated in a press release.

Nunavut MP Leona Aglukkaq added "This increased authority to borrow will support the ability of the territorial governments to make important investments in the future."

This is the first borrowing limit increase Nunavut has experienced since division in 1999 when the debt cap was set at $200 million.

The federal Nunavut Act limits the amount of debt the territorial government can assume.

Nunavut Finance Minister Keith Peterson said he welcomes the increase while emphasizing the importance of managing this debt "prudently," in a press release.

"This decision means our government gains flexibility to invest in much-needed territorial infrastructure," Peterson stated in a press release.

"The GN needs to carefully balance today's investments with our ability to repay our debts in the future."

Nunavut owed the federal government about $140 million as of December 2011.

Peterson said the increased borrowing limit allows them the flexibility to look at some projects, namely the Iqaluit airport P3 (public-private partnership) project.

He added the increased limit allows them the confidence they will be able to borrow their share of the money if they decide to proceed with it.

"We'll take the double, the ($400 million)," he said, adding it was a deal at least a couple of years in the making. "We're pretty happy about it all. It's a little confidence booster for us from Ottawa," he said. "We're going to be very wise about how we use our increased borrowing limit."

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