Finance minister Caroline Wawzonek in the legislature in May 2020.
The federal government on Friday announced it has increased the Northwest Territories’ borrowing limit from $1.3 billion to $1.8 billion.
That debt ceiling is vital to the NWT as it provides a buffer beyond which the territory cannot stray when trying to find the money to pay for major projects.
The territorial government has made several big-ticket infrastructure projects central planks of its spending philosophy for the next few years, and so needs to find ways to pay its share of the bill – though those projects will still heavily rely on cash from Ottawa, which hasn’t yet been confirmed, to proceed.
Projects include the Mackenzie Valley Highway, expansion of the Taltson hydro system to the North Slave, and the building of an all-weather highway through a mineral-rich area northeast of Yellowknife to the Nunavut border.
“Borrowing has been and will remain necessary for the Government of the Northwest Territories to make strategic infrastructure investments,” finance minister Caroline Wawzonek said in a statement.
“With debt levels projected to approach the $1.3-billion mark by 2020-21, this increase to $1.8 billion will give our government much-needed flexibility as we explore future investments.”
How the Covid-19 pandemic will impact the NWT government’s balance sheet is not yet fully understood.
While much of the funding designed to help the NWT’s residents and businesses cope has come from Ottawa, there are still many changes to the territory’s finances – from costs associated with working from home and physical distancing, to the setting up of smaller-scale funds to assist different sectors.
Michael McLeod, the NWT’s Liberal MP, said increasing the borrowing limit would mean “increased investment in the projects that keep us safe.”
Federal finance minister Bill Morneau said the change would “ensure more options are available as they manage economic pressures linked to the COVID-19 crisis.”
The NWT’s 19 MLAs just passed the territory’s budget, their first since being elected in 2019.
The last time the borrowing limit changed was in May 2015. It is reviewed periodically.