Feds increase N.W.T.'s borrowing limit to $1.8B

The federal government announced Fridaythat it had increased N.W.T.'sborrowing limit by $500 million, bringing its debt cap to $1.8 billion.

The increase comes as the territory creepsup onits previous limit of $1.3 billion.

Unlike Canada's provinces, the Northwest Territories, Nunavut and Yukon all have debt caps imposed by the federal government. The Northwest Territories had been within about $300 million of the limit earlier this year, which doesn't leave much room for the large infrastructure projects the territory has its sights on.

We know that this increase to the Northwest Territories' borrowing limit will ensure it has access to financing options which will support the strategic investments required to meet the needs of its population," said federalFinance Minister Bill Morneauin a press release.

"Furthermore, this will ensure more options are available as they manage economic pressures linked to the COVID-19 crisis which is affecting all Canadians."

In 2019, the territory's then-finance minister Robert C. McLeod began talks with the federal government to have the N.W.T. borrowing limit increased.

According to Friday's press release, the federal government "took into consideration the government of the Northwest Territories' improved capacity to carry debt and changes in its economic and fiscal outlook since the last review in 2015."

N.W.T. Finance Minister Caroline Wawzonek noted that the increase comes as the territory approaches the former $1.3 billion limit.

"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," she stated in the press release.

"Borrowing has been, and will remain necessary for the government of the Northwest Territories to make strategic infrastructure investments."

"With today's announcement, we will be able to see increased investment in the projects that keep us safe and help us keep building a better future," stated N.W.T. MP Michael McLeod in the press release.

The previous $1.3 billion limit was set on May 28, 2015. The increase announced Friday requires formal Governor in Council approval.