Ottawa doubles Nunavut’s credit limit

(updated 1:00 p.m.)

The Government of Canada has increased the maximum long-term amounts that may be borrowed by the Governments of the Northwest Territories, Yukon and Nunavut.

Nunavut sees its borrowing limit doubled from $200 million to $400 million.

“These increases are sustainable and reflect the increased financial resources available to the territories to manage their obligations going forward,” said federal Finance Minister Jim Flaherty in a March 15 news release.

The maximum amount that may be borrowed by the GNWT has been increased to $800 million, and the Government of Yukon was upped to $400 million.

As required under federal legislation, these increases were approved by the Governor in Council.

“This increased authority to borrow will support the ability of the territorial governments to make important investments in the future,” said Nunavut MP Leona Aglukkaq.

Right now, Nunavut owes about $140 million in long-term debt, almost all of which was inherited from the GNWT in 1999.

Nunavut’s Finance Minister Keith Peterson said he welcomed the plan to increase the GN’s borrowing limit to $400 million. “This decision means our government gains flexibility to invest in much-needed territorial infrastructure,” he said in a March 15 GN news release.

“Debt can be a useful financial tool,” he said. “However, borrowing takes away from a government’s ability to offer important programs and services. The GN needs to carefully balance today’s investments with our ability to repay our debts in the future.”

The increased amount of debt Nunavut can incur may not meet the territory’s needs for new infrastructure, Nunavut’s deputy minister of economic development and transportation, Bob Long, said March 15 during a Senate committee hearing on energy.

One billion dollars would allow Nunavut to tackle some of the large infrastructure projects, like the proposed hydroelectric project near Iqaluit, he said.