With an outlandishly expensive fire season bringing the Northwest Territories dangerously close to hitting its debt ceiling, finalizing an increased borrowing limit with the federal government in the next couple of weeks is of utmost importance, says NWT Finance Minister Michael Miltenberger.
“It is critical. It is probably the most critical issue when it comes to the future of the territory,” Miltenberger told The Journal last week.
Putting out fires across the Northwest Territories has cost upwards of $55 million this summer – well beyond the budgeted $7 million – and has cut into the comfortable $100-million cushion Finance aims to keep between its spending and the current $800-million federal borrowing limit, making the success of ongoing discussions with Ottawa vital.
“With the fire season…we are hamstrung,” Miltenberger said. “If things don’t change, then the future for the rest of this government and the incoming government is going to be basically managing the store; looking after the capital plan to maintain the government and community infrastructure, but with no ability to do the things that devolution was intended to do, which was to give us the capacity to make economic investments and grow the economy and develop as a territory.”
The minister said he expects talks with federal Finance Minister Joe Oliver to conclude in the next couple of weeks, and hopes there’s a $1.8-billion pot of gold waiting at the other side in order for the territory to begin working on its coveted legacy infrastructure projects.
Among those projects are a $700-million highway between Wrigley and Norman Wells, a similarly priced transmission line intertie between the Snare and Taltson dams, a $150-million road to Fortune Minerals’ NICO mine and a territory-wide attempt at lowering costs in the communities through renewable energy, like the solar batteries being installed in Colville Lake.
“We want to look at doing that on a larger scale because that’s the only way we’re going to break that incredible dependence on fossil fuels,” Miltenberger said. “These are not insubstantial projects.”
Discussions with Ottawa were expected to conclude last spring, but former Minister Jim Flaherty’s sudden retirement threw a wrench into the process.
Miltenberger said he is optimistic the talks will increase the debt ceiling at least part-way to his intended goal, helped by the premier’s talks with the prime minister and the territory’s reputation for sound financial management.
Moody’s Investors Service recently gave the NWT another Aa1 credit rating, noting that the territory “adheres to prudent fiscal policy” and bases its financial planning on a Fiscal Responsibility Policy limiting debt to ensure affordability.
“The NWT, overall, displays strong governance and management factors,” the ranking stated. “Adherence to the Fiscal Responsibility Policy helps to ensure continued fiscal discipline as the territorial government addresses its identified infrastructure needs.”
The continued recognition gives strong backing to the territory’s pitch, the minister said.
“We’re a very well-run jurisdiction,” Miltenberger said. “We have very stable politics; we look after our money; we have a good credit rating; our debt to GDP ratio is one of the lowest in the country; our interest payments to revenues is one of the lowest in the country – less than a per cent of our revenues goes toward interest payments.
“All the indicators are there, and we’ve worked very hard to get there and stay there…That’s going to be one of the reasons we’re successful: because we’ve earned it and we’ve proven that we can manage ourselves as a territory.”
An announcement will be made once a deal is finalized, he concluded.