N.W.T. asking to increase federal borrowing limit

The Northwest Territories finance minister described the territory's financial situation as dire and says the government is in the process of asking the federal government for more money.

Minister Caroline Wawzonek told the legislative assembly Friday that the rising costs of health care and emergency responses are some of the reasons the territory's debt is expected to reach $1.74 billion, very close to it's federally imposed cap of $1.8 billion.

"Requesting a borrowing limit increase is necessary to ensure we have the capacity to respond to expenditure shocks that have become more frequent," Wawzonek said.

The debt cap is a borrowing limit on Canada's territories imposed by the federal government, and it's not the first time the N.W.T. has had to ask to raise it. The N.W.T.'s current cap is set at $1.8 billion,up from $1.3 billion at the start of 2020.

One former MLA told CBCNews before the start of the 20th assembly that anytime the territorial government has asked to raise its debt ceiling, he's not aware of any instance that request has been denied.

The territory started the fiscal year with an operating surplus of $294 million the largest in the government's history according to Wawzonek. Though she said she hoped to use that surplus to cover the entirety of the 2024-25 capital budget, that surplus is expected to dwindle to $67 million.

Though more money from the feds will ensure the territory has capacity to absorb additional shocks, Wawzonek said the government will continue to look for creative ways to save.