Thank you, Mr. Speaker. I would like to take this opportunity to inform Members and NWT residents about the fiscal implications of the recent developments surrounding the Deh Cho Bridge Project.
Later today I will be tabling a supplementary appropriation estimates that will request the necessary authority for the GNWT to assume and administer the assets of the Deh Cho Bridge Project. The GNWT is also taking steps to assume the debt of the Deh Cho Bridge Corporation, totalling $165 million.
First, I want to assure Members and the public that assuming responsibility for the Deh Cho Bridge Project will not change the GNWT’s fiscal situation or the GNWT’s ability to pay for programs and services. The GNWT has always stood behind the project and is already committed to the payments needed to service this debt. Payments to meet the interest and principal obligations have been planned for and represent less than 1 percent of GNWT revenues. The bridge will be financed by the savings from the elimination of the current ferry and ice bridge operations and a toll on commercial vehicles crossing the bridge. The need for a GNWT contribution of approximately $2 million per year has also been planned for and factored into the costs.
Second, the request for appropriation authority is not a request for additional money for the bridge project. The projected cost of the project will be met from the $165 million already committed by the lenders plus the $15 million approved by the Legislative Assembly in February. The legislation we will be introducing will allow the funds to flow through the GNWT and be spent in accordance with the Financial Administration Act.
Third, assuming the project debt will not require the GNWT to take drastic fiscal measures to avoid hitting the debt wall.
With over $300 million in unused borrowing room as of April 1, 2010, taking on the $165 million debt associated with the project will not immediately cause the GNWT to exceed its borrowing limit. More importantly, federal Finance Minister Flaherty has agreed to work with us to accommodate the possibility that our medium-term borrowing needs could exceed the current limit by temporarily adjusting the borrowing limit.
We are currently in discussions with Minister Flaherty on the specifics of this accommodation. Minister Flaherty is taking steps to seek the appropriate federal Cabinet approvals for this temporary adjustment well before the GNWT could reach our current borrowing limit.
This accommodation will give us the room to implement the fiscal strategy already set out in the budget presented in January. One that will, through tight control over spending and a return to historical levels of capital investment, return to a sustainable fiscal path over the medium term.
We do not expect our Aa1 credit rating will be affected by assuming the debt. Moody’s Investors Service has already factored our obligation to support the debt into our credit assessments.
Mr. Speaker, I want to assure those listening today that this government is committed to the Deh Cho Bridge Project. We will continue to ensure the project is completed in a fiscally responsible manner. We have taken, and will continue to take, the measures needed to make this important NWT infrastructure project a success. Thank you.
Thank you, Mr. Roland. The honourable Premier, Mr. Roland.
