Thank you, Mr. Speaker. In keeping with my theme of evaluating the McLeod government and with reference to my report of September 29, 2015, today I will talk about GNWT debt and our borrowing capacity, our inability to borrow due to federally imposed debt limit restricting progressive capital investment from 2000 to 2007 thus leading to the territorial infrastructure deficit we see today.
Arguably, this has curtailed efforts to diversify the NWT economy and tied the territory to an intensely cyclical resource development sector. As a result, it is the 16th and 17th Legislative Assemblies that have successfully pressured Canada to raise the debt limit.
My goal today is to evaluate the process we see before us. Have we been balanced in our approach or have we gone too far and put the taxpayers at risk?
Trends in debt and borrowing capacity are a good measure of fiscal performance. From 2007 to now, the total GNWT debt has risen dramatically by over 392 percent. Large capital projects such as the Deh Cho Bridge and the Mackenzie Valley Fibre Optic Link are major contributors to this growth.
So, although the new federally imposed limit has recently increased to $1.3 billion, as a general observation, as our total debt has grown, our borrowing capacity has shrunk. Interestingly, from 2000 to 2009 the GNWT ended up with a true cash surplus and did not require short-term debt. This short-term debt has generally increased in 2009 and has become significant during the life of this current administration. Hence, many will remember the increases we saw as short-term borrowing legislation in the 17th Legislative Assembly going from $175 million to $275 million and the $25 million additional approved last year for a grand total today of $300 million for short-term borrowing.
So what did this translate? Rising debt and softening of static of our GDP in combination has caused the GNWT debt to rise as a percentage of GDP. Couple this with our government’s poor response to economic conditions, our infrastructure deficit or our meager revenue outlet, the percentage of total debt to GDP will no doubt rise with larger capital projects looming in the shadows.
Mr. Speaker, I seek unanimous consent to conclude my statement.
---Unanimous consent granted
So, although the GNWT basks in the glory of a defined measure such as an Aa1 Moody credit rating for its debt management and current debt load, the real landscape paints a much bleaker forecast than Moody’s can safely measure.
Therefore, Mr. Speaker, we must be cautious moving forward. This was invariably echoed yesterday by the Finance Minister in his fiscal update. It is for these reasons of ignoring the warning bells that my assessment of the McLeod government in dealing with debt and borrowing management will only muster a C grade. Mahsi cho, Mr. Speaker.
Thank you, Mr. Dolynny. Member for Inuvik Boot Lake, Mr. Moses.
