The GNWT has received a high investment grade credit rating showing that their fiscal plans are sound, according to officials.
Moody’s Investors Service published its decision on March 26, giving the GNWT a Aa1 credit rating, just one level below the highest possible rating of Aaa.
The rating takes into account the $165 million in debt related to the Deh Cho Bridge which is “not expected to alter the NWT’s credit profile in a material way” according to the opinion notes provided in a press release sent out on April 6.
It shows that the overall economy of the NWT is sound, generating high employment and GDP per capita.
The rating for the NWT is equal to that of Ontario and Saskatchewan, according to the release.
“We are at the same rating in spite of all the tough times that everyone has been in,” said Minister of Finance J. Michael Miltenberger. “I think it’s a credit to the work of the legislature and the government trying to manage carefully the affairs and the money of the people of the Northwest Territories.”
“The only higher credit rating is Aaa and that’s the Government of Canada and provinces like Alberta.”
With this high credit rating, the GNWT is seen as a better investment opportunity, which will make any short term borrowing planned for the year a more attractive option for lenders. The budget for the 2010-11 fiscal year includes plans for over $200 in capital investments, not including the Deh Cho Bridge, with some short term borrowing to provide breathing room for northern businesses and residents during the economic recovery. Greater loans are given to ___ with higher credit ratings.
“It is an indication we are managing the $1.3 billion budget properly,” said Miltenberger.
The Minister is pleased by the high rating given by Moody’s as it is evidence that the GNWT’s financial plans are sound for the upcoming year and that they managed their finances well previously.
“It is an endorsement for the fiscal path that we have been on as an assembly here from the beginning, where we have tried to manage our money,” said Miltenberger. “We recognized when we were moving into the recession that we would have to play a stabilizing role as the government and carry some debt but still manage that very carefully and still deliver the programs. We have had some of the biggest capital programs in the history of the government, but all the while we kept an eye on our finances.”