Yellowknife — March 16, 2022
The Government of the Northwest Territories (GNWT) has received an Aa2 (stable) credit rating from Moody’s Investors Service.
The Aa2 rating is the third highest rating available from Moody’s, slightly lower than the Aa1 (negative), which was Moody’s previous rating for the GNWT. The rating was lowered to reflect that continued economic pressures and the unlikelihood of an economic rebound to pre-pandemic levels for at least 2 to 3 years will make mitigating the growth in debt more challenging.
Moody’s tempers its concerns about the NWT economic outlook and its implications for the GNWT’s fiscal situation by acknowledging that GNWT debt remains affordable. Moody’s also notes that the GNWT has the fiscal capacity to respond to further challenges because of substantial and predictable federal transfers and a Fiscal Responsibility Policy that limits debt servicing to five per cent of total annual revenues.
Quote(s)
“Moody’s concerns about the NWT economic outlook are not new and stem from the GNWT’s prioritization of a large capital budget in 2022-23 to provide the foundation for further economic development. Despite this shift, Moody’s rating still reflects its confidence in the GNWT’s ability to responsibly manage its budget and expenditures and to retain the fiscal capacity to respond to further challenges.”
-Caroline Wawzonek, Minister of Finance
Quick facts
- A high credit rating supports current borrowing at a low interest rate and helps to ensure affordable borrowing costs for future strategic investments.
- The Aa2 rating is the third highest credit rating issued by Moody’s. An Aa rating is judged to be of high quality and is subject to very low credit risk.
- The GNWT’s Aa2 rating remains one of the highest among Canadian jurisdictions.
Related links
Media Requests, please contact:
Todd Sasaki
Manager, Public Affairs and Communications
Department of Finance
Government of the Northwest Territories