Yellowknife — July 22, 2020
Moody’s Investors Service released the results of its periodic review of the Government of the Northwest Territories (GNWT) credit rating yesterday and confirms its Aa1 credit rating.
The Aa1 rating is the second highest rating available from Moody’s, and remains one of the highest among provinces and territories. The rating demonstrates the confidence Moody’s has in the GNWT’s financial management despite revenue and expenditure shocks related to the COVID-19 pandemic. The GNWT expects an operating surplus this fiscal year, even with COVID-19 – making the GNWT one of the few provinces or territories with such a positive expected fiscal result.
The GNWT has a good base to build upon. A significant portion of GNWT revenues come from federal transfers, at roughly 80 per cent, with various own-source revenues comprising the remainder. This highlights the need to carefully control expenditure growth, since the capacity to raise meaningful additional revenues is limited.
While additional costs have been incurred because of COVID-19, the GNWT is working hard to ensure that finances are sustainable. First steps include moving to four-year business planning as part of the budget development process and hosting a pre-budget dialogue over the summer months to gauge residents’ views on how best to position the GNWT’s budgeting priorities in light of the current reality and the need to ensure future fiscal health and sustainability.
Quote
“This credit review is a positive reflection on the GNWT’s ability to responsibly manage its budget and expenditures. While COVID-19 has led to additional costs, the GNWT is working hard to ensure that our finances are sustainable and we are implementing a multi-year plan to improve our financial position. I look forward to engaging with residents over the next few weeks to get their input on how best to position the GNWT’s budgeting priorities in light of the impacts the response to COVID-19 has had on our territory.”
-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 Aa1 rating is the second highest credit rating issued by Moody’s. An Aaa rating is judged to be of high quality and is subject to very low credit risk.
- The GNWT’s Aa1 rating is one of the highest among Canadian jurisdictions.
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For more information, please contact:
Todd Sasaki
Senior Communications Officer
Government of the Northwest Territories
867 767-9168 ext. 15015