Debt limits raised for territories

In the U.S., limits on government debt result in dramatic political showdowns, full of threats to shut down government services and haggling over social programs. In Canada, the debt ceiling is raised by fiat, at least in the case of the territories.

The federal government announced today that it was raising the maximum amount that territorial governments may borrow, citing increased economic activity in the north which will make them better able to repay their debts.

“This increased authority to borrow will support the ability of the territorial governments to make important investments in the future,” said Leona Aglukkaq, Minister in charge of the Canadian Northern Economic Development Agency.

The maximum amount that may be borrowed by the Northwest Territories has been increased to $800 million, while the Yukon and Nunavut governments may now borrow up to $400 million.

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