The federal government has increased the Yukon’s borrowing limit from $400 million to $800 million.
Premier Sandy Silver spoke with the News on June 16 regarding what this increase will mean for the territory.
The increase was announced on June 12, and is currently pending approval from the Governor General, on the advice of the Treasury Board.
Silver said this has been something his government has been talking about with federal finance minister Bill Morneau.
Of the territory’s borrowing capacity, $209 million has already been used. This dates back to both Silver’s government and the previous one formed by the Yukon Party.
Silver said this increased limit would allow the government to move forward with major capital projects, specifically sighting the climate change strategy.
“This could allow us to make major infrastructure investments to support our green energy plans, and you know you can’t build major infrastructure without debt,” Silver said.
The premier spoke on some projects being considered.
One is a new pumped storage facility near Moon Lake and another is a proposed expansion of the Altin Hydro Project, owned by the Taku River Tlingit First Nation.
“It’s a really exciting time to work with First Nations and their economic development branches/corporations and come up with some solutions that will be affordable for Yukoners but also really important as we look to expand our population on our needs,” Silver said.
He clarified that just because the territory can borrow more money, it doesn’t mean that the government will max out the limit.
He argued that his government has done a good job managing resources, pointing to balancing the budget in 2020 before the pandemic hit.
“I think we have a government here at the helm that has expertise and ability to manage the finances and plan for the future,” Silver said.
He adds that this increased capacity will not be used to offset costs related to COVID-19, as the government already has money saved for it.
“We have the means within our government to budget properly for that because we did balance our budget,” Silver said.
Brad Cathers, the Yukon Party MLA for Lake Laberge, offered a reaction to the increased borrowing limit on June 15.
Cathers said he felt the announcement was snuck through by the Yukon Liberals and called the talks between the territory and the federal government secret. He added borrowing more money will burden future generations of Yukoners with debt.
He is also concerned there was no democratic oversight of the decision.
“We believe that a decision to burden future generations with massive debt should never be made behind closed doors by the seven members of the Liberal cabinet,” Cathers said.
He was worried about the amount of money the government could now borrow, considering it previously only had access to less than $200 million.
“It’s a clear indication that they plan to borrow an unprecedented amount of money,” Cathers said.
The last increase to the borrowing capacity took place in 2012.
Contact Gord Fortin at gord.fortin@yukon-news.com