The Nunavut government says despite “fiscal challenges” and the on-going COVID-19 pandemic — which has forced residents into lockdown mode twice now — the territory maintains a “strong” credit rating.
The announcement in a government news release Thursday morning is based on a report from the credit rating agency DBRS Morningstar. The government says it was rated at AA (low) with a “stable trend.”
Finance Minister George Hickes says he “welcomes” the assessment that “Nunavut continues to keep its financial house in good order,” despite the challenges.
“Our government will continue to manage our finances well for the long-term benefit of all Nunavummiut,” Hickes said in a statement.
According to a news release on the DBRS website, the territory’s rating is “supported by the strong institutional framework” which “results in stable government finances and a low debt burden.”
It also notes the government of Nunavut faces several challenges, including the territory’s small economy which leads to a reliance on federal transfers and that its small and remote communities need higher capital spending.
The agency says it projects Nunavut’s total debt to be $436.6 million as of March 31, 2021, down 2.7 per cent from the previous year.
“Given the ongoing amortization of existing debt and the territorial government’s funding of capital with cash on hand, cash from operations and federal government contributions, DBRS Morningstar projects that Nunavut’s debt-to-GDP ratio will trend downward toward nine per cent by 2022–23,” the release, dated Nov. 20 reads in part.