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 offered by Moody’s, slightly lower than the Aa1 (negative) rating, which was Moody’s previous rating for the GNWT. The rating was downgraded to reflect that continued economic pressures and the unlikelihood of an economic rebound to pre-pandemic levels for at least 2-3 years will make it more difficult to mitigate debt growth.
Moody’s is tempering its concerns about the NWT’s economic outlook and its implications for the GNWT’s financial situation by recognizing that the GNWT’s debt remains affordable. Moody’s also notes that the GNWT has the fiscal capacity to meet further challenges thanks to substantial and predictable federal transfers and a fiscal responsibility policy that limits debt service to 5% of total annual revenue.
“Moody’s concerns about the NWT’s economic outlook are not new and stem from the GNWT’s prioritization of a large capital budget in 2022-23 to lay the foundation for future economic development. Despite this change, Moody’s rating still reflects its confidence in the GNWT’s ability to manage its budget and expenditures responsibly and maintain the financial capacity to meet other challenges.
–Caroline Wawzonek, Ministry of Finance
- A high credit rating supports current borrowing at a low interest rate and helps 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 considered high quality and is subject to very low credit risk.
- The GNWT’s Aa2 rating remains one of the highest among Canadian jurisdictions.
Media inquiries, please contact:
Manager, Public Affairs and Communications
The Department of Finance
Government of the Northwest Territories