Finance committee  The intention of the new regulation is that it will be perfectly clear to territorial governments, as they are considering various projects, and particularly how to structure them and what instruments they may wish to use to finance them, exactly what their options are.

Finance committee  Yes, clear guidelines are the objective.

Finance committee  The legislation is not going to change the amount of funding received from the Government of Canada to territorial governments. But I can observe that, as it's disclosed on the Finance Canada website, for example, if you're looking to territorial formal financing, I have figures here that read that in 2005-06, territorial formal financing was just over $2 billion to the three territories in total, and for the 2012-13 year it's $3.1 billion.

Finance committee  Yes.

Finance committee  Limits are not indexed automatically to inflation. The method, if you will, for now, is that we set the limit to an amount. That provides, as I said, for managing any projects over a very long term. You would know, for all years, what your limit is going to be. If there is a change in the territory's economic circumstances, and there's an application to the Minister of Finance for a review, they would then look at those changes and what the impact on the territorial government's financial capability to carry debt would be.

Finance committee  I'm sorry. Can you be more specific?

Finance committee  This is an authority that is within the federal act, which describes the powers of the territorial governments. We do not conduct an analysis of the capacity or capability of aboriginal governments within the territories.

Finance committee  That's correct.

Finance committee  There is a relationship, obviously, between a government's decision to take on debt and its ability to provide programs and services. Both of the territorial news releases actually acknowledged that link. They spoke to the importance of understanding that borrowing takes away from a government's ability to offer important programs and services and that they need to balance decisions taken today with the future.

Finance committee  —or influence the decisions they take. The borrowing limit is done in a parallel fashion. We've set an amount, and within that they are free to take whatever decision—

Finance committee  Certainly the press release from the Northwest Territories references successful discussions between the federal Minister of Finance and the three territorial ministers of finance.

Finance committee  There were two pieces announced in the budget. First, the budget stated that legislation and regulations would be introduced to clarify the rules. We've been consulting with the territorial governments since 2010 on this initiative, so that was not a surprise. On the announcement of the new borrowing limits, the reaction of two of the territories was set out in press releases they issued on the day of the announcement of the increase, March 15, 2012.

Finance committee  In light of the growing number of questions about exactly how this would work and what was intended to be included or not, a review of the territorial borrowing limits was initiated in 2010. It was conducted in parallel with the regular workings of officials between the governments.

Finance committee  The borrowing limit is reviewed upon request by a territorial minister of finance. The reason for that is it's left at an amount to ensure predictability for fiscal planning purposes. So you have an amount, it applies, and you know what it is. These are long-term projects we're talking about, so you need to know what your room will be for a very long term.

Finance committee  To respond to the specific question, I would point to the current language, just as an example, of the Yukon Act. So I'll sort of work from the bottom of your question and work back. The current guidance that is provided for the administration of this federal authority, which has been in these acts and has been administered since, by my record, the 1980s, reads in its entirety, “No money may be borrowed under a law made under paragraph (1)(a) without the approval of the Governor in Council.”