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Tuesday, December 5, 2017 - 10:23

Discussion B - OPTIONS FOR MEDIUM TERM FINANCIAL HEALTH

The following highlight challenges, opportunities and possible policy options for the medium-term. Option 1: Index the Borrowing Limit to GDP The Government of Yukon could negotiate with Canada to tie its borrowing limit to the Yukon economy. As the economy grows, so too does the territory's ability to manage debt and therefore so too should its borrowing limit increase. For example, a borrowing limit of 15% of GDP (gross domestic product) would be roughly equivalent to the current limit of $400 million in 2015 but would potentially increase to $485 million by 2020.
What do you think?
  • What pros, opportunities and benefits are associated with this option?
  • What cons, challenges and limitations are associated with this option?
Richard
Department of Finance

Comments

egras
Tuesday, December 5, 2017 - 14:43
There is risk if the GDP is tied to resource sector and the Companies have not invested in future proofing i.e. the cleanup and refurbishment of the site . Guarantees need to be in place at the OUTSET to mitigate unexpected shut downs and or complications associated with the industry. Take the mess that Curra Resources left the taxpayers after they were given exemptions to resource extraction liabilities. it is costing far more than any revenues the Yukon ever received from the mining. Lets not do that again!
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takhininurse
Tuesday, December 5, 2017 - 14:44
Cap the borrowing limit to $400 million and when annual revenue excedes annual costs then start paying down the 400 million debt.
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