Nunavut's 2025-26 Budget: Strong Framework, Albeit Fiscal Uncertainty Has Risen

On February 24, 2024, the Government of Nunavut (Nunavut; rated AA (low) with a Stable trend) released its 2025-26 budget. The budget includes increased spending on government priorities and higher budget contingencies in anticipation of broader economic and trade uncertainty. The 2025-26 budget continues to build on the government's priorities laid out in Katujjiluta, the current collectively agreed-upon governing mandate.

-- A strong institutional framework results in stable government finances and a low debt burden, providing stability to Nunavut's credit rating.
-- Spending increases are focused on housing, healthcare, community, and family services.
-- Morningstar DBRS-adjusted debt is low and declining (projected at less than 5.0% of GDP by 2026-27).
-- Nunavut's economy continues to grow, although an unstable trade environment could present adverse effects for commodity demand and prices.

"With no new debt anticipated for core government or Qulliq Energy Corporation in the near term, we project Nunavut's debt-to-GDP ratio will decline to less than 5.0% by 2026-27," said Aditi Joshi, Vice President, Global Sovereign Ratings. "Furthermore, given the strong institutional framework, low debt burden, and capacity to afford additional debt financing, there is ample room within the assigned rating to withstand an increase in debt."