Yellowknife, N.W.T. - The federal government has given the GNWT some financial breathing room.

Federal finance minister Jim Flaherty announced Thursday morning that the territorial borrowing limit has been raised to $800 million, up from the $575 million that the GNWT had been working under for quite some time.

Flaherty said the increase comes following discussions with Premier Bob McLeod and will go toward several economic-based sectors in the territory.

"Jobs and growth, good economic expansion in all of the territories, and so we've been working on this together, we've had discussions together about when and how much, and we're finally at the place we want to be with the support of the territories."

NWT finance minister Michael Miltenberger said the GNWT was close to the top of the former limit of $575 million and this allows them to do more, should the need arise.

"If there are unanticipated events, should we have for example an absolutely massive fire season given the dryness and the lack of precipitation, we'd have the ability to deal with that type of thing, but we were within the 575.

The Yukon and Nunavut each had their borrowing limits increased to $400 million.

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