Long-term Debt Limits in Saskatchewan - Nipawin

Manitoba
Legislative and Regulatory Environment
All borrowing by urban governments in Manitoba is
conducted in accordance with the Municipal Board Act,
the Municipal Act, the City of Winnipeg Charter Act, and the
Debt Management Policy of the City of Winnipeg. The City
of Winnipeg Charter Act applies only to that City, while the
Municipal Board Act and Municipal Act apply to the remainder
of Manitoba’s urban governments. The two provide largely
similar methods and requirements regarding municipal
borrowing and debt limits.
The Municipal Board Act provides the legislative framework
for the province’s twenty-five member Municipal Board, and
charges it with the duty of reviewing all bylaws that include
capital borrowing in municipalities other than Winnipeg. As
a quasi-judicial body, the Municipal Board is empowered to
reject, amend or accept all proposed capital borrowing bylaws;
they do so according to a legislated series of considerations,
including “the nature of the work, undertaking or proposed
project,” “the necessity or expediency thereof,” and “the financial
position of the local authority.” The Board has some scope for
discretion and further investigation, and may consider “any
other relevant matter” (The Province of Manitoba 2011).
In passing judgment, the Municipal Board may conduct
public hearings as well as require urban governments to
submit five-year capital forecasts. Furthermore, Section 69 of
the Municipal Board Act states that the Board may “require the
municipality to submit the by-law or contract for the sanction
of the voters or ratepayers …” Municipal governments are not
bound by the approval of the Municipal Board for any debts
that are repayable within the year (Amborski 1998, 19–20).
Neither the Municipal Board Act nor the Municipal Act set
a statutory limit to debt for urban governments. However,
the ratio of debt to municipal assessment is often used by
the Board to determine whether taking on additional debt
is advisable. Amborski’s qualitative study of the Municipal
Board’s actions showed that the Municipal Board often took
population trends and economic growth potential into
consideration (1998, 20). In of the 33 applications made to
the Board in 2008 and 2009, 9 were accepted, 10 dismissed
and 14 withdrawn (Tyler 2011, 72). Unless the Board can be
shown to be applying the law incorrectly or acting beyond its
jurisdiction, its decisions cannot be appealed.
The City of Winnipeg Charter Act requires that City to
submit its borrowing plans to the Minister of Finance for
approval. The Minister may, at his discretion, forward the
application to the Municipal Board for review, though the
Minister is not bound by the Board’s advice. Like Manitoba’s
other urban governments, no statutory limit on debt exists.
However, Winnipeg does regulate debt according to the
guidelines established in an internal document, the Debt
Management Policy; this self-imposed policy was intended to
shift the City toward pay-as-you-go financing for tax-supported
capital works. In 1996, City Council established an annual
debt limit of $61 million on both internally and externallyraised
financing for tax-supported capital projects. The Debt
Management Policy is the only document that imposes a limit
on capital borrowing and reports “no new external borrowing
for tax-supported capital expenditures has been approved
since 1998” (The City of Winnipeg n.d., 2) The policy also
imposes a restriction on the length of financing periods. Under
normal circumstances, the repayment period will not exceed
the useful life of the asset being financed.
All urban governments in Manitoba are free to pursue
loans in the private sector. The City of Winnipeg does not
have a specific objective to maintaining relationships with
rating agencies but does note in the Debt Management Policy
that a high rating is desirable as it determines interest rates
and may be used as a comparative measure of general wellbeing.
Winnipeg is currently rated by Standard and Poor’s and
Moody’s. The City of Brandon also maintains a relationship
with Moody’s.
None of the acts, regulations or policies explicitly mentions
utility debt, or any other type of specific debt.
Municipal Stakeholder Perspectives
City administrators who agreed to be interviewed
reported that their ability to grow was not inhibited by the
decisions of Manitoba’s Municipal Board. An administrator
of one smaller urban government confided that the amount
of debt that they had been cleared for exceeded what he
deemed to be fiscally responsible.
One emerging trend involves financing utility projects
through ratepayer or user fees rather than taxes. Though
loans are still required, these schemes are based on utility
revenue forecasts and allow for increased security for the
province, which is ultimately responsible for insolvent
municipalities. The administrator who brought this trend to
light noted that their upcoming capital project will be funded
by taxpayers but that passing the debt on to ratepayers
entirely was considered more politically legitimate.
The Association of Manitoba Municipalities is currently
arguing in favour of development fees – one-time levies on
developers to finance the costs associated with development
– to fund projects such as extending utility services to new
housing projects. Their argument is that it is unfair to burden
existing taxpayers with the expenses of municipal expansion.
The Association argues instead that development expenses
ought to be transferred to buyers of new homes, commercial,
and industrial properties (Slack 2011, 40).
Alberta
Legislative and Regulatory Environment
Municipal debt-limits are regulated in Alberta through
the Municipal Government Act. The Act outlines how debtlimits
are determined, including a basic formula. Alberta is
unique in that it has legislation governing debt-limits for
regional service commissions – corporate structures that
are owned by municipalities and provide utility services on
a regional basis. Municipalities in Alberta have established
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