B.C. Eases Borrowing Rules for Municipalities on Small Projects

British Columbia is giving municipalities more financial freedom by increasing how much they can borrow for infrastructure projects without first seeking public approval — a move local governments have been requesting for decades.

“The last time we changed this rule, Pavel Bure was skating for the Canucks,” joked Municipal Affairs Minister Ravi Kahlon, referring to the 1990s.

Under new rules announced Tuesday, local governments can now:

• Borrow up to $150 per resident (up from $50) without a referendum or AAP if the loan is repaid in under five years.

• Borrow up to 10% of annual general revenue (up from 5%) for longer-term projects, also without public votes.

Kahlon said the changes won’t bypass democratic input for major projects — referendums or AAPs will still be required for most high-cost initiatives — but will make it easier to greenlight smaller capital projects more quickly.

Relief for Cities Pushing Growth

Municipalities are generally barred from running deficits, and under previous rules, even mid-sized projects often required an expensive and time-consuming public approval process. Many local leaders say this hampered their ability to build essential infrastructure — especially as the province pushes for more housing and density.

“Kudos to the government — but like Oliver Twist said, ‘Please sir, we want some more,’” said Nanaimo Mayor Leonard Krog.

Nanaimo has seen three failed attempts in the last two years to get approval through an AAP for a new operations centre. Krog says the updated borrowing rules will help cities like his bridge the gap between provincial mandates and municipal realities.

“We provide the most basic services people rely on — water, sewers, waste — but we’re not treated like a full level of government under the Constitution,” he said.

Public Still Gets a Say — For Big-Ticket Items

More than 90% of B.C. municipalities have under 100,000 residents, so major projects — like new arenas or $100-million facilities — will still require public signoff.

One example is in Saanich, where a $150-million operations centre is under review. The district used an AAP to avoid the $300,000 cost of a referendum, but opponents believe they’ve gathered enough signatures to trigger one anyway.

“If the AAP fails, we’ll likely go to referendum,” said Mayor Dean Murdock. “It’s about being responsible with taxpayer money.”

In Kamloops, where AAPs have been used for projects like an arena and RCMP detachment, Deputy Mayor Mike O’Reilly defended the process.

“An AAP can fail and you still have the option of a referendum. But if you hold a referendum first and lose, you have nowhere to go.”

The Bottom Line

These long-overdue changes are meant to modernize how cities invest in infrastructure — allowing more nimble responses to growth without sacrificing democratic oversight. For smaller projects, the road to approval just got smoother.