The City of Greater Sudbury’s growing debt load isn’t the “albatross” some people make it out to be, Mayor Paul Lefebvre told Sudbury.com earlier this week.
But, with the city’s spending gap pointing to infrastructure's ongoing degradation, he said the city doesn’t have much of an option.
“If we don’t do it, the outcomes are very dire,” he said.
“If it’s used wisely, it’s a tool we must have to invest in our communities,” he said of debt, adding that when infrastructure reaches a certain degree of disrepair it costs more money to maintain and “it’s putting good money after bad.”
Sudbury.com connected with Lefebvre in response to a recent article published by the right-leaning Fraser Institute, in which Lakehead University economics professor Livio Di Matteo crunched municipal debt numbers.
The City of Greater Sudbury’s debt load of approximately $341 million, plus another $259.4-million approved but yet to be secured, is already well-established.
Di Matteo’s analysis, however, pointed to Greater Sudbury’s per-capita debt far exceeding the provincial average ($1,841 against an average of $913), and growing at a much greater rate than the provincial average ($1,620 from 2004 to 2023, against a provincial average of $479).
“The disconcerting aspect of its debt acquisition is that most of the increase has occurred since 2014 rather than 2004,” Di Matteo wrote.
Indeed, Greater Sudbury’s debt has ballooned by 1,696 per cent during the past 10 years, from $18.98 million in 2004 to $341 million in 2024, and is anticipated to peak by 2027 at around $600 million.
Should Greater Sudburians be worried?
Di Matteo doesn’t provide a concise answer to this question in his report, deferring instead to the municipality’s residents for judgment.
Although municipal debt has skyrocketed in recent years — a path established by past city council and maintained by the current incarnation — Lefebvre said it’s all been to help address the city’s infrastructure spending gap.
Every piece of this debt has gone toward infrastructure whose lifespan exceeds the payback terms for debt incurred, he said, which points to a light at the end of the tunnel, albeit decades away.
This all works toward a future, “So that we can not be in the position we are in now to have this debt,” Lefebvre said.
Decades of underfunding converged with a slew of infrastructure reaching the end of its useful life at roughly the same time to create this situation, he said, pointing to an aging downtown arena and collection of fire stations as examples.
Meanwhile, city staff have been producing a series of reports outlining a fulsome picture of the city's infrastructure spending gap, which at latest estimate was $62 million annually.
“We’re trying to set up the city for success into the long term,” Lefebvre said, adding that debt, “if it’s done well,” can be “a very smart way to tackle our infrastructure deficit.”
“This is debt we’re accumulating for our facilities which will last longer than the term of the debt,” he said, later clarifying that his goal will be for current projects fuelled by debt to be accompanied by better facility upkeep and shoring up reserve funds into the long term to prevent the current infrastructure funding gap from repeating decades in the future.
Last month also saw the city set a long-term financial plan which includes annual tax levy increases averaging 3.2 to 4.4 per cent annually for the next decade. They also set next year’s water/wastewater rate increase at a status-quo 4.8 per cent for 2026, which will increase annually until it reaches six per cent by 2031 and will fill the water/wastewater infrastructure spending gap within approximately 18 years.
Recent years’ municipal infrastructure spending gap mapping has been mandated by the province, and city CAO Shari Lichterman clarified during a city council meeting last month that many municipalities are in a similar situation when it comes to recording infrastructure spending gaps.
By flagging which areas of municipal operations need investments, she said that updated reporting “prepares municipalities for funding opportunities, and also presents an argument for growth.”
Lefebvre reiterated this point in conversation with Sudbury.com, noting that if not for a Lively/Walden-area water/wastewater project being in the city’s long-term plan they wouldn’t have secured almost $28 million from the federal government and $34.9 million from the province. This project will shore up capacity for approximately 3,300 future housing units.
“We need to grow our tax base to address the needs we have in our infrastructure,” Lefebvre said. “That includes roads, and it also includes our facilities and amenities. That’s what makes our city a place people want to live.”
With $341 million in debt on the books, another $259.4 million has been OK’d for staff to secure as soon as the timing is right to get the best-possible rates.
Upcoming debt includes $135 million for the downtown arena/event centre (on top of $90 million already borrowed), and $124.4 million which city council approved within the city’s 2024-27 capital budget (toward the emergency services revitalization plan, Pioneer manor bed redevelopment, College Street underpass and other infrastructure projects).
Tyler Clarke covers city hall and political affairs for Sudbury.com.