Councillors: Borrowing Isn’t “Found Money” — It’s a Claim on Nanaimo’s Future
To Nanaimo City Council:
You’re being handed new powers to borrow more money with less public friction. The question is whether you’ll use that power like leaders — or like gamblers.
Because debt is not a policy position. Debt is a bill. And the bill shows up every year as debt servicing — money that gets paid before roads are repaved, before facilities are repaired, and before “core services” are restored.
If you want a real-world example of what this looks like when it grows out of control, look at the Province.
In its 2025/26 Second Quarterly Report, British Columbia forecasts debt servicing expense of $5.092 billion.
Now connect that to a headline everyone understands on Vancouver Island: a cardiac cath lab is often discussed as roughly $100 million. At $13.95 million a day in debt servicing, one week of provincial interest equals one cath lab — give or take.
That is what “deficits steal tomorrow” means in real life: interest becomes the first claim on public money, and urgent needs become “too expensive.”
Now here’s the uncomfortable part for Nanaimo: the Province just made it easier for municipalities to travel the same road — quietly.
The new reality: “no-vote” borrowing has expanded
Provincial rules set a municipality’s maximum “liability servicing limit” at 25% of controllable and sustainable revenues. That’s the absolute ceiling.
But inside that ceiling is an approval-free zone: the Province states the approval-free liability zone is 10% of controllable and sustainable municipal revenue — and once a municipality’s total annual servicing cost exceeds that 10% limit, “all subsequent borrowing must receive elector approval.”
The Province didn’t hide the intent. A 2025 news release from the Government of British Columbia says municipalities can now borrow up to 10% of annual revenue without a public vote, and that the change increases longer-term “dependable revenue” capacity from 5% to 10%.
In other words: the system has been redesigned to make borrowing easier — and elector approval less automatic.
Nanaimo’s own staff spelled out what this means: up to ~$185 million
This isn’t theoretical. Nanaimo staff put the consequences in black and white in a September 17, 2025 report:
The approval-free zone increased from 5% to 10%.
Under the new amendment, the City can incur an additional $15.52 million in annual debt servicing costs without elector approval.
Staff note Council’s current debt policy requires elector approval for all long-term borrowing — but it’s a Council policy and Council can amend it.
And staff state that if Council amends the policy, then based on the Municipal Finance Authority of British Columbia indicative interest rate and 20-year amortization, the City could borrow up to approximately $185 million without elector approval.
That’s not a rounding error. That’s a major debt trajectory — potentially approved with no public vote at all.
Legal doesn’t mean legitimate
Council can always say: “It’s within the rules.” Fine. But residents are entitled to ask the higher standard question:
Is it legitimate to mortgage 20 years of taxpayer capacity on decisions voters never explicitly approved?
Because debt doesn’t just fund projects. It funds constraints:
Less flexibility when emergencies hit
Higher taxes when costs rise
Deferred maintenance when “there’s no room”
And the permanent excuse: “Sorry — we can’t afford it.”
That’s not theoretical either. The Province’s own fiscal update forecasts an $11.187B deficit for 2025/26.When borrowing becomes routine, deficits become routine — and interest becomes its own mega-program.
A leadership pledge Nanaimo needs now
So here are the commitments I’m asking you to make publicly — not because you must, but because you should:
Voluntary voter approval for major long-term borrowing
If the debt is big enough to change Nanaimo’s tax path for a decade, treat it like referendum-level consent — even if the Province allows an approval-free zone.A one-page “Debt Service Impact Sheet” before any borrowing vote
Show the annual debt service, the sensitivity to interest rates, and what gets squeezed if costs rise.A bright-line “core services first” standard
No borrowing for “nice-to-have” projects until core services and maintenance backlogs are honestly funded — and publicly reported.
Final Thought
Councillors: you now have a wider “no-vote” lane. Nanaimo staff have told you that lane could reach ~$185 million if you amend your own policy.
Use that power wrong, and you’ll create the same trap the Province is in — where huge public needs compete with an interest bill that gets paid first.
Remember the cath lab math: about one week of provincial debt servicing equals a ~$100 million cath lab.
That’s what “Deficits Matter” means.
They will eat your lunch and steal tomorrow.
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