The $79 Million Project That Costs $126 Million
Here’s how municipal debt gets sold: put the build cost in the headline, hide the interest in the fine print.
Nanaimo’s Public Works Yard is being framed as a project “under $80 million.” But the numbers presented to council tell a different story: the project price is $79.4M, and once debt servicing is counted, the total comes in closer to $126M.
That’s the part that should stop people cold.
Because what council really approved isn’t “a project.” It’s a multi-decade financial obligation—a commitment that outlives political terms, outlives most council careers, and absolutely outlives the attention span of a news cycle.
The hidden surcharge: ~$46 million for nothing tangible
If the all-in cost is about $126M and the project price is $79.4M, the difference is roughly $46.6M.
That $46 million doesn’t buy better fleet bays. It doesn’t repair roads. It doesn’t add police or firefighters. It doesn’t plow snow or patch potholes.
It buys one thing: time—the privilege of paying later instead of paying now.
Staff’s numbers make the structure explicit: the City plans to borrow over $76M through the Municipal Finance Authority, with a 20-year term at a reported 4.73%, and annual debt servicing around $6.3M.
That’s not a rounding error. That’s a second project—an invisible project—made of interest payments.
“Generational” — yes. But for who?
City staff themselves describe this as a “generational project.”
And that’s exactly the point: generational doesn’t just mean “these buildings will last.” It also means the bill will last—because the financing model makes taxpayers in the 2040s pay for decisions made in the 2020s.
Some of the people who will be paying for this in the final years of the loan aren’t even adults yet. Some aren’t even born.
That’s how municipal borrowing works: it’s a form of governance that treats future taxpayers like an unlimited credit card.
The cost of earlier priorities
This is where the real political story lives.
When a City borrows almost the entire amount (and here, the vast majority of the increase is long-term debt, with only small amounts coming from reserves), it’s a signal that financial capacity has already been consumed elsewhere. (nanaimonewsnow.com)
This isn’t about whether a works yard should exist. Of course it should.
It’s about the pattern of decision-making that leads to this outcome again and again:
spend freely on today’s priorities,
let operating costs ratchet upward,
treat core infrastructure as something that “can’t fit” inside normal revenues,
then borrow—so the pain gets pushed onto people who didn’t vote for any of it.
We already said “no” once
And don’t forget: the public already had its say.
In 2024, the City sought authority to borrow up to $90M, and the AAP came back as a clear failure—8,655 valid forms, above the 7,974 threshold. Elector approval was not obtained. (nanaimo.ca)
Now council has moved ahead with a new borrowing plan and a budget increase of $77,675,000 for the project. (nanaimo.ca)
So if you’re wondering why residents feel like they’re watching the same movie on repeat, that’s why.
The real headline
This isn’t an $80M project. It’s a ~$126M commitment.
And when governments normalize borrowing as the default tool, they normalize something else too:
A political culture where yesterday’s spending priorities become tomorrow’s permanent payments—paid by taxpayers who had no voice in the original decisions.
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