B.C. government triples borrowing capacity of cities to help fund new infrastructure | Daily Hive

B.C. government now allows municipal governments to borrow up to triple previous limits to help fund new infrastructure

Surrey City Hall. (City of Surrey)

Municipal governments across British Columbia now have significantly greater financial flexibility to build critical infrastructure more quickly, following changes to provincial borrowing regulations.

The provincial government announced today it has amended both the municipal liabilities regulation and the short-term capital borrowing regulation.

Under the new rules, municipalities can now borrow up to 10 per cent of their annual revenue — up from the previous limit of five per cent — for long-term debt without triggering a public vote, effectively doubling the amount.

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For short-term borrowing of less than five years, the per-capita threshold (total population of the jurisdiction) has now tripled from $50 to $150.

These updated limits, governed by provincial legislation, are intended to better reflect the substantial inflation in the cost of construction labour, materials, and equipment, as well as to adjust for the evolution of construction over time. This is the first time the limits have been changed in decades.

“Municipalities told us that outdated borrowing thresholds were slowing down their ability to deliver the infrastructure people count on,” said Ravi Kahlon, B.C. Minister of Housing and Municipal Affairs, in a statement today.

“We have responded by expanding the borrowing powers for municipalities so they can act faster, reduce costs and deliver the services that support growing communities. These changes reflect today’s economic realities.”

It should also be noted that the new borrowing powers apply to 161 municipal governments under the Local Government Act. It does not apply to the City of Vancouver, which is under the separate provincial legislation of the Vancouver Charter, and has different authorities and requirements for short-term and long-term borrowing.

Over the past year, the City of Surrey has also been lobbying the provincial government to establish a new Surrey Charter, which would grant the municipality broader and more flexible powers similar to those provided by the Vancouver Charter. Currently governed under the Local Government Act, Surrey argues that its rapid population growth and unique urban challenges warrant expanded authority. The proposed charter would give Surrey a wider range of powers, including increased borrowing capacity.

While the intent is to help municipalities build new and improved infrastructure to support population growth, new housing development, and economic growth, the newly enacted borrowing limit changes may also ease some of the growing pressure on the provincial government to provide direct funding to local governments to cover a meaningful portion of infrastructure project costs.

The provincial government is grappling with significant annual budget deficits and a growing debt burden, with no clear path to resolution amid a sluggish economy and B.C. and Canada’s underlying structural challenges. The 2025 B.C. budget, released earlier this year, reflected a tone of austerity.

Some municipalities have also raised concerns about recent provincial housing legislation that increases residential density and limits how cities can collect developer contributions — changes that, they argue, are being implemented without ensuring the necessary infrastructure is in place to support the added growth.

Under provincial legislation, B.C. municipal governments are not permitted to run deficits on their annual operating budget, which further challenges infrastructure renewal.

On its part, the provincial government asserts it has provided meaningful support, including the $1 billion Growing Communities Fund in 2023, which provided 188 municipal and regional governments across the province with a one-time grant to support projects such as new transportation infrastructure, utilities, and community and recreation facilities.

“This program is an important step to enable municipalities to build quickly and efficiently, responding to the rapid growth in our communities. We are facing pressing issues — housing and infrastructure — in our cities, and we look forward to continuing to work with the Province to address the needs of our communities,” said Mike Hurley, Mayor of Burnaby.

Ross Siemens, mayor of Abbotsford, added, “Abbotsford is growing rapidly, and that growth brings an increased demand for upgrades to infrastructure like roads, utilities and community amenities. These changes will make it easier for all growing communities in B.C. to move forward on major projects more efficiently and with greater flexibility. We are grateful to the Province of B.C. for supporting local governments to better meet the needs of our growing communities.”

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