The City of Greater Sudbury’s debt load is on track to peak at $587.3 million by 2028.
The city’s debt load at the end of 2023 was $325.9 million, and city council has greenlit securing an additional $259.4 million. This includes $124.4 million toward infrastructure and $135 million toward a new arena/events centre in Downtown Sudbury.
This is a significant jump from a low of $18.98 million in debt recorded in 2014, and follows borrowing for such projects as the Pioneer Manor bed redevelopment, the library/art gallery project, Downtown arena, MR 35 and various other infrastructure projects.
The city has a self-imposed policy under which their annual repayment limit is no greater than 10-per-cent of its own-source revenue. Under this policy, city council could borrow an additional $200.6 million beyond current projections.
Under provincial guidelines, which allow for a greater debt threshold, the city could incur as much as approximately $1.3 billion in debt beyond current levels.
At the end of 2022 (the city’s latest debt peak of $338.5 million), Greater Sudbury’s total debt charges as a percentage of own-source revenues was 4.4 per cent, which was below the average among Ontario municipalities of 4.8 per cent (according to the 2023 BMA Study).
The city spent $22.1 million on debt charges last year, including $12.5 million on principal and $9.6 million on interest.
Although debt incurs interest, unspent debt is invested where it earns interest. Last year, the city’s total investment income was $37.9 million. A city spokesperson told Sudbury.com they do not uniquely track interest earned on unspent debt.
The city secured $200 million in debt in 2020 at an interest rate of 2.416 per cent, including $90 million for the arena/events centre and and $68 million for the library/art gallery, most of which remains unspent. The city’s average rate of return on its investments last year was 5.1 per cent.
Within the city’s 2024-27 capital budgets, city council approved an additional $124.4 million in debt for various infrastructure projects, including money for the Pioneer Manor bed redevelopment, the emergency services station revitalization project, the College Street underpass, a Frobisher salt/sand dome and a Vermillion system water treatment plant upgrade.
In April, city council greenlit a $200-million new arena/events centre in Downtown Sudbury.
The city has already borrowed $90 million toward the project, of which they have spent approximately $25 million, including expenditures on downtown properties ($20.42 million) and the since-cancelled Kingsway Entertainment District ($4.38 million), leaving a $135-million gap.
For additional context on municipal borrowing, per-household municipal debt in Greater Sudbury was $927 in 2019. In subsequent years, it hit $3,454 in 2020, followed by $3,279, $4,466 and then $4,300 by 2023.
According to a report tabled for last week’s finance and administration committee meeting of city council, municipal debt per household was projected to peak in 2026 (the specific year within the 2024-27 capital plan will vary depending on when debt is actually secured) at $8,104.
City of Greater Sudbury debt per year:
- 2014: $18.98 million
- 2015: $76.93 million
- 2016: $73.13 million
- 2017: $69.14 million
- 2018: $64.97 million
- 2019: $61 million
- 2020: $256.57 million
- 2021: $253.5 million
- 2022: $338.5 million
- 2023: $325.9 million
- 2024-27 peak: $587.3 million
Tyler Clarke covers city hall and political affairs for Sudbury.com.
