Can Ontario Municipalities Borrow More to Make Needed Investments?

Toronto and other Ontario municipalities face considerable challenges to make the capital investments they need to keep up with aging infrastructure and to meet the growing demand for public services. Their traditional fiscal model, dependent on federal and provincial transfers, the revenue from property taxes, and other own-source revenues, is barely sufficient to fund operational costs. Given this reality, which new financial instruments and strategies could municipalities rely on to take advantage of today’s low interest rates? What can we learn from municipal lending markets elsewhere? IMFG Post-Doctoral Fellow Gustavo Carvalho analyzed financial instruments and strategies that have been successfully implemented elsewhere, with a focus on green bonds, credit enhancements, and pooled issuance entities.