Looming Kamloops debt may soon exceed annual revenue

The debt-to-income ratio at Kamloops city hall is growing.

The list of upcoming Build Kamloops projects and the long-awaited police station have city hall borrowing hundreds of millions of dollars, and the amount owed on those loans may soon surpass its annual budget.

City hall debt is expected to peak in 2029 with $426 million in loans that can be paid off over up to 30 years. While the city’s budget by that year isn’t known, last year’s predictions expected 2025 would see the city collect $130 million less than that for the entire year.

With several major projects on the go that could end up exceeding a half-billion dollars in loans once approved, and around a $1 billion in infrastructure work pegged for the next decade, Kamloops taxpayers should expect to see the interest hit their tax bills.

In a city of nearly 100,000 people, it means around $370 will be spent on loan payments for every resident in 2029. Of that amount, $230 is simply paying the interest. City hall’s annual loan payments go over $35 million per year by 2028, roughly tripling annual payments over the past eight years.

In the Okanagan, Kelowna’s debt reaches even higher by comparison, estimated at around $500 million by 2030.

But Kelowna also has a substantially higher budget, expected to reach more than $1 billion in 2026, and almost 70,000 more residents expected. Both cities have a swath of major projects coming, expanding their stock of arts and recreation facilities, while Kelowna is also putting millions into its airport.

Although city debt in Kamloops will likely soon exceed its annual budget, it’s the annual loan payments that dictate just how much it can borrow.

While Kamloops is closer to the limit than Kelowna, both are staying below the provincially set threshold.

BC cities cannot spend beyond a quarter of their annual budget on loan payments. For Kamloops, it could reach around 15 per cent of its entire budget in the next few years.

The most recent provincial data shows city borrowing as recently as 2023. At that time, BC municipalities owed a combined $3.3 billion in debt, and Vancouver made up nearly a third of that. Kamloops and Kelowna sat at around $69 million and $71 million, respectively.

But since the province made it easier for cities to borrow money for big projects, that municipal debt will likely grow in cities beyond just Kamloops and Kelowna.

That $426 million peak in Kamloops may underestimate the debt coming.

The $150 million police station, for example, has yet to be approved. There are more Build Kamloops projects coming in the future, like a new curling club, and there is another set of loans city hall hasn’t had approved yet. Included in those outstanding approvals is a $16 million land purchase to expand its civic operations yard.