Fact check: Jay Aissa claims Waterloo Region’s debt to hit $1.5 billion by 2024

“The $1.5 billion is really a number pulled out of mid-air,” Region of Waterloo budget committee chair Tom Galloway.


With five days until Ontarians elect new municipal councils and school boards on October 27, it’s time to question some figures presented as facts in a series of advertisements commissioned by the Jay Aissa campaign for Waterloo Regional Chair.

The anti-LRT business owner behind a halted court injunction to stop the Region of Waterloo’s Ion rapid transit system is one of seven candidates running for the region’s top elected job, including incumbent Ken Seiling.

Aissa’s ads claim the Region of Waterloo is projected to be saddled with $1.5 billion of debt by 2024. An alarming figure to be sure.

But where does the number come from? Is it accurate?

In short, no.

Aissa’s claim is nearly double what the region projects.

Now, the long answer.

Advertisements for the Jay Aissa campaign, including the one  linked below, feature the following claim:

“Debt has tripled in Waterloo Region since 2009 and with projects like the LRT, it’s projected to reach $1.5 billion in the next ten years.”

This claim can be broken into two parts. The current debt level and the projected debt level.

In an email sent Monday evening, Ronald Bowers, a communications staff member with Aissa’s camp, said the campaign’s current debt figure is based on an article in the Waterloo Region Record written by Paige Desmond and published August 25, verified by Bowers in public documents available on the Region of Waterloo’s website.

Desmond’s article states:

The Region of Waterloo’s debt has more than doubled since 2009, increasing from $185 million to $428 million in 2013.

By the end of this year, another $120 million will be added to the bill.

Bowers wrote, “$428 million + $120 million brings Regional debt to $548 million to the end of 2014.”

What appears to be missing from Bowers’ and Aissa’s figure is the fact the region will pay $41.2 million toward retiring their debt this year, according to Angela Hinchberger, the region’s director of treasury services.

Therefore, the region’s debt at year-end 2014 will equal $507 million, not $548 million, Hinchberger said.

The second part of Aissa’s claim is that the region’s debt is projected to balloon to $1.5 billion by 2024.

This figure, Bowers said, is devised using the Region of Waterloo’s capital plan for 2014 to 2023, which forecasts the region could take on slightly more than $1 billion in debt to pay part of the bill for $2.6 billion in planned capital projects.

Bowers said he then added the $1 billion debenture forecast to the (erroneous) current debt level of $548 million to come up with a figure north of $1.5 billion.

However, it appears Bowers’ and Aissa’s projection is again failing to account for annual debt repayments.

“The debt outstanding at the end of 2023 based on our 2014 capital plan would be $755 million,” Hinchberger said.

“So it’s half of the $1.5 billion that’s quoted [by Aissa's campaign] because the $1.5 billion does not take into account the  debt repayment that’s happening every year across those ten years,” Hinchberger said.

In addition, the region historically under-spends on its capital plan and issues less debt than expected, a fact that Moody’s Investor Service praises the municipality for in the New York-based bond credit rating firm’s latest AAA credit rating of the municipality’s finances.

In Hinchberger’s “more than decade,” in her position as director of treasury services, she estimates the region has borrowed anywhere from 30 to 60 per cent of what they planned to borrow in their capital forecast.

In other words, the region may very well end up borrowing anywhere from $300 million to $600 million to pay for capital projects over the next ten years as opposed to $1 billion as currently planned.

The debt forecast in the 2014 to 2023 capital plan is described as a “worst-case scenario,” by Tom Galloway, the region’s budget committee chair.

“The ten year capital forecast never represents what we would actually expect to issue,” he said

“There’s clearly some major, major problems with the [$1.5 billion] number.”

“I think they’re running fairly fast and loose with the numbers and doing some fear-mongering.”

“This is something we have already budgeted for, something we already have the property taxes for, it’s all part of the plan,” Galloway said.

If the current capital spending framework is realized, the region’s debt is expected to peak in 2018 and stabilize thereafter, according to Moody’s.

However, the Region of Waterloo updates its ten year capital plan annually.

Hinchberger said, “We are currently working on our 2015 to 2024 capital plan, and we are making significant changes in terms of timing of expenditures, other financing sources and we expect to actually issue less debt.”

In conclusion, the Jay Aissa campaign’s claim that the Region of Waterloo will be on the hook for $1.5 billion of debt by 2024 is false.

At best, it would appear the figure is an accounting oversight by Bowers when researching campaign messaging, mistakenly omitting debt retirement from the equation.

At worst, one might gather the $1.5 billion figure is a willful manipulation of the facts. What end would that serve? Well, I’ll leave that for you to decide.

Multiple requests to speak directly with Jay Aissa were declined by his campaign team. Multiple requests to Ron Bowers for further clarification were left unfulfilled at the time this story was published.

The five other candidates running for regional chair are Robert Milligan, Paul Myles, John Wolf, Moira Magee, and Oz Cole-Arnal in no particular order.