The Town of Cochrane is among the authorities that will be paying less interest when borrowing money from the provincial government for capital projects through its Loans to Local Authorities program.
The Alberta government has announced it is eliminating the current half per cent premium charged in the 2025 budget. Municipalities, counties, airports, and irrigation districts will be paying the same interest rate as the province on money borrowed for capital projects
Provincial officials estimate it will save municipalities about $7 million in 2025-26 and about $12 million in 2026-27.
“This is good news for municipalities, as we are all balancing and prioritizing the infrastructure needs of our communities – from our water and wastewater infrastructure, recreation facilities, roadways, and more," says Stacey Loe, town executive director or corporate services in a written statement.
She says the town continues to focus on funding projects through alternative sources, such as the Community Revitalization Levy, offsite levies and provincial grants.
"When we do need to consider using debt to fund capital projects, this announcement supports us in lowering the cost of borrowing – resulting in an overall decrease in cost to deliver a project,” she says.
Mayor Jeff Genung says Cochrane has been supporting advocacy efforts of the Alberta Mid-Sized Cities Mayors’ Caucus, which he chairs, and the AB Munis to lower the cost of borrowing.
"We appreciate that the province has heard and actioned this request,” he states.
The Loans to Local Authorities program was created to ensure that all municipalities and qualifying local authorities in Alberta have access to funds at the lowest possible cost.
The adjustment was made to help reduce the budgetary pressures faced by local governments in a time of high interest rates and to free up funds for purposes other than servicing debt.