Loan Authorization Bylaw Requirements

Certain legislative requirements must be met before municipalities and regional districts may receive provincial approval for long-term borrowing (loan authorization bylaws). Ministry staff review these bylaws against the requirements of the legislation before approval.

Local governments may borrow long-term through a loan authorization bylaw for any of the purposes listed in section 179 of the Community Charter. Borrowing for capital projects is the most common reason for a loan authorization bylaw.

All local government loan authorization bylaws require approval by the Inspector of Municipalities and most also require either approval of the electors (municipalities) or participating area approval (regional districts) before they may be adopted. Other legislative requirements must also be met.

Once a loan authorization bylaw has received all its approvals, the local government may undertake temporary borrowing to finance the construction and development of a capital project, or the local government may proceed directly to long-term debenture debt through a regional district security issuing bylaw. Security issuing is undertaken through the Municipal Finance Authority, that pools all local government long-term debt and sells it through the bond markets.

Provincial Bylaw Review

In support of the Inspector of Municipalities’ approval role, ministry staff review local government loan authorization bylaws against the requirements of the legislation.

Local governments may submit their loan authorization bylaws along with supporting materials by email to:

A hard copy is not required. The bylaw may be attached separate from the supporting materials.

If a bylaw is expected to be complex or out of the ordinary, local governments may wish to consult with ministry staff early in the process, as additional supporting documentation may be required.

Borrowing Process

There are several steps in the process for a local government to undertake long-term borrowing, each of which may take several weeks or months to complete. Local government loan authorization bylaws are valid for five years from the date of adoption.

Steps in the process:

  1. Loan authorization bylaw drafted and council or board gives it three readings
  2. Municipal council or electoral area director provide consent (if applicable)
  3. Provincial review and statutory approval by the Inspector of Municipalities (6-8 weeks)
  4. Approval of the electors (if applicable, 8-11 weeks)
  5. Adoption of the bylaw by the council or board
  6. Challenge period (1 month)
  7. Provincial review and certificate of approval by the Inspector of Municipalities (2-4 weeks)
  8. Municipal council passes security issuing resolution and agreement (municipal borrowing only)
  9. Regional district drafts security issuing bylaw and board gives it three readings and adoption
  10. Challenge period for security issuing bylaw (10 days)
  11. Provincial review of the security issuing bylaw and certificate of approval by the Inspector of Municipalities (2-4 weeks)
  12. Security issuing by the Municipal Finance Authority

The Municipal Finance Authority lays out the borrowing process in a flowchart:

Provincial Statutory Approval

The first step in the provincial review process is statutory approval of the local government loan authorization bylaw. Once a loan authorization bylaw is given three readings, a signed, certified copy of the bylaw at third reading, along with all required supporting information is emailed to the provincial government. Staff review the bylaw for legislative compliance and financial viability. Once the initial review is complete, the bylaw is sent to the Inspector of Municipalities for final approval and issuance of a statutory approval certificate. If a regional district loan authorization bylaw is accompanying a new or amended service establishing bylaw, these would be submitted to the provincial government together.

Content of Loan Authorization Bylaw

All loan authorization bylaws must contain the following:

  • The total amount to be borrowed
  • Each of the purposes for the debt
  • The amount allocated to each purpose (if there is more than one)
  • The maximum debenture term
  • The service to which the loan relates (regional districts only)

Sample Bylaws

Supporting Information

To assist the Inspector of Municipalities’ approval decision, ministry staff need the following information to support their review of a local government loan authorization bylaw:

  • Financial Plan: Provide evidence that capital and operating components of the project are or will be included in the adopted five-year financial plan.
  • Capital Budget: Include a capital budget that indicates that engineering and contingency costs have been factored into the capital cost.
  • Other Funding Sources: Specify sources of funding to be used for financing the project, including taxes, fees and grants. Unconfirmed grants may not be used as other funding sources.
  • Cost Recovery: Indicate the method(s) of cost recovery that will be used and the impact on an average residential property, or the impact as a rate per $1,000 of assessment.
  • Tax Impact: If the borrowing results in a substantial tax impact to properties, provide information on consultation or notice given to the electors.
  • Assessment breakdown: Provide the assessed values of the properties if the loan is for a municipal local area service or a regional district service area that is a portion of a municipality or electoral area.
  • Background Information: Provide any staff, consultant or engineering reports that provide background information.
  • Method of Participating Area Approval or Approval of the Electors: Indicate the method of approval. If consent is being used for a regional district service or loan, include the consents with the statutory approval application. If a petition is being used include a certificate of sufficiency signed by the Corporate Officer and a copy of the petition. If approval of the electors is being used, indicate whether it is the alternative approval process or assent voting and when council or the board would like to conduct these. If approval is not required, specify why it is not required.

Additional Requirement for Municipalities

Municipalities seeking approval of a loan authorization bylaw are also required to submit to provincial staff a liability servicing limit certificate that contains new and discharged debt since the end of the relevant fiscal year.

Information needed to fill out lines "a" through "c" of the certificate is archived online:

Exemption from Approval of the Electors or Participating Area Approval

Approval of the electors for municipalities is not required if the borrowing is for any of the following:

Participating area approval for regional districts is not required if the borrowing is for any of the following:

  • Borrowing money for borrowings for court and arbitration requirements
  • Paying compensation for property expropriated or land injured from entry on land to mitigate damage
  • Borrowing money for works carried out under an order of the Inspector of Dikes or an order under the Environmental Management Act
  • Preparing or implementing a waste management plan that has been requested by, or approved by, the minister responsible for the Environmental Management Act

Provincial Certificate of Approval

A local government may apply for a provincial certificate of approval for its loan authorization bylaw after all of the following have been met:

  • The bylaw has received provincial statutory approval
  • Participating area approval or approval of the electors has been obtained(if applicable)
  • The bylaw has been adopted by the local government
  • The one month challenge period has passed

A certificate of approval certifies that the bylaw meets statutory procedural and other requirements. The certificate of approval provides lending institutions like the Municipal Finance Authority assurance that the bylaw cannot be challenged for failing to comply with legislative procedural requirements.

To apply for a certificate of approval, a signed, certified adopted copy of the bylaw; a copy of the notice of assent voting or the alternative approval process (if applicable); and a completed corporate officer's certificate must be emailed to:

A copy of the corporate officer's certificate to be filled out by the local government is mailed with the provincial statutory approval. An online version is also available from the Municipal Finance Authority.

Security Issuing

Once a loan authorization bylaw has received a provincial certificate of approval, the local government may undertake temporary borrowing to finance the construction and development of a capital project, or the local government may proceed directly to long-term debenture debt through a regional district security issuing bylaw.

Municipalities with approved loan authorization bylaws must request that their regional district undertake borrowing on their behalf by forwarding to the regional district a municipal security issuing resolution.

Regional districts submit security issuing bylaws to the Inspector of Municipalities for a certificate of approval before the bylaw and all supporting material proceeds to the Municipal Finance Authority for security issuing.

Amendments and Repeals

Loan authorization bylaws may be amended or repealed by following the steps in section 179 of the Community Charter for municipalities or section 349 of the Local Government Act for regional districts.

Once a loan has gone to security issuing, it may be difficult to amend or repeal the loan authorization bylaw. Please contact the Municipal Finance Authority and the Ministry of Municipal Affairs and Housing to discuss further.