The Toronto government debt is the amount of money the municipal government of Toronto borrowed to finance capital expenditures. Under the City of Toronto Act, the Toronto government cannot run a deficit for its annual operating budget. In addition, City Council has set the limit of debt charges not to exceed 15% of the property tax revenues. As of the end of 2012, the total debt stood at CDN$3.7 billion.
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Debt breakdown
Toronto government's debt consists of debentures or municipal bonds issued through the markets at rates advised by the "syndicate". They are purchased by institutional investors and private investors. Majority of the debt is domestic and held in Canadian currency.
Causes of debt
As a rapidly growing and aging city, Toronto is facing an infrastructure crisis. Congestion, aging sanitation and water systems, repair backlog and other infrastructure shortcomings necessitated increased capital investments. $4.10 billion of the $14.84 billion Toronto's 2012-2021 Capital Budget is financed using debt. The majority of the investment will be in transportation.