Acts and Regulations

M-20 - Municipal Capital Borrowing Act

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Current to 13 December 2023
CHAPTER M-20
Municipal Capital Borrowing Act
Definitions
1In this Act
“Board” means the Municipal Capital Borrowing Board;(Commission)
“clerk” means a clerk as defined in subsection 1(1) of the Local Governance Act;(greffier)
“council” means the council of a municipality;(conseil)
“councillor” means a councillor of a municipality;(conseiller)
“debenture” means a debenture of a municipality;(débenture)
“loan” Repealed: 1985, c.35, s.1
“mayor” means the mayor of a municipality;(maire)
“Minister” means the Minister of Local Government and includes any person designated by the Minister to act on the Minister’s behalf;(Ministre)
“municipality” means a local government as defined in subsection 1(1) of the Local Governance Act.(municipalité)
1963 (2nd Sess.), c.8, s.1; 1966, c.157, s.1; 1985, c.35, s.1; 1992, c.61, s.1; 1998, c.41, s.73; 2000, c.26, s.201; 2001, c.15, s.5; 2006, c.16, s.116; 2012, c.39, s.92; 2017, c.20, s.106; 2020, c.25, s.75; 2023, c.40, s.23
Where municipality deemed to be borrowing money
1.1For the purpose of this Act, where a municipality enters into a leasing, lease-purchase or purchase arrangement under the circumstances or on the terms or conditions prescribed by regulation, the municipality shall be deemed to be borrowing money for capital expenses whether or not the municipality has obtained any money by way of a loan.
1983, c.54, s.1
Appointment of the Municipal Capital Borrowing Board, regulations
2(1)The Lieutenant-Governor in Council may appoint a Municipal Capital Borrowing Board, consisting of not fewer than three nor more than six members, one of whom shall be designated as chairman, one as vice-chairman and another as secretary.
2(2)Repealed: 1983, c.54, s.2
2(3)The Lieutenant-Governor in Council may make regulations
(a) Repealed: 1983, c.54, s.2
(b) prescribing the duties of the Secretary of the Board;
(b.1) respecting the circumstances, terms or conditions under which a municipality which enters into a leasing, lease-purchase or purchase arrangement shall be deemed to be borrowing money for capital expenses; and
(c) for the necessary and efficient enforcement of the Act.
1963 (2nd Sess.), c.8, s.2; 1969, c.57, s.1; 1978, c.40, s.1; 1983, c.54, s.2
Administration
3The Minister is charged with the general administration of this Act.
1964, c.44, s.1; 1986, c.8, s.79; 1989, c.55, s.35; 1992, c.2, s.36; 1992, c.61, s.2
Powers of Board, debentures, borrowing
4(1)The Board may authorize a municipality to obtain money for a capital expense either by way of a loan or by the issue of debentures or guarantee the repayment of any loan or issue of debentures made for a capital expense.
4(1.1)The Board may, in respect of an application by a municipality for authorization under this Act, investigate
(a) the nature of the capital expense in respect of which the application is made,
(b) the necessity of the capital expense,
(c) the financial position of the municipality, and
(d) such other matters as the Board considers necessary.
4(1.2)The Board may, in respect of an application by a municipality for authorization under this Act, require the municipality to provide to the Board such information in respect of the application as the Board considers appropriate.
4(1.3)The Board may, in respect of an application by a municipality for authorization under this Act, require the municipality to make public, in such manner as the Board considers appropriate, information concerning
(a) the total cost of the capital facility with respect to which the amount to be borrowed is to be expended,
(b) any operating expenses to be associated with such capital facility,
(c) any increase in taxes or any user charges associated with any facility with respect to which any portion of the amount to be borrowed is to be expended, and
(d) any other matter that the Board considers appropriate.
4(1.4)The Board may refuse to consider an application for authorization under this Act where the municipality has not provided the information required by the Board under subsection (1.2) or has not made public the information required by the Board to be made public under subsection (1.3).
4(1.5)The Board may reject an application by a municipality where, in the opinion of the Board,
(a) the amount of money to be borrowed will impose an excessive financial burden on that municipality, notwithstanding that it does not exceed the restriction imposed under section 89 of the Municipalities Act,
(b) the purpose for which the money is to be borrowed is inconsistent with any Act or regulation in force in the Province or any by-law of the municipality, or
(c) the application is, for any other reason, unsuitable for authorization under this Act.
4(2)Where under this Act or any other Act, power is conferred upon a municipality to issue debentures, it includes pending the issue and sale of debentures, the power to agree with a bank or person for temporary advances from time to time, not exceeding in the aggregate the respective amounts for which debentures may be issued, as may be deemed necessary to carry out the purposes for which the issue of debentures is authorized, at a rate of interest not to exceed the rate approved by the Board upon an application for authorization under this Act, or the rate established in accordance with the other Act, and such temporary advances shall be repaid out of the proceeds of the sale of such debentures.
4(3)Subject to subsection (5), an authorization granted by the Board under subsection (1) is subject to the approval of the Minister.
4(4)Notwithstanding any other provision of this Act, where a municipality borrows money in excess of that authorized under this Act or approved by the Minister, the Lieutenant-Governor in Council may approve the borrowing, but in such case the Lieutenant-Governor in Council may require the excess amount of money borrowed to be repaid by the municipality on a user charge basis or by the levy of tax in respect thereof under such conditions as the Lieutenant-Governor in Council determines.
4(5)Notwithstanding subsection (3), the Board may upon the request of a municipality authorize the municipality to borrow an amount not exceeding ten thousand dollars for a capital expense if, in the opinion of the Board, an emergency exists.
4(5.1)The Minister shall submit annually to the Treasury Board a report respecting authorizations approved by the Minister under subsection (3).
1963 (2nd Sess.), c.8, s.3; 1964, c.44, s.2; 1975, c.88, s.1; 1979, c.46, s.1; 1980, c.35, s.1; 1983, c.54, s.3; 1984, c.8, s.1; 1992, c.61, s.3; 2016, c.37, s.113
Issuance of debentures, interest respecting debentures
5(1)Where under this Act or any other Act, a municipality
(a) has issued debentures partly in serial form and partly for a fixed term, and
(b) is authorized to refund the fixed term debentures on maturity by the issue of debentures in serial form maturing annually over the balance of the term originally authorized,
and if
(c) the municipality satisfies the Board that it can advantageously refund the whole or any part of the fixed term debentures on maturity by the issue of debentures at a discount,
the Board may authorize the municipality to issue debentures in such amount as is necessary for the refunding, discount on sale of debentures and cost of issuing same.
5(2)Where a municipality is authorized under this or any other public or private Act to obtain money by way of loan or by the issue of debentures at a specified rate of interest or at a rate of interest not exceeding a specified rate, the Board may authorize the municipality to obtain such loan or issue such debentures at a rate of interest higher than the specified rate.
1964, c.44, s.3; 1967, c.55, s.1; 1970, c.36, s.1; 1983, c.54, s.4
Authorization of municipal financing
6(1)Except as provided in this Act, every municipality, before obtaining money for a capital expense either by way of a loan or by the issue of debentures, or before guaranteeing the repayment of any loan or issue of debentures made for a capital expense, shall obtain the authorization in writing of the Board so to do.
6(2)This section does not apply to the City of Saint John.
1963 (2nd Sess.), c.8, s.4
Approval by municipal council
7No application shall be made by a municipality to the Board for authorization to obtain money by way of a loan or by the issue of debentures or to guarantee the repayment of any loan or issue of debentures unless such loan, issue of debentures or guarantee of repayment of any loan or issue of debentures is authorized by the council.
1963 (2nd Sess.), c.8, s.5; 1966, c.157, s.2
Repealed
8Repealed: 1983, c.54, s.5
1963 (2nd Sess.), c.8, s.6; 1969, c.57, s.2; 1983, c.54, s.5
Issuance and sale of debentures
9(1)Subject to the approval of the Board, the council of a municipality, or its duly authorized representative, may issue and sell debentures.
9(2)Repealed: 1983, c.54, s.6
1963 (2nd Sess.), c.8, s.7; 1964, c.44, s.6; 1969, c.57, s.3; 1983, c.54, s.6
Lapse of authorization of municipal financing
10The authorization of the Board for a proposed loan, issue of debentures or guarantee of repayment of any loan or issue of debentures shall lapse and be of no further effect
(a) as to any amount by which the amount authorized exceeds the cost to the municipality of the project for which the loan, issue of debentures or guarantee of repayment was authorized, and for this purpose the cost to the municipality shall be
(i) the cost of the project, when completed, less
(ii) the amount of any federal, provincial and other grants received by the municipality for the project; or
(b) as to the whole amount authorized, if the project for which the loan, issue of debentures or guarantee of repayment was authorized has not been commenced within two years from the date of the authorization.
1963 (2nd Sess.), c.8, s.8; 1980, c.35, s.2
Offences and penalties
11(1)Every councillor, mayor or clerk who moves, seconds, puts or supports by his vote any motion, resolution or proposal that if carried out would have the effect of diverting money obtained pursuant to this Act or any part thereof, to any purpose other than that for which it is borrowed, commits an offence punishable under Part II of the Provincial Offences Procedure Act as a category E offence.
11(2)This section does not apply if money is diverted to a purpose other than that for which it is obtained when such diversion is made with the approval of the Board.
1963 (2nd Sess.), c.8, s.9; 1990, c.61, s.85; 2017, c.20, s.106
Agreement respecting sewage treatment project
12(1)Notwithstanding the Municipal Debentures Act, where by any Act of the Legislature authority has been granted to a municipality to issue debentures, part of which is to be used for the financing of a sewage treatment project, that part of the borrowing may be repaid in accordance with such agreement as may be entered into between a municipality and the Central Mortgage and Housing Corporation.
12(2)For the purposes of this section, “sewage treatment project” means a sewage treatment project as defined in Part VIII of the National Housing Act, chapter N-10 of the Revised Statutes of Canada, 1970.
1963 (2nd Sess.), c.8, s.10; 1964, c.44, s.7; 1969, c.57, s.4
Debenture authorized by Act of the Legislature
13Every debenture issued in accordance with this Act is deemed to be a debenture authorized by Act of the Legislature.
1963 (2nd Sess.), c.8, s.11
Application to corporations and commissions under the Clean Environment Act
14(1)This Act applies mutatis mutandis to every water or wastewater commission constituted or continued under section 15.2 of the Clean Environment Act in respect of its obtaining money for a capital expense by way of a loan or the issue of debentures, unless the repayment of the loan or issue of debentures has been guaranteed by a municipality and such guarantee has been authorized under this Act.
14(2)For the purposes of subsection (1),
(a) the word “municipality”, when used in sections 1, 4, 5, 6, 10 and 12, and
(b) the word “council” when used in section 8,
shall be read to include a corporation referred to in subsection (1) of this section, and the word “councillor” when used in subsection 11(1) shall be read to include a member of the board of a corporation referred to in subsection (1) of this section.
14(3)This Act applies mutatis mutandis to every regional service commission established under the Regional Service Delivery Act in respect of its obtaining money for a capital expense by way of a loan or the issue of debentures.
14(4)For the purpose of subsection (3)
(a) the word “municipality”, when used in sections 1, 4, 5, 6, 10 and 12, and
(b) the word “council” when used in section 8,
shall be read to include a regional service commission referred to in subsection (3) and the word “councillor” when used in subsection 11(1) shall be read to include a member of the Board of a regional service commission referred to in subsection (3).
1982, c.41, s.1; 1994, c.91, s.7; 2012, c.32, s.8; 2012, c.44, s.10
Repealed
15Repealed: 2017, c.20, s.106
2005, c.7, s.45; 2017, c.20, s.106
N.B. This Act is consolidated to December 13, 2023.