Chelsea over $52M in debt

Chelsea’s debt is complicated.

Chelsea’s total debt is a combination of three different debts, but Chelsea finance director Céline Gauthier said those debts shouldn't be bundled together.

Chelsea’s at-large debt is $32.5 million; its sector debt is $17.11 million, and its government debt is $2.8 million, according to Gauthier. Those different debts total around $52.5 million.

At-large debt is paid by all Chelsea taxpayers regardless of where their home or business is.

Sector debt is paid by taxpayers who have a home or business in the sector where a service is located – for example, the centre village sewer and water system project is a sector debt. Sector debt is paid for by taxpayers who use that service.

Confusingly, the government debt isn’t money owed by the municipality at all. It’s more like grant money Quebec owes Chelsea that the province pays back over 10 to 20 years, Gauthier explained.

And higher debt doesn’t mean higher taxes.

“Even if the debt is higher, it doesn’t cost residents more,” she said. “Because we have more people to pay.”

In 2021 Chelsea paid about $4.34 million total toward paying off the different debts, Gauthier said.

“We are in a good financial situation,” she said. “We’re not worried about our future.”

Debt isn’t necessarily a bad thing for a municipality to have, Gauthier said.

“There is a difference between going into debt to enable economic growth and generate new revenue, versus going into debt to maintain infrastructure without necessarily bringing additional revenue to the municipality,” she said, explaining that Chelsea is doing the former.

Investing in things such as roads and water systems draws more taxpayers, since – as the argument goes – people want to live where there are good roads and municipal services.

Chelsea has done major projects in recent years. One of the largest was the centre village’s $23 million water and sewer system in 2017. And it’s only got a couple large projects left; Gauthier said those are the Meech Lake Road and River Road projects.

Road projects are added to the at-large debt, Gauthier added.

“Without the additional revenues generated by new developments, the municipality would not have been able to invest as much in its road and active transportation infrastructure because the residents would not have been able to afford the additional costs,” she explained.

River Road will cost an estimated $13.2 million to fix and Meech Lake Road will be fixed in three sections, which will cost upwards of $16 million. These repairs are expected to take place over the next few years.

Meanwhile roads in other municipalities of the Gatineau Hills fall into disrepair.

“It’s dangerous to compare [debts with] other municipalities,” Gauthier said.

Even though neighbouring municipalities may have less debt – for example, La Pêche had $9,965,055 in long-term debt in December 2020 according to the latest numbers available – Gauthier said that they may also have a lot of deferred maintenance on roads or services that need building or expanding for growing populations.

“We can’t compare to municipalities around us because we’re not the same. Some may not have debt, but they haven’t done large, necessary projects,” Gauthier said. “We’ve almost finished [big projects], but they have yet to start.”

Chelsea reports the debt yearly through finance reports that are usually tabled by council in June and published online. Usually these reports are only current up until the final day of the previous year, so they’re like a six-month-old snapshot of the municipality’s finances.

Gauthier said that the municipality is currently preparing a presentation to explain the debt and its repayment to residents. She said it will be made public around June.