Does Oakville Really Have a “AAA” Credit Rating?

A Mayoral Candidate's Perspective

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Does Oakville Really Have a “AAA” Credit Rating?
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About the Author

John McLaughlin

John McLaughlin

John McLaughlin is a Senior lawyer with over 20 years of experience in areas including Tax Law, Corporate/Commercial Law, Litigation, Tort Law, Securities Law and Employment Law. John has appeared before, or worked on files, at all levels of courts in Canada including the Supreme Court of Canada. He was also a Mayoral candidate in the 2014 Oakville Municipal Election receiving 24% of the vote.

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While the “Oakville Beaver” buoyantly endorsed Mr. Burton in this election – the wisdom of such an endorsement is certainly debatable. Mr. Burton was elected in 2006 with only 14% of total eligible voter support – and no Council experience – and was re-elected in 2010 with only 20% of total eligible voter support. Low voter turnout and low support for Mr. Burton has, unfortunately, allowed him to reign unchecked and make all sorts of assertions and claims.

During those intervening 8 years, Mr. Burton and Council went on an unprecedented spending spree raising Oakville’s portion of our property taxes 40% – one of the highest in Canada, increased total budgetary spending 50% (i.e. almost $1 million dollars a day) and borrowed to unprecedented levels, with total enterprise debt approaching $500 million dollars (if Mr. Burton’s $175 million hospital funding debenture proceeds). Those numbers are found in the published Town of Oakville’s Audited Financial Statements from 2006 to present. Unfortunately, in my view, that fiscal record now threatens to bankrupt Oakville’s future – and impair public services.

Faced with these stark numbers, which Linda Nazareth, a renowned economist and Ward 5 Council candidate, recently questioned as “inaccurate” in a well-written article in “Oakville News”, Mr. Burton proclaimed (in the October 17th, 2014 “Oakville Beaver” and during this 2014 election) that Oakville’s “AAA” credit rating from Standard & Poor’s – was better than the City of Toronto and the Province of Ontario. The problem is, Oakville has no such “AAA” credit rating from Standard & Poor’s, a fact confirmed by Standard & Poor’s and the Town of Oakville. It seems that Mr. Burton has forgotten that under the Municipal Act, 2001, Oakville is prohibited from issuing debt as a “lower tier” municipality; Halton Region issues that debt and enjoys a “AAA” credit rating. Also, Mr. Burton doesn’t seem too interested in revealing the total funding costs of the so-called $90 million dollar “local hospital share” – which actually costs up to $175 million dollars over 30 years – as Halton has to borrow those funds from investors.

Oddly enough, Mr. Burton has effectively placed Oakville’s financial future largely in the hands of investors and the very property developers he vowed to “control” and vanquish before the Ontario Municipal Board. However, they now provide the critical funding that “Livable Oakville” apparently requires, unless he plans on more hefty property tax increases – if he is ever re-elected, along with the incumbent Council. Strange bedfellows indeed, because the Mayor’s joint report to Council on August 7th, 2014 reported that Oakville had borrowed to such an extent that it would “restrict the amount of funding available for other projects” at present.

Maybe it’s all just a simple mistake – and perhaps voters need to be extra careful not to repeat that same mistake, such as Mr. Burton’s proclaimed endorsement of the incumbents, calling them the “safest bet” in the October 17th, 2014 edition of the ”Oakville Beaver“. Anne Mulvale, another “non-endorsed” candidate for Council and Regional seat in Ward 5, astutely noted that Mayor Burton’s property tax claims were contradicted by the Town’s posted financial statements and that the voters will best decide on October 27th, which candidates to “endorse”.

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Readers Comments (2)

  1. m. bernardini says:

    Burton and his incumbent cronies keep touting this triple-A rating, but it really means Oakville has less control of their own financial future.

    It’s just something they keep saying over and over again hoping people believe it! Its not even true!

     Reply



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