How should Lunenburg pay for the work ahead?

Lunenburg has expensive work ahead, including electric, wastewater, water, stormwater, roads, and public buildings.

Its latest audit shows that the Town still has room to make choices. For the year ended March 31, 2025, the auditor issued a clean opinion. The Town reported $16.6 million in financial assets, $8.5 million in financial liabilities, and $8.1 million in net financial assets. It also reported $12.6 million in reserve funds and $2.9 million in long-term debt, plus about $693,000 in temporary borrowing.

Those figures show a positive current financial position. They do not tell residents whether every project in the next ten years is affordable at the same time. A clean audit looks backward; the infrastructure plans look ahead.

The more useful question is how much room the Town has to make choices, and what could reduce that room.

What the audit says

The 2025 audited statements consolidate the Town's general operations with its electric and water utilities. The auditor said the statements present the Town's financial position fairly in all material respects under Canadian public-sector accounting standards.

The statement of financial position reports $13.1 million in cash. That is not an unassigned chequing account. Municipal cash supports utility operations, capital projects, restricted or designated reserves, payables, grant-funded work, and other obligations.

The $12.6 million reserve figure needs the same caution. A capital reserve can be used only for defined capital and debt purposes under Nova Scotia's Municipal Government Act. Other reserves may be assigned to utilities or specific future work.

Municipal accounts need to be read by purpose rather than treating every large number as money available for any project.

Where the pressure is visible

The Town has already approved a five-year electric capital plan totalling $20.987 million. It includes feeder upgrades and a new substation, work that should be tied to where the utility upgrades can support new housing.

The Town is also proceeding with a major Wastewater Treatment Plant upgrade. The approved 2026/27 capital budgets include $3.815 million for Town-general projects and $777,000 for the water utility. The general total covers roads, buildings, wastewater, stormwater, equipment, accessibility, and other work; it is separate from the major wastewater plant project and electric plan.

In January 2026, staff told Council that current savings were not keeping pace with the expected cost of large infrastructure projects. Council later approved an operating budget that included a $135,000 contribution toward future infrastructure and the first property-tax rate increase since 2021/22.

The approved residential rate is $1.455 per $100 of assessment, up 7.9 cents, or 5.7 per cent. The commercial rate is $3.479, up 12.1 cents, or 3.6 per cent. The residential sewer rate rose 2.1 per cent, from $735.38 to $750.82 per dwelling.

A tax or rate increase does not prove financial failure. It shows that services and capital work have to be paid for. Residents should be able to see the connection between the increase, the project, and the expected service improvement.

How municipalities finance capital work

Nova Scotia municipalities do not operate like ordinary companies. The legal tools and safeguards are different.

The Municipal Government Act requires a municipality to include the preceding year's deficit in its current estimates. It requires a capital reserve fund and limits how withdrawals can be used. Municipal borrowing is subject to provincial rules and approval, and the Minister can set borrowing limits.

The Province's municipal financing guidance says long-term borrowing is reviewed against factors such as the municipality's ability to service debt.

In practice, a large project can use several sources: current revenue, utility rates, reserves, debt, development charges or contributions, and federal or provincial grants. The mix matters.

Debt can be sensible when a long-lived asset will serve residents for decades. Using all available reserve money can be risky if it leaves no room for the next failure. Delaying work can also be expensive when a pipe, roof, or electrical system keeps deteriorating.

There is no single safe number that answers every decision.

How a town loses flexibility

Financial pressure becomes more serious when several habits compound:

• maintenance is delayed until a repair becomes an emergency;
• grants are treated as certain before they are approved;
• recurring operating revenue is used for work that keeps growing;
• reserves lack a clear target tied to asset condition;
• debt is added without showing future principal and interest costs;
• utility upgrades move ahead without a rate forecast; or
• public land is sold mainly to close a short-term budget gap.

Growth is not an automatic cure. New housing can add assessment and utility customers, but it can also require roads, pipes, parks, waste collection, emergency service, and maintenance. A useful fiscal review should compare the expected revenue with the full life-cycle cost.

That is one reason the Town needs more than the housing argument in the housing fight Lunenburg keeps losing. It also needs a costed service plan. The same rule applies to public projects such as a future Blockhouse Hill plan.

The opposite choice has costs too. A shrinking or older population can leave fewer households and businesses carrying the systems a historic town still needs.

Bring the public reports together

Residents can already find the annual budget, capital budgets, audited statements, and the province's Municipal Indicators report on the Town website. The latest indicators report rates Lunenburg's overall financial condition as low risk.

Those documents provide a financial snapshot, but they do not bring the long-term infrastructure plan together in one place. A plain-language table could show:

• the major asset or system and its condition;
• the next required project and expected year;
• the current cost estimate and contingency;
• the portion expected from taxes, rates, reserves, debt, grants, or developers;
• annual debt-service and utility-rate effects; and
• what happens if the project is delayed.

The figures will change as designs improve and tenders arrive. Publishing the assumptions would still let residents understand why the order changed.

Lunenburg's 2025 audit shows a positive financial position. Large obligations can still narrow Council's choices if the Town does not explain their order and funding before the bills arrive.

Smaller operating choices matter too. The debate over parking in Lunenburg is a useful example of why a Town-wide service should be measured and managed rather than left to individual project fights.