EDMONTON- Edmonton’s three mayoral candidates have been put to the test when it comes to our city’s debt.
Global News asked Karen Leibovici, Kerry Diotte and Don Iveson the same three questions. The questions and the current councillors’ responses are below.
Question 1: Outside of the arena and drainage, what is the most expensive item the City has used debt to finance?
Leibovici– “That would be the south LRT.”
Diotte– “I would suspect it’s the LRT expansion to the University and beyond.”
Iveson– “The south LRT extension.”
Answer: All three candidates answered correctly.
Question 2: At the end of 2014 what will be the City’s projected debt?
Leibovici– “We’re at $2.2 billion now and if you add in the arena and some of those others, I’d say over $3 billion.”
Diotte– “It’s now changed to be $2.9 billion at the end of 2014.”
Iveson– “The projected debt for the end of 2014 is $2.94 billion.”
Answer: All three candidates answered correctly. The City’s debt is expected to reach about $2.9 billion by the end of 2014.
Question 3: What is the credit rating for the City from the Agency Standard and Poor’s?
Leibovici– “We’re at the top, it’s triple A.”
Diotte– “I would surmise it’s probably triple A.”
Iveson– “I think it’s double A.”
Answer: All three candidates answered incorrectly. The City’s credit rating is double A plus.
Edmonton’s debt has quickly become a hot topic. Diotte has been particularly vocal about it, adopting the slogan “Diotte or Detroit.”
“It’s a completely false comparison. Detroit is contracting, Edmonton is growing ambitiously. Detroit didn’t have a plan to pay back their borrowing, we have a plan to pay back every scrap of borrowing that we’ve done. Detroit was using debt to fund their operations, to buy the groceries, if you will, and we only use it buy assets,” Iveson explained.
Leibovici believes the slogan is irresponsible.
“The reality is is that we’re not like Detroit. We could never be like Detroit. And, again, our debt is being handled responsibly.”
And while Diotte says he know’s Edmonton is not in the same situation as Detroit, he says the slogan has got residents talking.
“If people are talking about the debt because of that Diotte or Detroit slogan, so be it. That’s great,” he said. “Let’s be realistic, we are not Detroit. But Detroit is a wake up call to fiscal accountability for any city.”
When it comes to taking on debt, Leibovici says it’s okay, and long as it’s done responsibly. She also says the City’s current debt is well-managed.
“I think that others who say that it’s not and that debt is out of control are actually doing a disservice. Because if there is that thinking, that our debt is out of control, then the question is what should we cut back on?” she wondered. “Should we stop building recreation centres? Should we not fix the Walterdale Bridge?”
“I think the City has used, and this council has really used debt responsibly to build projects that are important to Edmontonians, like the south LRT, drainage upgrades, recreation centres and libraries. Things that we would not have built without debt,” Iveson added.
Diotte believes the City needs to go through the current projects and decipher which are wanted and which are actually needed.
“Despite that debt, we still see our roads are abysmal, we can’t afford to go ahead with the LRT, we can’t afford to go ahead with the Yellowhead project, we still have to find money for drainage projects.”
When it comes down to it, the mayor is just one chair on the City’s 13-member council. And whichever candidate is elected this October will have to convince at least six other people that his or her policy is the direction to take for the next four years.
With files from Vinesh Pratap, Global News.