British Columbia

Mislabelling Surrey's debt load 'mystifies' political expert

The mayor of Surrey’s over-estimation of the city's current debt load has perplexed political scientists, leaving some wondering if it’s a political ploy gone wrong.

Mayor Doug McCallum says the city's debt is $514 million, latest financial report puts it at half that

Mayor Doug McCallum's overstatement of Surrey's debt is raising questions. (CBC)

A City of Surrey statement that paints a grim picture of its current debt load has perplexed political scientists, leaving some wondering if it's a political ploy gone wrong.

Surrey Mayor Doug McCallum sent out a press release this week indicating that the new government would take immediate steps to slash Surrey's growing debt of $514 million.

But according to the city's financial report from December 2017, the debt load is about half —  $267 million.

"It suggests to me that McCallum wasn't up on the fiscal situation of the city," said Hamish Telford, an associate professor of political science at the University of the Fraser Valley.

In a news release Tuesday, McCallum said he was "shaken to the core" by the level of Surrey's debt and described the $514 million as "simply untenable and frankly, irresponsible" .

The city later clarified in a statement that "the $514 million figure is the projected debt that the city would incur under the current 2018-2022 Five Year Financial Plan ... if it was allowed to proceed to completion."

McCallum has promised to build a SkyTrain rather than light rail transit depicted in this image, at left. (TransLink)

Unusual tactic

Decrying the financial situation a newly elected government inherited from a previous one is a common tactic to gain leverage with voters, Telford said, but unusual to see at the municipal level.

"We often hear this at the federal and provincial levels," he told Stephen Quinn, the host of CBC's The Early Edition.

"The new government comes in and says 'Oh, that the previous government was concealing the true fiscal situation with creative accounting practices.' "

But Surrey isn't following the typical political script.

"Usually, new governments that do that have come into power with an agenda to cut costs," said Telford.

McCallum, on the other hand, was elected in October on two key spending promises: to build a SkyTrain and to replace the RCMP with a municipal police force.

"He came in with plans to spend more rather than less so it's a little bit curious that he's decrying the fiscal situation of his own city," Telford said.

McCallum has also promised to replace the RCMP with a municipal police force. (CBC)

Why overstate debt?

Telford said he finds the whole situation "a bit mystifying" and doesn't understand why McCallum would overstate the city's debt and pretend that it's something new when, in fact, the financial figures have been publicly available since 2017.

"Maybe he's trying to tamp down expectations that perhaps they won't be able to fulfil these promises as quickly as first anticipated," Telford speculated.

"Maybe this is a prelude to cutting other services and other plans in order facilitate these new promises to bring in municipal police force and and SkyTrain."

Existing laws don't allow municipal governments to incur operating debt. They can borrow money for capital development and capital projects, but are tightly regulated by the province.

Surrey is currently at about 20 per cent of its borrowing capacity, Telford said, which is "well within reason."

McCallum declined an interview with CBC.

The Early Edition