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The Federation of Canadian Municipalities estimates that cities, towns and smaller local administrations own and operate roughly 60 per cent of Canada’s core public infrastructure, including roads, bridges, waterworks, electrical distribution networks, transit and community facilities. Given that Canada’s infrastructure shortfall would cost hundreds of billions of dollars to fix, municipalities are in a precarious position. They are being asked to shoulder more of the nation’s building burden while having fewer tools to pay for it. A stronger municipal bond market could bridge that gap.

Data on the size of Canada’s municipal bond market is limited. A 2018 Fiera Capital report estimated that the market held just over $61 billion in outstanding municipal debt at the end of 2017. By comparison, a 2025 RBC report estimated roughly $53.2 billion in outstanding bonds, excluding Quebec municipal auction issuers, whose debt is often unrated. The same RBC report estimated that municipalities issued $5.8 billion in new debt in 2024. By contrast, the United States had approximately C$6 trillion in outstanding municipal bonds as of the second quarter of 2025.

While debt is often viewed negatively, municipal bonds are typically used to finance long-term infrastructure projects such as roads, transit and utilities. A larger municipal bond market can therefore give municipalities greater access to long-term financing for projects that support economic growth and public services.

Municipalities own the infrastructure but lack the revenue

Why is there a need to grow the municipal bond market in Canada? For one, municipalities have very few sources of revenue. Property taxes account for nearly 50 per cent. Roughly another 20 per cent comes in........

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