How Windsor is banking on debt to unlock and expedite east end development

CBC

23-06-2025

It's something the southwestern Ontario border city has tried to avoid for many years: building up and carrying high levels of debt.
Windsor's financial strategy has normally been more of a pay-as-you-go model while keeping debt levels low and paying for projects from reserve funding.
The city bucked that trend a few years ago when it spent $49 million to buy land for the NextStar Energy battery factory.
More recently, council gave the green light to take on $33 million worth of debt for the neighbouring Banwell Road corridor and E.C. Row Expressway overpass projects. They are currently paused after the discovery of endangered gartersnakes.
Aside from the notable flyover, the projects also include another roundabout, widening a stretch of Banwell, extending Wyandotte Street and improving the intersection of Banwell Road at McNorton Street. The province is kicking in nearly $70 million of the overall roughly $110 million total price tag.
The shift in financial strategy is intended to keep up with the rapid growth in that area, according to the city's treasurer and commissioner of finance.
Ultimately, says Janice Guthrie, the projects will be mainly funded through future building development charges to offset the cost for service.
"Now that growth will come, and that growth will pay for the infrastructure services needed in order to expand — but we need the cash now, we need to contract [out], we need to get shovels in the ground," she said.
Two-pronged financial approach
Guthrie says the two-pronged debt strategy starts with a first step of securing construction financing.
"The interest will be paid for by existing development charges."
Short-term borrowing will take place while construction is underway.
When the projects are complete, the city will reassess where it stands with new development and anticipated revenue coming in from the growth it's seen.
The second phase is when the city will determine whether long-term financing is needed for a period of anywhere between 10, 20 or 25 years, according to Guthrie.
"None of this debt will be tax levy funded," she added, meaning existing residents won't be on the hook for having to pay for any of it.
"This debt will be funded from the new growth and development, the expansion, the unlocking of the area on the east side of the city."
'We like to limit our debt'
While it's not new to municipalities, or Windsor, Guthrie says it's something they've tried to avoid.
"We like to limit our debt. We like to make sure that we have the cash in the bank and we have the revenue sources identified before we undertake significant road projects."
Last week, the city highlighted a stable financial outlook. S&P Global Ratings, a credit rating agency, gave the city an AA+ rating, which indicates low risk with a strong capacity to repay debt.
Windsor Mayor Drew Dilkens called it a vote of confidence.
"Even amidst a climate of uncertainty resulting from threat of tariffs and a trade war with the U.S., we are working diligently to leverage all opportunities in support of a robust local economy, and to navigate the unique challenges that come with unprecedented growth and development in our community," he said in a statement.
'Growth pays for growth'
Guthrie says expansion is limited in some areas of the city, including the core, so the east end is one spot they've identified, including Sandwich South for future development.
"You may see a bit of this debt financing coming forward with some of our projects, but we will use it where it makes sense and strategically making sure that we limit the effect on existing residents."
According to Guthrie, the city's building department has informed administration of a "significant" amount of housing that will take place once the road network is available in the Banwell Road corridor.
"Growth pays for growth," she said. "We are very confident that this will attract growth and we will achieve the revenues that we need in order to cover our municipal share of the cost."
East Windsor becoming more dense
Frazier Fathers says east Windsor is rapidly becoming dense.
The local researcher and consultant says as that part of the city continues to sprawl, he has his eyes on other areas like Sandwich South, the Cabana Road and Dougall Avenue corridor, and Tecumseh Road at Walker Road.
"A number of high development corridors and nodes that have been identified … all of the major thoroughfares in the city where they want to see intensification," said Fathers.
"It would be interesting to see how does that come to play as it goes forward."
He also points to projects identified for Huron Church Road, for example, where there could be less truck traffic in the future, as the Gordie Howe bridge opens and gives truckers another option.
"As a result of that, maybe the road condition changes and then it's now more suitable for apartment buildings … rather than just commercial."
Windsor's west side around the new crossing is another area Fathers says could be unlocked for development. But, he points to Ojibway National Urban Park expected to be officially designated at some point this year.
"The area of actual developable land is probably going to be constrained in the west end," said Fathers.
Tecumseh Mayor Gary McNamara says he's appreciative of the large east Windsor road projects around Banwell Road — calling them "timely" — and that they significantly benefit his community and its development.
The neighbouring town has done its own recent construction work on more southerly parts of Banwell at County Road 42.
All of the work is in anticipation of roughly 4,000 residential units being built in the Tecumseh hamlet area over the next several years between the expressway and County Road 42 — across from NextStar.
That, McNamara says, could increase the town's population by about 8,800 people.
"It is timely," he said. "It is certainly appreciative. It's a significant track of land," he said. "This is not going to happen overnight. And the market is going to dictate in exactly at the breadth of speed that it will happen."
While construction has yet to start on the home builds, the mayor says infrastructure work such as sanitary water systems is now underway.