St. Thomas has pulled several years of separate studies and agreements into one report showing how it plans to pay for the last piece of its biggest project ever.
Yarmouth Yards is the industrial park built around the PowerCo battery plant, and it is expected to cost about $1 billion in total once every road, water main and sewer line is in the ground. The city has already lined up $833 million of that from outside sources, provincial and private-sector deals negotiated over the past several years. Tonight, City Treasurer Adam Boylan is bringing council a report on the last big piece: the Dalewood Water Reclamation Facility, a new wastewater treatment plant expected to cost about $440 million and be finished around 2030.
Until Dalewood is ready, wastewater from Yarmouth Yards industries will flow to the existing Sunset Drive plant instead, so production at the site does not have to wait on the new facility.
The city expects to have about $273 million available to put toward Dalewood as construction proceeds. For the rest, roughly $167 million, the report says the city plans to borrow. That number could climb to about $216 million if an expected sale of Yarmouth Yards land does not happen before the city needs to borrow.
Here is how the timeline works. The city plans to spend its own money first and hold off borrowing as long as it can. Short-term borrowing would start in 2028, once that funding runs out, adding up to about $7 million in interest by the time the plant opens in 2030. After that, the short-term debt converts into a long-term loan. Assuming a 30-year term at an assumed 4 percent interest rate, based on early conversations with lenders, St. Thomas would owe about $9.7 million a year starting in 2031.
Staff’s forecast says residents should not feel this in their tax bill or their water rate. That yearly payment would come mainly from development charges and money owed to the city under an agreement with Central Elgin, though staff say those two sources will not cover the full $9.7 million on their own, so a share of the new revenue the Yarmouth Yards industries themselves generate has to be redirected toward the debt payment in the meantime. Staff also stress-tested the plan against rougher scenarios: slower-than-expected development, a lot less wastewater than industries are expected to produce, a 10 percent jump in construction costs, higher interest rates, even a third less industrial building than planned. Staff say the plan held up in most of those scenarios, though the financial cushion left over shrinks considerably in the toughest cases.
One thing is still unsettled: exactly how the city borrows the money. Staff explored the idea with banks and public infrastructure lenders, including the Canada Infrastructure Bank, the Building Ontario Fund, and five commercial banks (TD, RBC, CIBC, BMO and Scotiabank), testing their appetite for a couple of different setups. One option would have St. Thomas borrow directly, using its full financial standing as security. The other would set up a separate, city-owned corporation just to own and finance the project. Lenders were split on which they preferred, so for now staff are basing the plan on the city borrowing directly, while those conversations continue. Staff say a recommended structure will come back to council as talks with lenders progress.
Report TR-20-26 is going to council for information only tonight, not a vote to approve the borrowing itself. Staff say they will keep reporting back as the financing plan, and the lenders willing to back it, come into focus.
Earlier coverage: St. Thomas Is Building Its Longest Rail Yard Yet, Right Next to the PowerCo Plant and South Edgeware Road Is Getting Rebuilt, and a New Sewer Line Is the Real Reason Why
Sources: City of St. Thomas Council agenda, August 10, 2026 (Report TR-20-26, Yarmouth Yards Financial Plan)
By Anthony Zruna · About the LocVox Newsroom
