A debenture is a debt instrument municipalities issue to borrow money for major capital projects like roads, bridges, water systems, and community facilities. When investors purchase debentures, they are essentially lending money to the municipality in exchange for regular interest payments and return of the principal at maturity (typically 10-30 years). Debentures are backed by the municipality's general credit and taxing authority rather than specific assets. Provincial governments regulate municipal borrowing, setting limits and requiring approval for debenture issues. Debenture financing allows municipalities to spread the cost of long-lasting infrastructure over its useful life, so current and future residents who benefit from the assets share the cost. Interest rates on municipal debentures are typically lower than commercial loans due to municipalities' strong credit ratings.