Debt limits are provincial regulations that restrict how much municipalities can borrow, designed to ensure local governments maintain financial sustainability. These limits vary by province but typically cap borrowing based on factors like annual debt servicing costs as a percentage of revenues (often 25%), total debt as a percentage of assessment or revenue, or specific dollar amounts. Some provinces require provincial approval for any borrowing above certain thresholds. Debt limits protect taxpayers from excessive obligations, maintain municipal credit ratings, and ensure cities can continue providing services without being overwhelmed by debt payments. Municipalities approaching their debt limits must either defer capital projects, find alternative funding sources, or increase revenues. The limits create discipline but can also constrain investment in needed infrastructure.