Section 8 - School Board Debt Service Costs
This section details the debt service items that are not part of Core Ed, but which are captured on the School Board Debt Service Costs transfer payment line on Section 1B, item 8.1.2.
Section 8A - Interest on Capital Debt Allocation
This allocation funds interest on debt related to capital construction.
1. Short Term Interest on Capital Component
This component provides short-term capital interest funding for the eligible expenditures under the following capital programs, which are paid to school boards as a capital grant after expenditures are incurred and reported in the Financial Statements and March Report:
- Full Day Kindergarten
- Capital Priorities - Major Capital Programs
- Capital Priorities - Land
- Child Care Capital
- EarlyON Child and Family Centre Capital
- Community Hub Replacement
- School Condition Improvement - Restricted (70%)
- School Condition Improvement - Unrestricted (30%)
TAB: Short Term Interest Details / Report: Section 8A - Short Term Interest on Capital Component - Detail
This tab (and corresponding report) calculates the funded short term interest on capital. The total at item 1, column 9, is forwarded to the main Section 8A report, item 1.
Item 1.1 shows the receivable at year end for each eligible capital program that has not received capital grant payment from the ministry. These values are loaded from Schedule 5.2, column 5. The amounts provide some information on the eligible borrowing for short term interest funding, but actual eligible amounts will vary depending on timing.
For each eligible program, school boards may receive funding for one of the following:
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The imputed internal borrowing interest costs at 1% of the average internal borrowing (items 1.2.1 to 1.2), or
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The lower of the average CORRA for the period of borrowing plus 75 basis points and actual interest cost on external short-term borrowing (items 1.3.1 to 1.3).
Item 1.2.1 (Average Internal Borrowing Related to eligible NPF expenditures): This amount is based on the daily weighted average amount of not permanently financed (NPF) expenditures funded through internal borrowing before receiving grant payment.
An example of how to calculate this amount follows (assume there are two payment periods during the school year where borrowing between April 1st and August 31st is paid in February of the following school year, borrowing between September 1st and March 31st is paid in July of the current school year, and that the numerator in column 4 is the number of days during the 2025-26 school year between the date of borrowing and the capital payment date in column 3):
| Date of Internal Borrowing col. 1 |
Amount Borrowed col. 2 |
Capital Payment Date col. 3 |
Number of days to be used for numerator col. 4 |
Proportion of 2025-26 year with internal borrowing col. 5 |
Weighted Borrowing col. 6 (col. 2 X col. 3) |
|---|---|---|---|---|---|
| April 15, 2025 | 100,000 | February 15, 2026 | Sept 1, 2025 to Feb 15, 2026 = 168 days | 168 / 365 | 46,027 |
| July 15, 2025 | 500,000 | February 15, 2026 | Sept 1, 2025 to Feb 15, 2026 = 168 days | 168 / 365 | 230,137 |
| Sept. 15, 2025 | 150,000 | July 15, 2026 | Sept 15, 2025 to July 15, 2026 = 303 days | 303 / 365 | 124,521 |
| May 15, 2026 | 50,000 | February 15, 2027 | May 15, 2026 to Aug 31, 2026 = 108 days | 108 / 365 | 14,795 |
| Average internal borrowing related to eligible NPF expenditures | 415,480 |
The amount must be calculated for each eligible capital program and entered in the applicable column.
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Item 1.3.1 (Short-Term Interest on External Borrowing Related to eligible NPF expenditures): Report any external borrowing costs related to the eligible capital programs prior to receiving grant payment.
- The amount must be calculated for each eligible capital program and entered in the applicable column.
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Item 1.3.2 (Interest Costs in Excess of Ministry’s Funding Rate): Enter any external borrowing interest costs reported above that are in excess of the average CORRA for the period of borrowing plus 75 basis points, if any. Amounts entered on this line are not eligible for funding.
2. Interest on Long Term Debt Component
This component funds supported interest on OFA and non-OFA long-term debt. The values are loaded from Schedule 5A Long Term Capital Debt Continuity, column 5, item 1.1 (for OFA) and items 1.2 and 1.3 (for non-OFA).
Section 8B - Debt Charges Allocation
This allocation funds the amount payable to school boards via the blocked account set up under the agreement between school boards and the 55 School Board Trust. The value is preloaded for affected school boards based on the agreement, and does not change from year to year.