The city's most powerful committee moved to increase its borrowing limits by $250 million Wednesday, a move one taxpayers' advocate fears will result in higher taxes and/or reduced city services.

"This is very concerning. Debt is just delayed tax," said Todd MacKay, prairies director of the Canadian Taxpayers Federation.

MacKay noted Moody's Investors Service already downgraded the city's credit rating to Aa2 from Aa1 in July, blaming the city's reliance on funding from the cash-strapped province. And increasing borrowing raises the risk others will do the same, triggering higher interest rates in the future, said MacKay.

"To make those payments, you either have to raise taxes or cut services. If you keep on this trajectory, that's the inevitable outcome," said MacKay.

But Mayor Brian Bowman said the executive policy committee decision to raise the debt ceiling, which still requires council approval, would allow the city to take advantage of "record-low" interest rates to ensure it meets major infrastructure demands.

"These are fixed borrowing costs on record-low interest rates and we do have serious needs for investment in infrastructure," said Bowman.

In fact, Coun. Marty Morantz (Charleswood-Tuxedo-Whyte Ridge), the city's finance chair, says a long-desired Waverley underpass wouldn't be possible without a higher borrowing limit.

"We have to do this to create the borrowing room and authority for us to come up with our share of the capital for the Waverley underpass," said Morantz.

Morantz noted the city is able to lock in low interest rates for 20 to 30 years, giving it more affordable borrowing potential. And he said it's too soon to reveal if Winnipeggers could face a tax hike or service cuts to deal with higher debt-servicing costs.

The city's debt reached $943 million in 2014, which is expected to grow to $1.72 billion in 2023, based on projected capital spending, a city report notes. The report notes the city is nearing its previous debt ceiling set in 2011.

Morantz noted, however, that city finance officials advised the raised debt ceiling should allow the city to hold its current rating.

City staff note, however, that forecasted net debt and debt servicing costs will approach the "high level of what would be considered acceptable" for the rating.

A few city debt numbers:

$943 million: debt as of 2014

debt as of 2014 $1.72 billion: debt expected by 2023

debt expected by 2023 $250 million: additional borrowing sought through debt-ceiling increase

additional borrowing sought through debt-ceiling increase $3.5 billion: cost expected to raise average condition of city infrastructure to "appropiate" level

cost expected to raise average condition of city infrastructure to "appropiate" level $7.4 billion: cost to reach desired infrastructure level over the next 10 years

Source: City of Winnipeg