Calgary's strong credit rating renewed by Standard and Poor's
Drew Anderson | CBC News | Posted: July 6, 2016 12:10 PM | Last Updated: July 6, 2016
U.S. financial services giant maintains city's AA+ score, citing good management and low debt
The same credit agency that has downgraded Alberta's rating twice over the past few months has kept Calgary's strong score in place.
Standard and Poor's is holding Calgary at a AA+ rating on its long-term credit and unsecured debt ratings, and A-1+ on its short-term rating.
The agency said the city has moderate debt levels compared with national and international peers and is managing its finances well.
Borrowing and budgeting
The vice chair of the city's finance committee, Coun. Ward Sutherland, said unlike the provincial government, this shows there is confidence in Calgary's budgeting.
"We haven't been borrowing money and we're only less than 40 per cent of our borrowing power, and we're not intending to borrow any money in the near future. So we have that liquidity to deal with all the issues we have right now," he said.
"And as you know, we've drawn back on our operating budget, so we're watching it very closely."
Limited wiggle room
The agency said Calgary's fiscal performance is expected to remain strong "despite a large capital expenditure program," and that the city's "budgetary performance will remain strong over the 2016-2018 period if it continues to be prudent in operating spending growth, while continuing a solid strategy to levy taxes."
The report does warn the city will have limited ability to make cuts to its spending during the recession because of continuing population increases, and will have reduced wiggle room because of large capital expenditures and infrastructure spending — which the agency believes Calgary "has little ability to defer."
"As a city we are managing our finances very well and we're continuing to do so," said Sutherland. "And they said in 2016-2018, it's looking strong from our overall plan. So we're open for business. Come to Calgary, we're in good shape."