City of Saskatoon maintains 21st consecutive ‘AAA’/Stable credit rating; reaffirmed by S&P Global Ratings

S&P Global Ratings (S&P) has reaffirmed the City of Saskatoon’s credit rating with the highest rating possible, a ‘AAA’ credit rating with a “Stable” outlook. The City has maintained the ‘AAA’/Stable credit rating for twenty-one years since S&P first began affirming the City’s credit ratings in 2002.

“City Staff and City Council have worked hard over the years to ensure that prudent financial management and forward-thinking financial decisions are always top priority.  This endorsement by S&P once again confirms the City of Saskatoon’s financial management practices, economy and outlook as one of the strongest in the country,” says Clae Hack, Chief Financial Officer. “I’m confident the City’s prudent financial practices and our strong economy will continue to serve the City, residents and our business community well into the future.”

S&P notes “Saskatoon’s broad and diverse economy with a growing population will continue to support the City’s creditworthiness,” and also observes the City’s ability to  “maintain robust financial results that will support its capital plans, low debt, and exceptional liquidity.” As experienced by other Canadian municipalities, “Saskatoon benefits from an extremely predictable and supportive local and regional government framework that has demonstrated high institutional stability and evidence of extraordinary support in times of financial distress.”

“Maintaining the ‘AAA’ credit rating which includes a stable outlook, is important as it supports our confidence in our budgetary decisions, financial management and overall economic outlook for the City of Saskatoon,” adds Hack. “We continue to be a municipal leader and remain assured in our ability to minimize debt as we commit to priorities within the City’s 2022-2025 Strategic Plan and undertake long-term planning for infrastructure to support our great quality of life in Saskatoon.”

S&P states rationale contributing to the City’s strong credit rating within January 19, 2023, S&P Global Ratings Direct® Report:

• The City's “strong and prudent financial management is a key credit strength” and “the City’s management team is experienced and qualified to effectively enact fiscal policies and respond to external risks.”
• The City “demonstrates good political and managerial strength with its lengthy track record of passing budgets with minimal variations from budgeted revenues and expenses.”
• S & P views “management accountability as strong and financial policies as prudent. Management’s disclosure and transparency are good, and the city prepares robust annual budget documents.”
• “The City prepares multiyear operating and capital budgets for subsequent years, as well as long-term capital and borrowing plans. We believe that this supports fiscal transparency and discipline.”
• The City maintains “exceptional liquidity” and “debt is supported by high operating margins, which over five years exceed total direct debt outstanding, highlighting the small and manageable debt burden.”

Credit ratings are one of several tools that investors and lenders use when making decisions regarding an organization’s future financial strengths and weaknesses. For the City of Saskatoon, the ‘AAA’/Stable rating serves as an indication of the credit risk and ability to meet its financial obligations in full and on time. This also identifies the credit quality of the City’s debt issue and can translate into lower interest rates for favourable credit ratings since there is minimal or low risk associated with the City’s debt.

View the City of Saskatoon’s past documents on financial performance and credit rating history at saskatoon.ca.