“Well-balanced framework, strong economy:” City retains ‘AAA’/Stable credit rating

The City of Saskatoon has, once again, been reconfirmed as having a ‘AAA’ credit rating with a “stable” outlook by S&P Global Rating Services (S&P), a favourable ranking that the City has retained for more than 10 years.

In reaffirming the City’s ‘AAA’/Stable credit rating, S&P’s report released today noted the City “will continue to benefit from a strong and diverse economy that supports strong budgetary performance, keeping debt issuance manageable and liquidity exceptional.”

The City’s Chief Financial Officer Kerry Tarasoff points out S&P grants this rating for many reasons; the S&P report says the City’s “…disclosure and transparency are what we believe to be good, and the City prepares robust annual operating and capital budget documents.”

The report also highlights an expectation that the City's strong financial management will keep Saskatoon with a ‘AAA/Stable’ rating for years to come.

“We have heard some recent commentary about the City’s transparency and financial performance in a ‘report card’ of sorts,” Tarasoff says. “The rating City Council relies on is the one from S&P Global Rating Services.”

He adds as with all Canadian municipalities, COVID-19 has had a huge impact on the City’s finances for 2020 and 2021, however he says S&P Global is treating these impacts as temporary in nature.  Taken from the report  released today:

 “Although the impact of the pandemic depends on the rate of spread and duration, we believe that Saskatoon's prudent financial management and cost-containment efforts will continue to generate robust operating balances and mitigate the direct fiscal impacts stemming from the pandemic. At the same time, we expect the City's prudent financial management and diverse economy will continue to support Saskatoon in generating strong budgetary performances that will help fund its capital agenda and keep its debt level manageable; this, in turn, will help preserve the City's exceptionally strong liquidity.”

Key findings within the January 27, 2021 S&P Ratings Direct® Report are:

• Saskatoon’s diverse economy with a growing population will provide consistency in the city's property tax base despite the negative impact of COVID-19
• The City's prudent financial management will continue to allow it to post strong operating balances
• A stated belief that “the city's relationship with the province will remain well-balanced and supportive”
• Saskatoon will continue to generate robust operating margins despite the near-term impact of the pandemic on the City's fiscal position
• Strong operating balances will help the City in implementing its capital plans while maintaining minimal levels of tax-supported debt
• The City's exceptional liquidity position will continue to support its creditworthiness

The full report is available on the City’s website saskatoon.ca/finance.