The City of Calgary says its operations will not be affected by news that Alberta’s credit rating has been downgraded.
On Friday, Standard and Poor’s Global Ratings downgraded the province’s credit rating by two notches from AA status to A-. The agency attributed the move to the province’s projected deficits being among the highest of non-U.S. local and regional governments, which they expect to lead to “rapid growth” in the province’s debt burden.
During Monday’s meeting of Calgary city council, Coun. Joe Magliocca asked the administration if the city faced higher borrowing costs because of the S&P downgrade.
“The city credit rating is AA+ and remains at that,” said chief financial officer Eric Sawyer. “I think we have some situations the province doesn’t have. We don’t heavily rely on volatile revenue sources.”
Sawyer said the city has managed its debt very tightly, liquidity is good, and some of the factors working against the province don’t have an impact on the city. He went on to say he doesn’t anticipate the downgrade to have an impact on borrowing for the proposed Green Line LRT project.
“We’ve yet to finalize financing plans around that, but we have every intention they’ll be done within our debt limits.”
Coun. Peter Demong underscored Sawyer’s comments by saying the two credit ratings are different.
“I just want to be really completely clear on this. The province’s credit rating went down, they city’s credit rating is still exactly where it’s always been,” Demong said. “It has not been downgraded, it’s actually one of the highest ratings that can be achieved.”