16-07-2025
Varcoe: City of Calgary maintains high credit rating as debt grows from big-ticket projects
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Let's give some credit where credit is due.
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In this case, credit rating agency Morningstar DBRS gave the city its due in the past week, reaffirming the City of Calgary's long-term debt credit rating at AA (high).
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More significantly, the stable rating arrives as the civic government wrestles with some large projects — and larger spending commitments — on the horizon.
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Think about downtown revitalization, construction of a new arena, plans to upgrade key water infrastructure and the Green Line LRT, the largest transit project in Calgary's history.
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'We do see the numbers go up significantly, and a lot of it has to do with how much we've taken on,' said Coun. Andre Chabot.
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'The fortunate thing is that we have the ability to service all of that debt . . . I don't think it's going to affect our credit rating, but it does limit our ability to be nimble in regards to some of the future needs.'
In 2025, DBRS estimates adjusted taxpayer-supported debt will be $523 per person, 'low compared with rated (city) peers.'
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That figure is projected to climb to about $952 by the end of the decade, up 82 per cent from 2025 levels, it said.
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'Based on the most recent debt forecast, Morningstar DBRS expects the increase in debt over the forecast horizon to be manageable,' states the credit rating agency's report.
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In an interview, Morningstar DBRS assistant vice-president Apurva Khandeparker said the city's economy continues to grow, although at a slower pace this year because of trade uncertainty and as the population boom decelerates due to federal immigration policy changes.
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However, the city's energy sector remains relatively stable, production is rising and more oil export capacity is available through the Trans Mountain pipeline. The expansion of the local tech sector is also helping to diversify the local economy.
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A recent Conference Board of Canada report forecast Calgary's economy will expand by 1.8 per cent in 2025, second highest among large Canadian cities.
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'Calgary has been one of the most stable and financially stronger municipal credits that we rate. So our ratings mostly reflect its historically sound fiscal management practises, the strong liquidity the city has and the currently low debt burden,' Khandeparker said, noting the city has maintained a AA rating for many years.
