Measure Description

City of Edmonton Credit Rating is one of the 26 corporate outcome measures identified in the City's strategic plan, The Way Ahead. It is one of the measures used to monitor progress towards the corporate outcome: " The City of Edmonton has a resilient financial position."City of Edmonton Credit Rating measures the general creditworthiness, financial health and financial management practices of the City of Edmonton. The City uses the credit rating by Standard and Poor's (S&P) Rating Services, which collects detailed economic and financial statistics from the City on an annual basis. The rating methodology is based on an assessment of economy, financial management, budgetary flexibility and performance, liquidity, debt burden, institutional framework and contingent liabilities. Together, these categories produce eight equally weighted factors for assessment. The City's individual credit rating is derived from the average scored of the eight factors.

Measure Importance

This measure demonstrates the consistent creditworthiness of the City of Edmonton, which allows the City to pay a lower interest rate when borrowing. Paying lower interest provides a greater opportunity for growth and sustainability. The credit rating also reflects the City’s strong fiscal position and responsible stewardship of taxpayers’ dollars in providing services and infrastructure. For government organizations,credit ratings increase transparency and provide a basis of comparison with other organizations.

City of Edmonton Credit Rating Results

Edmonton's Citizen Dashboard uses numerical data to display and calculate performance. As the Credit Rating is based on a lettering system, historical and current results are provided in the image below.

Data Source: Standard and Poor’s (S&P) Rating Services

Explanation of Performance

In 2017, the City was again awarded a credit rating of AA+. S&P defines the broader AA credit rating category as having a very strong capacity to meet financial commitments. In addition, the City benefits from very strong financial management and exceptional liquidity. The strong financial position results from a predictable and well-balanced institutional framework for Canadian municipalities and the City’s strong budgetary performance. The City continues to make significant capital expenditures to expand infrastructure, including the LRT network, to accommodate growth, but remains well within its legislated and internal policy debt and debt service limits. In addition, debt is currently affordable and the City continues to maintain flexibility with respect to issuing debt in response to emerging needs and priorities.

Although the City’s Credit Rating remains strong, S&P revised its outlook on the City from stable to negative in 2017. This negative outlook reflects S&P’s assessment of the risk that the rollout or announcement of additional capital projects will keep the City’s after capital deficits and debt burden near current levels on a sustained basis.

Did you Know?

2016 result: AA+ Standard and Poor's defines this as having a very strong capacity to meet financial commitments, with a stable outlook.

Useful Links

City of Edmonton Financial Annual Report: http://www.edmonton.ca/city_government/facts_figures/coe-annual-reports.aspx

For information about the City's strategic plan, The Way Ahead: http://www.edmonton.ca/city_government/city_vision_and_strategic_plan/the-way-ahead.aspx