City of Thunder Bay maintains AA credit rating


The city received an AA rating for the sixth consecutive year, having dropped from A+ ten years ago.

THUNDER BAY – The City of Thunder Bay remains in a strong financial position, according to S&P Global Ratings.

The rating agency gave the city an AA rating in its 2022 report, indicating a “very strong capacity to meet financial commitments”.

The city announced its sixth consecutive annual AA result on Tuesday.

“This rating will allow the [city] to continue to obtain the best interest rates available for future debt financing needs,” said City Treasurer Linda Evans. “The rating recognizes strong fiscal performance as well as improving capital reserve balances that will help meet infrastructure needs.”

An S&P summary report refers to the city’s “stable tax base” and “exceptional liquidity position.”

“Despite the negative effects of the COVID-19 pandemic, a strong public sector has supported the stability of the city’s property tax base,” it read.

The city is expected to continue to post large operating surpluses which should be used to catch up with infrastructure needs.

S&P estimated the city will issue about $115 million in gross debt between 2021 and 2024, including planned extensions to Tbaytel’s fiber optic network. However, he expects interest payments on tax-funded debt to remain below 2% of operating revenue.

Thunder Bay’s “weaker demographic profile, characterized by slow population growth and a proportion of residents aged 65 and over” will pose a challenge to future economic growth, S&P warned.

In 2012, the city’s S&P rating was only A+.

From 2013 to 2016 it was elevated to AA- and further upgraded to AA stable in 2017.

The city’s rating matches that of many other municipalities in Ontario, although some larger municipalities and regional governments have achieved AAA ratings.


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