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City of Thunder Bay maintains AA credit rating

Sixth straight year city has received AA rating, after rising from A+ a decade ago.
Linda Evans 1
City treasurer Linda Evans said the reaffirmed AA credit rating will help ensure the city can secure the best available interest rates. (Ian Kaufman, TBnewswatch/FILE)

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

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

The city announced it's sixth straight yearly AA result on Tuesday.

“This rating will allow the [city] to continue to secure the best available interest rates for future debt financing requirements,” said city treasurer Linda Evans. “The rating recognizes strong budget performances along with improved capital reserve balances which will assist with addressing infrastructure needs.”

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

“Despite the negative effects of the COVID-19 pandemic, a large public sector has supported stability in the city's property tax base,” it reads.

The city is expected to continue to post strong operating surpluses that are anticipated to be used to catch up on infrastructure needs.

S&P estimated the city will issue around $115 million in gross debt between 2021 and 2024, including planned expansions to Tbaytel's fiber optic network. However, it expects interest payments on the tax-supported debt will remain at less than 2 per cent of operating revenues.

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

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

From 2013 to 2016, it was raised to  AA- and further improved to AA stable in 2017.

The city’s rating is in line with many other Ontario municipalities, though some larger municipalities and regional governments have achieved AAA ratings.

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