Three weeks after the presentation of its financial framework, the City of Montreal announces Friday that its credit rating has been revised upwards by the agency S&P Global. Mayor Valérie Plante speaks of a major “sign of confidence” for her administration.
Posted at 2:03 p.m.
“We are delighted with this news. This is major and it is an unprecedented mark of trust granted to us by the S&P Global Ratings agency. This testifies to our sound management of public finances,” said Ms.me Plant in a statement sent to the media in the afternoon.
The S&P Global report notes an “upgrade” in the City’s credit rating from AA- to AA stable, which allows Montreal to join the same level of staffing as it holds already under calculations by Moody’s, another ratings assessment group. A total of 20 other Canadian municipalities have had their credit ratings “upgraded”.
In its advisory, the firm S&P Global notes that despite “although the proactive cost reduction of municipal governments at the start of the pandemic was crucial, […] extraordinary direct support from higher levels of government has largely wiped out cities’ budget deficits” over the past two years of the pandemic.
At the beginning of May, the president of the executive committee, Dominique Ollivier, presented the City’s 2021 financial report. Montreal posted an overall surplus of 293 million for 2021, but its debt has still increased by nearly 300 million and now reaches 6.6 billion, a variation of nearly 5% compared to 2020. The debt ratio is now “114%, i.e. 6% lower than that forecast in the 2021 budget”, noted the municipal authorities in their report.
“Incalculable efforts have been made for municipal finances. We have put in place a plan to reduce expenses and have significantly supported our merchants and our economy, without compromising the financial health of the City,” said Ms.me Olivier.
Merit in Quebec and Ottawa, says the opposition
PHOTO FRANÇOIS ROY, LA PRESSE ARCHIVES
Alan De Sousa, Opposition Critic at Montreal City Hall for Finance
Joined by The Press, the opposition finance critic at Montreal City Hall, Alan De Sousa, attributes the credit for this credit rating upgrade to the provincial and federal governments instead. “The analysis grid on the credit ratings of Canadian municipalities now takes into account greater confidence in the intervention of senior governments in times of crisis. This change has allowed 21 Canadian municipalities, including Montreal, to see their ratings raised,” says the man who is also mayor of the borough of Saint-Laurent.
According to him, this new rating therefore does not qualify “the management of the City”, but rather “the solidity of the institutional environment in which it evolves”. “The good management of a city must be based on its autonomy and not its ability to rely systematically on the upper levels,” he criticizes.
Ensemble Montréal also reports that another full annual report from Standard & Poor’s is expected in August. “We will be attentive to it”, promises Mr. De Sousa on this subject.