Press Release

DBRS Morningstar Confirms the City of Calgary’s Issuer Rating at AA (high) With a Stable Trend

Sub-Sovereign Governments
July 14, 2023

DBRS Limited (DBRS Morningstar) confirmed the City of Calgary’s (Calgary or the City) Issuer Rating and Long-Term Debt rating at AA (high) and its Commercial Paper rating at R-1 (high). All trends are Stable. The ratings are supported by the City’s approach to fiscal management, its relatively low debt burden, and its robust liquidity. However, Calgary's credit profile is vulnerable to volatility in the global energy markets. The Stable trends reflect DBRS Morningstar's view that the City has been able to prudently manage temporary and short-term operating pressures, a view that is further supported by provincial legislation, which requires any budgetary shortfall to be recovered in subsequent years.

Similar to prior years, the City reported a strong post-capital expenditure surplus in 2022, mainly reflecting improvements in fees and user charges supported by recovery in transit ridership and recreational program revenues as well as growth in tax and other revenue sources.

The 2023 budget plan—Resilient Calgary—represents the City’s next four-year budgeting cycle (2023–26) guided by the Council's foundational vision of building the City's economic, social, and climate resilience. While the budget provisions for increased spending on priority areas, it does not materially alter the City’s fiscal direction. The Council's priorities are largely consistent with the prior four-year budget plan but at the same time reflect investments essential toward economic and infrastructure needs. Over the medium-term plan, gross expenditures (net of recoveries) are projected to rise by an average of 1.8% over the forecast horizon and will be matched by a similar increase in revenues, and the plan assumes an average annual property tax rate increase of approximately 3.7%.

DBRS Morningstar expects Calgary's economy to maintain a favourable growth trajectory through the medium term, although the pace is expected to slow down in response to a deterioration in global economic conditions as central banks continue to keep policy rates high and make efforts to curb inflation. The City's economic growth is expected to moderate over the medium term with GDP of +2.4% through 2023 and +2.8% through 2024 as of April 23, 2023, although this is well above Canada’s expected economic growth of +1.0% and +1.1%, respectively, as per DBRS Morningstar's latest macroeconomic forecast as of June 2023. Key risks to the outlook remain centred on the forecast for global energy prices, rising inflation along with tighter financial conditions, and ongoing geopolitical events.

According to Calgary's most recent debt projections, the City’s tax-supported debt burden is expected to rise at a slower pace over the medium term compared with the previous budget forecast, rising more substantially in the outer years as financing ramps up for infrastructure-related projects. In 2023, the City projects tax-supported debt to increase slightly, resulting in debt per capita of $684. Net tax-supported debt per capita is expected to increase to slightly above $800 by 2026 and thereafter increasing to around $951 by 2028, which is slightly higher than previously anticipated. Tax-supported debt will likely be stable around 0.3% of taxable assessment over the medium term. These estimates are based on the assumption of roughly 2.0% annual population growth and a 3% annual growth in taxable assessment over this time horizon (note that taxable assessment during 2019, 2020, and 2021 experienced an annual decline of roughly 1.7%). Although some pressures may arise with issuance requirements for longer-term projects like the Green Line Light Rail Transit, DBRS Morningstar expects the increase in debt to be manageable.

A positive rating action is highly unlikely in the current environment. A downgrade could arise from a sustained deterioration in the fiscal outlook, or material acceleration in debt growth contrary to current expectations.

There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at (July 4, 2023).

All figures are in Canadian dollars unless otherwise noted.

DBRS Morningstar applied the following principal methodologies:
-- Rating Canadian Municipal Governments (April 28, 2023;
-- DBRS Morningstar Global Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (February 24, 2023;

The credit rating methodologies used in the analysis of this transaction can be found at:

A description of how DBRS Morningstar analyzes corporate finance transactions and how the methodologies are collectively applied can be found at:

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

DBRS Morningstar had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

Information regarding DBRS Morningstar ratings, including definitions, policies, and methodologies, is available on or contact us at

DBRS Limited
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