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Taking note of Sault Ste. Marie’s ongoing efforts to develop its tourism sector, credit analyst S&P Global Ratings has raised the city’s credit rating from AA (stable) to AA+ (stable).
“A strong credit rating will assist the city’s ability to obtain long-term debt at competitive rates,” says Shelley Schell, the city’s treasurer and chief financial officer.
“The rating outlook as ‘stable’ means that the rating is not likely to change in the next two years,” Schell says in a report prepared for Tuesday’s city council meeting.
One major reason for the improved rating cited by S&P is a general institutional reassessment of Canadian municipalities, which are now viewed as “extremely predictable and supportive.”
“Sault Ste. Marie is the third-largest city in northern Ontario and relies mainly on steel manufacturing and forestry,” says S&P’s latest rating reported, dated Sept. 14.
“We believe the city’s main industries… will support the city’s ongoing economic growth. However, the city continues to face socioeconomic and geographic hurdles that may stymie potential economic growth.”
But S&P also notes: “the city continues to gradually diversify from its traditional resource-based economy to other sectors such as tourism.”
The credit analyst nonetheless predicts that “medium-term economic and related GDP growth will remain muted relative to that of Canada.”
“While GDP per capita is not available at the local level, we estimate it to be somewhat below the national level of about US$56,000 based on the city’s income data.”
The credit report is on the agenda for next week’s meeting of city council.
That meeting will be live-streamed on SooToday starting at 4:30 p.m. on Tuesday.
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