For the first time in more than 20 years, the City of Toronto received a boost in its credit score rating allowing the city to access lower long-term borrowing costs.
S&P Global, an international credit rating company, raised the city’s credit rating from AA to AA+, marking the first time in 23 years that the rating was improved.
The score improved this year due to better financial planning in the 2025 budget, allocation of investments, and gaining financial support from the provincial government in the Ontario-Toronto New Deal approved on Dec. 13 2023, according to a news release issued by the city on Oct. 23.
The city’s credit rating tells residents how financially sustainable Toronto is, and a higher credit allows the city access to lower long-term borrowing costs for investments towards affordable housing, transit, community centres, roads, and wastewater.
“A year ago, our city faced a number of financial challenges, but with prudent financial management and honest, long-term planning, we’ve started to turn it around and get the City back on track,” Mayor Olivia Chow posted on X on Oct. 25.
The Ontario-Toronto New Deal outlines a plan to invest $1.9 billion for the next decade into affordable housing and transit after last year’s funding went into the uploading of the F.G. Gardiner Expressway and the Don Valley Parkway, according to a release from July 24. In addition, $500 million is going towards improving the Toronto Transit Commission (TTC), including the development of Woodbine GO, and construction of the Broadview Extension as part of the East Harbour Transit Hub, according to the detailed term sheet published on Nov. 26, 2023.
The Toronto Region Board of Trade also commends the outcome of the New Deal, but has been calling Toronto residents react to city’s credit rating improving for the first time in 20+ yearsfor more sustainable funding from upper levels of government.
“That has been a big push by the board for the past few years [to] ensure services are covered by appropriate levels of government and not simply downloaded to cities,” Manager of Communications and Media Relations Jason Chapman told Now Toronto.
In addition to S&P Global Ratings, other top investors also give the city a credit score including Moody’s Investors Services (Aa1) and DBRS Morningstar (AA).
Online, Torontonians are reacting to the city’s improved rating.
“Getting the Gardiner uploaded is one of the best outcomes in recent Toronto history,” one person said on Reddit.
“The province can appropriate property from people to build highways, and determine a purchase price that the province deems fair. But they can’t do that with actual highways. Why?” another Reddit user said.
Others are debating on if the change in government leadership has affected Toronto’s credit rating.
“Toronto lost its AA+ rating under conservative mayor Mel Lastman and never got it back under conservative mayors Rob Ford or John Tory. It’s taken a progressive mayor’s office to restore the city to fiscal strength and sustainability,” one person posted on X.
“Sounds more so like them giving away financial responsibility of the Gardiner and Don Valley was the major catalyst,” a Reddit user said.
