What Calgary's AA+ Credit Rating Says About the City's Long-Term Investment Fundamentals

Municipal credit ratings rarely make headlines in commercial real estate, but they provide valuable insight into a city's financial capacity, governance, and long-term investment outlook.

S&P Global Ratings has reaffirmed the City of Calgary's AA+ long-term issuer credit rating with a Stable Outlook, placing Calgary among Canada's strongest-rated municipalities. While the announcement reflects another year of sound financial management, it also highlights several characteristics that institutional investors and developers often consider when evaluating a market.

According to S&P, Calgary's rating reflects the City's strong operating performance, robust liquidity, prudent financial management, and expectation that future debt levels will remain manageable despite an ambitious capital investment program. S&P also notes the City's ability to finance a significant portion of its infrastructure program through internally generated cash flow, reducing reliance on external borrowing.

Looking Beyond the Rating

A recent discussion published by the National League of Cities provides useful context on how S&P evaluates municipal credit quality.

As S&P Associate Director Daniel Golliday explains, "issuers with the strongest credit profiles have a lot in common when it comes to management practices and policies." Rather than focusing solely on annual budgets, rating agencies examine how municipalities plan for the future, manage financial risk, and maintain flexibility through economic cycles.

Among the characteristics commonly associated with highly rated municipalities are:

• Comprehensive long-term financial planning

• Formal reserve and debt management policies

• Strong liquidity and cash management

• Multi-year capital infrastructure planning

• Diversified local economies

• Stable governance and transparent financial reporting

These characteristics help municipalities preserve financial flexibility while continuing to invest in the infrastructure required to support growth.

While an AA+ rating does not directly create development opportunities, it contributes to the broader investment environment. Lower municipal borrowing costs can reduce the cost of financing major infrastructure projects, while strong governance and financial stability provide greater confidence that transportation networks, utilities, servicing, and community infrastructure can continue expanding alongside population and employment growth.

For industrial, office, retail, and mixed-use development, these investments form the foundation upon which private capital is deployed. Institutional investors often evaluate market fundamentals that extend well beyond property-level performance. Population growth, employment trends, infrastructure investment, municipal governance, and fiscal stability all contribute to long-term investment decisions. Calgary's continued AA+ rating reinforces the City's reputation as a financially resilient municipality capable of supporting long-term economic growth.

For commercial real estate professionals, the announcement is another indicator that Calgary continues to demonstrate many of the characteristics institutional capital seeks when evaluating markets for long-term investment.

Source: S&P Global Ratings, Research Update: City of Calgary 'AA+' Ratings Affirmed; Outlook Stable (July 21, 2026); National League of Cities, From Stuck to Upgraded: S&P Global Ratings' Insights into Better Municipal Credit Ratings (Aug. 26, 2025).