For Immediate Release
Thursday, May 3, 2001
Treasurer and Commissioner of Finance
Region of Peel
905-791-7800, Ext. 4258
Rating Agencies Reconfirm Region Of Peel's Triple-A Rating
(Brampton) -- Canada's two leading credit rating agencies have once again awarded the Region of Peel a Triple-A credit rating, which was reported today to the General Committee of Regional Council.
The Dominion Bond Rating Service (DBRS) publishes a financial/credit risk overview (benchmarking) among major Canadian municipalities. DBRS states that in its analysis Peel Region stood out as "the strongest financial profile of all the major Canadian municipalities."
A Triple-A credit rating is the highest rating that can be awarded to a municipality by a credit rating agency. While other Ontario municipalities, including Halton, have the same rating from DBRS, there are degrees of confidence stated within that rating and among these rankings, Peel Region's score stands highest. This rating enables Peel to attract new businesses and development opportunities because of its financial stability and positive long-term economic outlook.
Late last year, the Standard and Poor's rating service acquired the Canadian Bond Rating Service. In March 2001, the two rating processes were harmonized and the new consolidated firm announced its Triple-A credit rating for Peel.
"I am delighted to bring this report before General Committee members today," said Joe Pennachetti, Peel Treasurer and Commissioner of Finance. "This rating is an affirmation of a Regional government that is committed to long-term sustainable financing while remaining debt free and, at the same time, providing extremely high value to our citizens. It places Peel among the elite in Canada."
Pennachetti said Peel's Triple-A rating is based on the sound fiscal management of the Region and the Cities of Brampton and Mississauga and the Town of Caledon. "We have a dedication to both fiscal and service excellence, and a system that works well for the residents and businesses of Peel. Council should be commended for its commitment to sound financial policies to ensure sustainable growth.
These reports are very positive news for taxpayers in Peel because basically they reflect on the economies and financial position of the Region. This means the Region is better able to keep taxes stable and continue in its long-term planning to maintain financial reserves so that infrastructure such as roads and wastewater operations can continue to be well maintained," he said.
According to Standard and Poor's, the Region of Peel has an "exceptionally strong financial position, the strongest of any municipality in Canada." The agency gave Peel a stable outlook (the maximum attainable), which "reflects the expectation that the municipality's financial flexibility and strength will continue to grow, led by its strengthening reserves and cash position, ongoing expansion in taxable assessment, and management's reliance on pay-as-you-go financing."
The DBRS report states that "the outlook for the medium term remains favourable based on the Region's track record, good financial management, continued robust economy and the transfer of ownership of the municipal electric utilities to the area municipalities, which provides them with a new source of revenue to fund future expenditure requirements."
Peel Regional Chair Emil Kolb said Regional Council should be commended for its discipline and far-sightedness in building reserves and for its unwavering demand that growth decisions made today will be sustainable in the long-term. "This rating is awarded to the Region, Brampton, Mississauga and Caledon because of years of making sound and responsible decisions. It goes back to our roots as builders of small communities, one project at a time - each carefully considered to ensure that we thrived and prospered. Those values continue in Peel today," said Kolb.
Pennachetti reported that one key challenge to Peel's stability reported in the DBRS award is the uncertainty surrounding the Greater Toronto Area (GTA) pooling payment to the City of Toronto that has been mandated by the Ontario Government. This edict sees more than $60 million of Peel's property taxes annually go to Toronto with no required audits or reporting by the province on how the money is spent.
DBRS states this as a negative because it "introduces uncertainty to the Region's fiscal forecast, as it has no control over this expenditure and it distorts the incentive to provide the services in the most cost effective manner".
"Peel Regional Council has opposed the GTA pooling decision and has also called for audited reporting on how this money is spent. We do not feel that social costs for services like housing, social assistance and public health should be funded from property taxes, but should instead be funded from provincial income taxes," said Kolb.
Roger Maloney, Peel Region's Chief Administrative Officer, added that Peel Region's record of fiscal strength and excellence in service delivery "places Peel on a world-wide stage" since both Dominion Bond Rating Service and Standard & Poor's/Canadian Bond Rating Service provide credit ratings, industry analysis, rating reports and rating indices for issuers and investors throughout Canada, the United States, Europe and Japan.Communication Services, 10 Peel Centre Dr., Brampton, ON L6T 4B9
Phone: 905-791-7800, Fax: 905-791-0595 , e-mail
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