2025-2029 Surrey Financial Plan

ECONOMIC OVERVIEW

Due to the size of BC’s budget deficit, credit rating agencies Moody’s and S&P Global have downgraded BC’s credit rating. S&P cut B.C.’s short-term rating to A-1 from A 1+, while Moody’s downgraded its long-term issuer and senior unsecured debt ratings to Aa1 from Aaa. The reduced credit rating is concerning for provincial finances as it will increase the government’s debt servicing costs. SURREY’S FINANCIAL PERFORMANCE In 2024, the City continued to invest in significant major capital and utility infrastructure related projects to provide citizens with access to safe, inviting, high quality facilities, programs and services. Capital investments included increasing the scope of the Cloverdale Sport & Ice Complex from two to three NHL-sized ice sheets along with approval of the $150 million 72 Avenue Corridor project, the largest road investment initiative in the City’s history. Council also approved funding for the Newton Community Centre, the largest-ever capital project in the City’s history. Concurrent with the planning of the Newton Community Centre, the City, Surrey City Development Corporation (“SCDC”) and TransLink are undertaking a Master Plan for the City owned and TransLink owned lands in Newton Town Centre. The purpose of the Master Plan is to determine a framework for mixed-use development of approximately 25 acres of City and TransLink owned lands that incorporates future transit (i.e. Bus Rapid Transit) and civic facility needs and sets the stage for future rezoning and development permit applications. Investing in major capital projects spurs economic activity that can catalyze growth while supporting our vision of a thriving, green and inclusive community. During 2022 and 2023, the Bank of Canada added 4.75% to their Target Overnight Rate, bringing the key interest rate to 5.00% in a bid to battle inflationary pressures. Once Consumer Price Index levels returned to the BOC’s preferred target, the process of unwinding monetary stimulus began in mid-2024 with seven interest rate cuts totaling 2.25%. The BOC has pivoted from its initial position, from a slow and gradual pace of interest rate reductions to avoid stoking inflation, to being concerned with the weakening economy and inflation falling below targeted levels. Two “supersized” rate cuts of 50 basis points each were employed to hedge against downside risks to economic activity. As interest rates remained relatively elevated during the first half of 2024, sustained elevated investment yields proved beneficial for the City’s investment portfolio. Overall, the City's accumulated surplus increased by more than $600.3M, as compared to 2023. The fiscal performance of the City in relation to the adopted budget is indicative of a continued stable and strong financial position. All departments are continuing to proactively manage their respective budgets and helping to retain a strong financial position for the City. The City has prioritized new capital infrastructure projects that will ensure the recreational, cultural, and transportation infrastructure needs of its citizens will keep pace with the City's growth.

City of Surrey | 2025—2029 Financial Plan | Financial Overview

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