The City of Hamilton’s credit rating has been downgraded to ‘AA+’ from the top-tier ‘AAA’ by S&P Global Ratings, a move that will increase the City’s borrowing costs for debt, and is expected to result in higher taxes for local ratepayers. The rating agency explicitly cited “gaps in the city’s financial management practices, particularly risk management, that are not consistent with similarly rated peers” as the reason for the downgrade.
City Failing to Provide Basic and Routine Financial Reports
The downgrade reflects the City of Hamilton’s continued inability to provide basic financial statements, which S&P Global Ratings called a concern for debt purchasers and a weakness in financial management.
“Following the cyberattack in early 2024, Hamilton continues to experience substantial delay in reconstituting and compiling audited financial statements. The last audited financials are from 2022,” the S&P report reads. “Neither the 2023 or 2024 audited financial statements are available, and there is a risk that delays will impair 2025 financial data availability. These challenges in data recovery, in our view, reflect weakness in financial management, particularly with regard to transparency, disclosure, and risk management practices.”
The City of Hamilton is the only large single- or upper-tier municipality in Ontario that has failed to file its provincially required Financial Information Returns for both 2023 and 2024.
Cybersecurity Failure and Lack of Basic Safeguards
The financial reporting failure follows a February 2024 cybersecurity incident that impacted most City systems. The City’s network failed to employ multi-factor authentication, lacked robust air-gapped off-site backups, and relied on administrative superuser accounts with global permissions that were exploited by hackers’ automated scripts.
The City’s insurance provider subsequently concluded the cybersecurity failure was preventable, citing the lack of multi-factor authentication, which was a requirement within the City’s insurance policy.
This is the latest in a series of independent reports concluding that Hamilton is among the worst-performing municipalities in Ontario and Canada for both planning approval timelines and budgetary accounting and transparency.
In response to past scrutiny regarding financial management, Hamilton City Council has frequently cited the Government Finance Officers Association’s Distinguished Budget Presentation Award as a counter-point, an ‘award’ requiring an annual application fee of approximately $1,200. Over 1700 other government bodies also purchase the GFAO ‘award”.
Support from Senior Governments Prevents Further Downgrade
Credit ratings reflect the likelihood that debt holders will receive prompt payments. The City of Hamilton’s current rating benefits significantly from the strength of support demonstrated by higher levels of government for municipal finances, particularly following the COVID-19 pandemic. The City’s credit rating, along with the ratings of nearly every municipal government in Canada, was upgraded in 2022 following the demonstration of support for municipal finances from the federal government during the COVID pandemic.
The S&P Global Ratings report notes this support as a key reason for limiting the downgrade to one notch. “Hamilton benefits from an extremely predictable and supportive local and regional government framework that has demonstrated high institutional stability and evidence of systemic extraordinary support in times of financial distress,” the report states.
Further Downgrades Are Possible
General Manager of Finance and Corporate Services Mike Zegarac has not provided a public timeline for when the City of Hamilton expects to resume meeting mandatory financial reporting requirements.
S&P Global Ratings warns that a persistent failure to report data could lead to another rating downgrade within the next year, stating, “we could lower the rating over the next year amid persistent gaps in financial disclosure, which further weigh on our view of management practices.”
Hamilton voters will go to the polls to elect a mayor and councillors for the 2026-2030 term on October 26, 2026.
Production Details
v. 1.0.0
Published: October 24, 2025
Last updated: October 24, 2025
Author: Joey Coleman
Update Record
v. 1.0.0 original version
This report absolutely reflects the ridiculous and often unexplained financial queries under Andrea Horvath’s leadership . There is zero accountability or transparency. It’s absurd …we need someone who knows how to actually run a city and the employees need to be held to account. The spending is reckless, we have departments full of employees who literally do nothing . We need a complete overhaul…