The Fiscal Condition of American and Canadian Cities

Abstract

The fiscal condition of American and Canadian cities is examined in this paper using municipal bond ratings from Moody's Investors Service for the period 1970-1980. Two hypotheses are posited: that Canadian central cities will exhibit greater fiscal health than will American central cities; over time Canadian and US cities will exhibit differences in changes in bond ratings with changes being more positive for the Canadian case. Neither hypothesis is refuted by the bond rating evidence presented in the paper. While the limited size of the Canadian sample of cities with Moody's bond rating precludes rigorous statistical tests, the findings are consistent with previous work which suggests that there are significant differences between Canadian and US cities and that the North American City concept must be used with care.