Canada’s Credit Rating Downgraded to AA+ Amid Increasing Coronavirus Costs

As a result of the mounting federal government spending on coronavirus mitigation efforts, Canada has had its credit rating reduced from AAA to only AA+ alongside a stable outlook for the medium term.

Fitch Ratings Inc is anticipating Canada’s debt to increase from 88.3% of GDP in 2019, to 115.1% of GDP in 2020, with debt-to-GDP becoming more stable in the medium run. The sudden increase in debt comes amid a sudden and significant increase in federal government spending on the coronavirus pandemic. Since the onset of the pandemic, spending on coronavirus relief measures has surpassed $150 billion.

As a result of the increased spending on pandemic measures, Fitch has downgraded the country’s credit rating to AA+ in response to the country’s respective debt increase. The rating downgrade is certainly a blow to the federal government, which has prided itself with Canada’s exceptional AAA credit rating, and even made it a point on their 2019 election platform. However, Canada’s parliamentary budget officer Yves Giroux is not surprised by the credit rating reduction in wake of a global pandemic. According to Giroux, so as long as other credit rating agencies do not follow suit in downgrading, then Canada does not have much to worry about.

Canada Gross Debt To GDP Ratio

Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Silver @ $36 & We’re Still 200M Oz Short | Paul Andre Huet – Americas Gold and Silver

Gold’s Wild Bull Run: Are Markets About to Break? | Mike McGlone

First Majestic Silver: The Santa Elena Mine

Recommended

Goliath Resources Closes Out Funding Round With Total Gross Proceeds Of $27.1 Million

Silver47 Kickstarts 4,000 Metre Drill Campaign At Red Mountain Project

Related News

Federal Government Pledges $600 Million to Regional Relief Fund as Canada’s Economic Recovery Enters Standstill

As summer comes to an end and cold temperatures set in across much of Canada,...

Saturday, October 3, 2020, 03:56:00 PM

Canadian Wholesale Trade Fell by 21.6% in April Amid Coronavirus Pandemic

The coronavirus pandemic caused many businesses across Canada to shut their doors, while consumers were...

Friday, June 19, 2020, 12:41:00 PM

Canada’s Labor Market Suffers First Decline Since April

As a number of public health restrictions were tightened across Canada heading into the winter...

Friday, January 8, 2021, 02:45:00 PM

Canadian Manufacturing Sales Fall by Record in April

Following strict social distancing measures and mandatory shutdowns in April, new data has emerged regarding...

Tuesday, June 16, 2020, 11:34:30 AM

Immigration to Canada Fell by Nearly Half in 2020 Amid Pandemic Travel Restrictions

The Covid-19 pandemic forced numerous countries to shut their borders to international travel and migration,...

Monday, February 15, 2021, 11:28:00 AM