Canada's Parliament building. (Lethbridge News Now)

By Canadian Press

Canada’s credit rating downgraded to AA+ by Fitch

Jun 24, 2020 | 3:03 PM

OTTAWA – Finance Minister Bill Morneau is defending the state of the country’s finances after an international agency stripped Canada of its triple-A credit rating.

He says Canada is in a stronger financial position than many other G7 and G20 countries, noting continued global investment in Canadian bonds helping to drive down the cost of borrowing.

In a statement, Morneau says the federal government “will continue to be fiscally responsible” while doing what’s necessary to protect the domestic economy.

The statement came after Fitch Ratings dropped the country to an “AA+” rating on Wednesday over what it called “the deterioration of Canada’s public finances” due to the COVID-19 pandemic.

Public health measures needed to slow the spread of novel coronavirus and depressed oil prices “will cause a severe recession” in Canada this year, Fitch says in an online notice, forecasting a contraction of 7.1 per cent.

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Canada had seen about 1.7 per cent annual growth leading up to the pandemic, but Fitch claims the country’s medium-term growth prospects are limited and below many of its peers.

(The Canadian Press)