Canada’s robust credit rating should calm fears about federal deficits: Trudeau

Canada’s robust credit rating should calm fears about federal deficits: Trudeau

OTTAWA — Canadians worried about federal deficits should look at the country’s strong standing with international credit-rating agencies for some reassurance, Prime Minister Justin Trudeau says.

Trudeau said Canada’s triple-A rating with agencies like Moody’s Investors Service and Standard & Poor’s should provide comfort to taxpayers who fear his government has been accumulating too much debt.

Trudeau insisted Canada’s high rating scores mean experts have confidence in his government’s approach to the economy.

He made his argument as critics, and especially the Conservatives, warn Ottawa should be curbing deficit-spending in the stronger-than-expected economy.

Debate over the state of Canada’s books could turn into a key ballot-box issue ahead of next October’s federal election — and it could become particularly interesting if the Liberals are forced to navigate a downturn between now and then.

“This question around deficits, obviously, has been one that has led to a lot of conversations, a lot of attacks or critiques from our political opponents, the legitimate questions from journalists and, quite frankly, worries from Canadians,” Trudeau said in an interview last Friday with The Canadian Press.

“Who are the experts in terms of sustainability of a fiscal plan? I’d suggest that the international bond ratings agencies — S&P, Moody’s and those folks know what they’re talking about … The fact that the international ratings agencies are giving us a thumbs up right now should reassure people.”

Asked about the next downturn or recession, Trudeau argued his government’s moves to boost immigration and to make investments in areas like skills training, infrastructure and a lower-carbon economy have made Canada more resilient against future shocks.

He also said his government’s child-benefit enhancements and income-tax reductions for middle earners have also improved the resilience of Canadian households.

The Trudeau Liberals were elected in 2015 on a pledge to run modest annual shortfalls of no more than $10 billion and to balance the books by 2019. Instead, they’ve posted yearly deficits almost double that size and no longer have a timetable to return to balance.

After taking office, the Trudeau government shifted its focus to keeping the government’s debt burden — as measured by Ottawa’s net debt-to-GDP ratio — on a slight downward track.

Experts, however, have cautioned that the debt-to-GDP ratio will be thrown off course in a downturn, leaving Ottawa to search for another so-called “fiscal anchor” to keep spending in check.

Trudeau said the debt-to-GDP is a “benchmark we’re going to stick to.”

He was also asked if the public should expect the next Liberal election platform to focus on debt-to-GDP rather than another promise to balance the books.

“We’re certainly going to be making decisions about how to demonstrate our fiscal responsibility and nothing has been finally decided yet, but I think the debt as a share of GDP is a very handy and important way of measuring how sustainable a fiscal plan is,” he said.

credit rating

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta has 3,651 active cases of COVID-19.  (File photo)
Gov’t reports two more COVID-19 deaths in Red Deer on Sunday

Nineteen new deaths, including two in Red Deer, were reported by the… Continue reading

Andre Lemus, the owner of Las Palmeras in Red Deer, says he hopes in-person dining restrictions are lifted this upcoming Thursday. (Photo courtesy www.laspalmeras.ca)
Red Deer restaurant owner hopes in-person dining restrictions are lifted Thursday

The owner of a Red Deer restaurant says business has “dropped” since… Continue reading

The Town of Ponoka and the Alberta Union of Provincial Employees (AUPE) have ratified a new agreement, averting a strike. (File photo from Facebook)
Alberta gov’t ‘using pandemic as shield to lay off workers,’ says AUPE

The Government of Alberta’s “attacks on workers” is continuing with a new… Continue reading

Rocky Mountain House RCMP, EMS, Search and Rescue, STARS air ambulance and Alstrom Helicopters worked together to rescue a fallen ice climber Friday. (Photo contributed by Rocky Mountain House RCMP)
Rocky Mountain House RCMP help rescue fallen ice climber

Rocky Mountain RCMP helped assist a fallen ice climber Friday afternoon. At… Continue reading

Dwayne Buckle, 40 of Red Deer finished a 1,638-kilometre walk, in honour of his family. The 12-week, 82 day-journey wrapped up in Port Hardy, B.C. on Monday. Facebook photo
Red Deer man completes 1,638 km hike for cancer research

Dwayne Buckle, a Red Deer firefighter returned home Friday after his 12-week journey

A cat named Willow is shown in this recent handout photo. Victoria firefighter Capt. Tim Hanley says using a jackhammer and other home repair tools to save a cat stuck in a tiny basement drainpipe ranks as the strangest rescue call he's been on in his 20-year career. Hanley says he and three other firefighters spent more than two hours using sledgehammers and a jackhammer to break through Victoria homeowner Emma Hutchinson's concrete basement floor to free Willow, a nine-month-old kitten. THE CANADIAN PRESS/HO - Twitter, City of Victoria
Victoria firefighters use homeowners’ jackhammer to rescue cat trapped in tiny pipe

VICTORIA — A Victoria firefighter says using a jackhammer and other home… Continue reading

Conservative Leader Erin O'Toole holds a press conference on Parliament Hill, in Ottawa on December 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No place for ‘far right’ in Conservative Party: O’Toole

OTTAWA — Federal Conservative Leader Erin O’Toole says there is “no place… Continue reading

Alberta Energy Minister Sonya Savage addresses the attendees while Tom Olsen, Managing Director of the Canadian Energy Centre, looks on at a press conference at SAIT in Calgary on Wednesday, Dec. 11, 2019. THE CANADIAN PRESS/Greg Fulmes
‘Morally and ethically wrong:’ Court to hear challenge to Alberta coal policy removal

First Nations, ranchers, municipal officials and environmentalists hope to persuade a judge… Continue reading

Sub-Lt. Jeffrey Delisle arrives at Nova Scotia provincial court for a sentencing hearing in Halifax on Friday, Feb. 1, 2013. THE CANADIAN PRESS/Andrew Vaughan
Canada’s spy-catching system caused delay, angst in Delisle case: former FBI official

OTTAWA — The U.S. Federal Bureau of Investigation’s former head of counter-intelligence… Continue reading

People wait to be screened before entering Little Mountain Place, a long-term care home that has had 41 residents die since a COVID-19 outbreak was declared at the facility in November in Vancouver on Sunday, January 3, 2021. Staff in long-term care homes across Canada are struggling to isolate elderly residents with dementia during COVID-19 outbreaks, accelerating the deadly spread of the virus, experts say. THE CANADIAN PRESS/Darryl Dyck
Care home staff struggle to isolate dementia patients during outbreaks: experts

VANCOUVER — Staff in long-term care homes across Canada are struggling to… Continue reading

A passer by walks in High Park, in Toronto, Thursday, Jan. 14, 2021. This workweek will kick off with what's fabled to be the most depressing day of the year, during one of the darkest eras in recent history. THE CANADIAN PRESS/Chris Young
‘Blue Monday’ getting you down? Exercise may be the cure, say experts

This workweek will kick off with what’s fabled to be the most… Continue reading

Winnipeg Jets' Blake Wheeler (26) just misses the net against goaltender Laurent Brossoit (30) during  scrimmage at their NHL training camp practice in Winnipeg, Wednesday, January 6, 2021. THE CANADIAN PRESS/John Woods
Jets return to practice a day after suspending workouts due to COVID concerns

WINNIPEG — The Winnipeg Jets have returned to practice a day after… Continue reading

Most Read