Does Canada still deserve its AAA credit rating?

While it's unlikely that Canada would lose its AAA rating with this year's federal budget, the country shouldn't be complacent about threats to long-term prosperity, writes Charles St-Arnaud. Photo by Peter J. Thompson/National Post/Postmedia files

Canada is part of the highly select club of 10 countries that hold AAA sovereign credit ratings from both S&P and Moody’s, a mark of outstanding fiscal credibility and near-zero default risk. However, it has not always been the case. Canada only regained its pristine credit rating in the early 2000s, after losing it in the early 1990s due to persistent, sizable fiscal deficits and ballooning debt levels.

The upcoming federal budget is likely to show bigger fiscal deficits, at their highest levels in recent memory outside of recessions