{"id":268321,"date":"2025-11-07T18:48:08","date_gmt":"2025-11-07T18:48:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/268321\/"},"modified":"2025-11-07T18:48:08","modified_gmt":"2025-11-07T18:48:08","slug":"liberals-pressed-after-fitch-says-budget-weakens-canadas-credit-profile","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/268321\/","title":{"rendered":"Liberals pressed after Fitch says budget weakens Canada\u2019s credit profile"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Prime Minister Mark Carney, centre, with Finance Minister Fran\u00e7ois-Philippe Champagne on Tuesday tabled the government’s first budget, which calls for more than $140-billion in new spending.Spencer Colby\/The Canadian Press<\/p>\n

Liberal ministers were challenged in Question Period on Friday after the Fitch rating agency said this week\u2019s budget weakens Canada\u2019s credit profile.<\/p>\n

The ratings agency issued a statement Thursday afternoon that said the budget \u201cunderscores the erosion of the federal government\u2019s finances\u201d and that \u201cpersistent fiscal expansion and a rising debt burden have weakened its credit profile and could increase rating pressure over the medium term.\u201d<\/p>\n

Fitch downgraded its credit rating for Canada from AAA to AA+ in June, 2020, amid a period of record deficits during the pandemic. <\/p>\n

The two other major credit rating agencies, Moody\u2019s and S&P, have maintained their AAA rating for Canada.<\/p>\n

Conservative MP Mike Lake raised the issue Friday.<\/p>\n

Liberals appear poised for possible omnibus bills for 75 legislative changes<\/a><\/p>\n

\u201cThis has happened before, with crushing impact on Canadians. In the \u201990s, after similar rating pressure, the Liberal government of the day was forced to cut 32 per cent from federal health and social transfers over just two years. Does anyone over there understand the gravity of this situation?\u201d he asked.<\/p>\n

Natural Resources Minister Tim Hodgson responded.<\/p>\n

\u201cAs somebody who spent much of his life in the banking community, let me tell him about the S&P and Moody\u2019s ratings, which are triple A, the best in the entire world,\u201d he said. \u201cWe\u2019re doing just fine.\u201d<\/p>\n

The Liberal government survived<\/a> its first confidence test on the budget Thursday evening. It will face a second confidence vote Friday afternoon.<\/p>\n

The House of Commons will vote on a Bloc Qu\u00e9b\u00e9cois motion calling on MPs to reject the Liberal budget because it \u201cwill hurt Quebec\u201d by failing to act on a list of issues the Bloc has listed as priories, including higher health transfers, Old Age Security payments and stronger action to combat climate change.<\/p>\n

The process of approving the budget involves debate on a government motion, as well as on an amendment and a sub-amendment. <\/p>\n

Bloc Leader Yves-Fran\u00e7ois Blanchet moved the amendment. The Bloc said they were able to do so because Conservative Leader Pierre Poilievre forgot to move an amendment Wednesday after his budget speech.<\/p>\n

Doug Saunders: Carney\u2019s confusing budget exemplifies the politics of quadrangulation<\/a><\/p>\n

The Conservatives moved a sub-amendment Thursday that proposed to replace the Bloc\u2019s wording with the Official Opposition\u2019s priorities. That Conservative motion was defeated in a 198-139 vote Thursday evening.<\/p>\n

Government House Leader Steven MacKinnon\u2019s office had declared earlier in the day Thursday that both votes would be confidence votes because they call on the House to reject the budget.<\/p>\n

Tuesday\u2019s budget outlined a plan for more than $140-billion in new spending over five years, partly offset by about $60-billion in internal savings.<\/p>\n

The debt as a percentage of GDP will rise slightly to 43.1 per cent next year, up from 42.4 per cent in the current fiscal year and stay around that level over the following three years.<\/p>\n

While Ottawa frequently boasts that its federal net debt-to-GDP ratio \u2013 which takes into account assets held by government pension funds \u2013 compares well with international peers, the Fitch statement highlights Canada\u2019s gross debt.<\/p>\n

Fitch said Canada\u2019s general government gross debt, which includes other levels of government, will reach 98.5 per cent of GDP by 2027, up from 88.6 per cent in 2024.<\/p>\n

It said this is nearly double the forecast median of other countries with AA ratings. <\/p>\n

The ratings agency also pointed out that the budget moves the government away from past pledges to reduce its net debt-to-GDP ratio and to keep the deficit at no more than $40.1-billion.<\/p>\n

Instead, the government now says it will reduce the deficit-to-GDP and balance its operating budget.<\/p>\n

\u201cGiven that these rules are non-binding and prior versions have been ignored, federal finances run a high risk of further deterioration,\u201d Fitch said.<\/p>\n

With a report from Emily Haws<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Prime Minister Mark Carney, centre, with Finance Minister Fran\u00e7ois-Philippe Champagne on Tuesday tabled…\n","protected":false},"author":2,"featured_media":268322,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[1397,45,49,48,714],"class_list":{"0":"post-268321","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-appwebview","9":"tag-business","10":"tag-ca","11":"tag-canada","12":"tag-politics"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/268321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=268321"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/268321\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/268322"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=268321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=268321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=268321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}