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The S&P Ratings has recently announced that it affirmed Canada’s sovereign rating at ‘AAA/A+1’ and maintained its outlook at ‘stable’.

Key takeaways from the press release (via Reuters)

  • Stable outlook reflects expectation of moderate GDP growth, prudent fiscal stance, and a gradually cooling housing market.
  • High wealth, economic resilience, ample fiscal and monetary buffers should enable Canada to adjust to changing global economic conditions.
  • Cross-border production chains and investment should remain largely intact, regardless of developments related to proposed USMCA.
  • Small total deficits and large general government liquid assets will keep Canada’s net general government debt burden fairly low.
  • Canada maintains a strong external position, which could help soften the impact of potential domestic shocks.
  • Expects provincial housing policies, rising interest rates to work in unison to ease Toronto, Vancouver housing markets imbalances.
  • Announcement by GM to not allocate any production to Ontario-based Oshawa plant in 2019 to partly weigh on growth prospects.