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There is a very good chance that the need for more massive federal assistance for the provinces, households and the business sector will trigger a downgrade in Canada’s credit at some point soon.

It may be true that the federal government went into this mess with a seemingly well contained debt-to-GDP ratio of 31 per cent, but for the entire economy, at all public and private sector levels, that ratio is an unprecedented 350 per cent. Canada in aggregate doesn’t have a AAA-rated balance sheet to begin with and now Ottawa has to somehow shoulder a good chunk of these liabilities.

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In the end, it doesn’t matter what the rating agencies do, as we saw with the inconsequential U.S. debt downgrade in the summer of 2011. It has to be remembered that prior to 2002, the Canadian federal government was frequently rated as an AA- credit by at least one of the major agencies. I’m not sure anyone cared or even noticed … as much as it may be a source of national pride.