Canada is at greater risk of losing its AAA credit rating than other top-rated countries if the government fails to show fiscal discipline, Royal Bank of Canada has warned on the eve of Finance Minister Chrystia Freeland’s new budget.
A downgrade has the potential to raise the borrowing costs across the economy, economist Rachel Battaglia said in a note. “Even though deeper deficits and higher associated sovereign borrowing costs may feel like a distant problem for many Canadians, the impact has the potential to trickle down to most households and businesses,” Battaglia wrote.
