Canada AAA on the Line as Oil Crash Hits Provincial Coffers

Canada’s stellar credit rating is being put to the test as the oil crash and recession expose the country’s weak link: its provinces, Bloomberg News reported. Among the Group of Seven countries, only Germany and Canada have AAA ratings from S&P Global Ratings. But as pressure rises on the government of Justin Trudeau to aid provinces and key industries, Canada’s fiscal position is looking shakier. Going into the Covid-19 crisis, Canada’s provincial governments had C$853 billion ($602 billion) of debt securities outstanding, more than the national government. They also shoulder most of the cost for health care and eduction. Several of them rely on energy revenues that are evaporating. Oil-rich Alberta released a budget in February based on West Texas Intermediate prices of $58 a barrel. Its deficit projections crumbled within days. Read more