The Globe and Mail reports in its Saturday edition that the Liberal government survived a second confidence vote on the budget, but faced challenges in Question Period after Fitch Ratings warned that Ottawa's spending plan undermines Canada's credit profile. The Globe's Bill Curry and Emily Haws write that the budget highlights the deterioration of federal finances, with persistent fiscal expansion and rising debt weakening its credit profile, potentially increasing rating pressure in the medium term. Fitch downgraded Canada's credit rating from AAA to AA+ in June, 2020, amid record pandemic deficits. However, Moody's and S&P Global still maintain their AAA rating for Canada. John Fragos, spokesman for Finance Minister Francois Philippe Champagne, addressed the Fitch report by citing the International Monetary Fund's recent statement that Canada's finances are among the best in the G7.
The budget plan includes over $140-billion in new spending over five years, offset by about $60-billion in savings. The debt-to-GDP ratio is expected to rise to 43.1 per cent next year, up from 42.4 per cent, and will remain around that level for the next three years. The Prime Minister said Canada is in a strong fiscal position.
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