Canada's credit rating is in trouble due to the Carney budget

Fitch Ratings issued a statement on November 6, 2025, directly addressing Canada's federal Budget 2025, which was tabled in Parliament on November 4, 2025

By -- Tom Quiggin—— Bio and Archives--November 7, 2025

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Canada's credit rating is in trouble due to the Carney budget.

Fitch Ratings issued a statement on November 6, 2025, directly addressing Canada's federal Budget 2025, which was tabled in Parliament on November 4, 2025.

In their analysis, Fitch described the budget as underscoring the erosion of the federal government's finances, noting that persistent fiscal expansion and a rising debt burden have weakened Canada's credit profile (rated AA+ with a Stable outlook). They highlighted risks from economic underperformance due to tariff threats and structural issues like low productivity, which could increase rating pressure over the medium term.

This follows Fitch's earlier July 2025 warning about potential credit downgrades if deficits and debt-to-GDP ratios rise significantly, concerns that the new budget's projected C$78.3 billion deficit for 2025-26 (up 116% from the prior year) appears to exacerbate.

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