S&P confirms Canada\'s AAA rating

Standard & Poor\'s confirmed Canada\'s top-flight triple-A debt rating Monday, citing its economic strength that can weather the problems of the US economy to which it is closely tied. \"In our view, Canada\'s chief credit strengths include the effectiveness, stability, and predictability of its policymaking and political institutions, the resilience of its economy, and the strength of its monetary and fiscal flexibility,\" S&P said. About three-quarters of Canadian goods exported and about half of goods imported are traded with the United States, and Canadian financial markets are deeply interconnected with US ones. But many of the trade linkages are between companies, notably in the auto industry, \"somewhat mitigating\" the risk of relying so heavily on a single trading partner, the rating firm said. \"Standard & Poor\'s base case is that the US economy will continue to grow weakly but avoid an extended double-dip recession, sustaining Canada\'s principal source of external demand and contributing to its growth prospects,\" said S&P analyst Nicola Swann. And \"Canadian authorities have a strong track record in managing economic and financial crises and delivering economic growth,\" he said. Standard & Poor\'s delivered the United States its first-ever credit downgrade -- cutting it one notch to AA+ -- in August 2011, citing political deadlock over the deficit. France, a major trade partner with Canada, lost its AAA credit rating with S&P in January 2012. S&P highlighted that during the recent global financial crisis and recession, no Canadian financial institution needed a government capital injection. In almost every year of the 2007-2011 period, Canadian economic growth surpassed that of the neighboring United States, the world\'s biggest economy. S&P also cited Canada\'s low current account deficits and active trading in the Canadian dollar. Government debt was forecast to peak at 54 percent of gross domestic product this year before falling below 50 percent in 2015. And Ottawa has said it expects to return to surplus budgets by mid-decade.