Standard & Poor's reaffirmed a top credit rating for Canada, saying the country should make only a brief foray back into deficits.

Canada, with its triple-A rating, has a diverse economy, stable public policy and sound financial sector, S&P said in a report written by analysts in Toronto and New York City, and released Tuesday.

"In our opinion, the Canadian financial sector has weathered the current global financial turmoil well to date."

S&P also said federal government spending deficits of between one and two per cent of gross domestic product are expected in 2009 and 2010 as the country emulates the actions of other highly rated governments to boost their economies.

Regardless of which federal party eventually ends up controlling the reins in Ottawa, S&P believes the country will be back to a balanced budget by 2011.

"Like the other four 'AAA' rated G7 sovereigns [U.S., U.K., France and Germany], we believe that Canada has the political capacity and will to respond quickly to changing conditions, and it has a relatively diversified economy," S&P said.

"It also has a stable financial system, and is the only of the five that entered the current crisis in fiscal surplus on a general government basis.

Much worse-than-expected fiscal deterioration, as a result of either sharp divergence from the macroeconomic conditions we have assumed, or as a result of large, negative financial sector surprises, would be required to place pressure on the rating on the government," the rating agency concluded.