Canada has a "range of measures" to deal with potential global economic troubles but could eventually be affected by Standard & Poor's downgrade of the U.S. credit rating, Finance Minister Jim Flaherty says.

"Canada is not an island," Flaherty said late Friday in a statement. "We are a trading nation, with about a third of output generated by exports and deep linkages with the U.S. economy.

"The global economic recovery remains fragile and this uncertainty may eventually impact Canada."

However, the finance minister also sought to offer reassurances, saying Canada is "well-positioned to face global headwinds, as it has done so successfully in the recent past."

It happened to us

In 1993, the Canadian Bond Rating Service downgraded the country's crediting rating from triple-A to AA-plus. Two years later, international ratings agencies followed suit.

But by 1999, Canada had eliminated its $42-billion deficit through a series of spending cuts and a robust economy, climbing back up to a triple-A rating.

Though the federal deficit has now climbed back to $55.6 billion, no agencies have threatened to cut the country's credit rating yet. 

"Our budgetary position is among the strongest in the world," he said.

Credit rating agency Standard & Poor's on Friday downgraded the U.S. debt rating from triple-A to AA-plus for the first time since the country won the top ranking in 1917. The move came after markets closed on Friday following a tumultuous week of trading over concerns about debt loads in the United States and several European Union nations, as well as unemployment figures in the U.S.

But Flaherty said that despite the continuing uncertainty, he found the latest job figures in the Canadian and  U.S. economies "encouraging."

G20 to hold emergency talks

In another development, G7 and G20 finance officials were expected to hold emergency talks over the weekend to discuss the crises in Europe and the U.S. Eurozone leaders fear the credit difficulties that forced Greece, Ireland and Portugal to seek international aid to meet their loan obligations are spreading to Spain and now Italy, the No. 3 economy in the monetary union. Both countries' long-term bond yields have risen to levels that will make it yet more difficult for their governments to repay their debts.

Elmer Kim, managing director of the Ontario investment firm Roynat Capital, said he believes S&P's downgrade of the U.S. credit rating comes 12 months too late.

Kim, a business panelist on CBC News Network, said Saturday he has been downgrading U.S. government debt for the past year.

He said one of the big problems in the U.S. is the division between how Wall Street is doing compared with Main Street.

"Wall Street is actually doing very well and, in fact, revenues and profits are excellent," he said. "And in America, domestic unemployment is extremely high. It's structurally broken and Americans in general are doing very badly."

Michael Hyatt, CEO of Toronto internet technology firm BlueCat Networks, said the downgrade leaves Canada as one of the remaining nations with a triple-A credit rating, which will likely make Canada more attractive to investors. Other countries with a triple-A rating from S&P include Germany, Britain, Austria, Denmark, Norway, the Netherlands and Australia.

Hyatt also predicted the U.S. downgrade will push the value of the loonie much higher in the coming year.