Canada needs to get its fiscal affairs in better shape to avoid further credit downgrades, the country's opposition leader said on Monday. 

Conservative Party of Canada leader Andrew Scheer told BNN Bloomberg's Amanda Lang that Canada needs to take better fiscal responsibility over the medium-term following Fitch Ratings Inc.'s downgrade of the country's AAA credit rating last week to AA+.

"[Fitch] pointed to the massive deficits that have been accumulated before the pandemic hit," Scheer said. 

"That ratings agency also said there's risk for further downgrade if Canada doesn't demonstrate to the lending community that it has a plan eventually to get back to a balanced budget." 

While Fitch said that Canada's debt-to-GDP ratio will likely stabilize over the medium term, it does expect the government's various measures aimed at keeping the country's economy afloat to raise Canada's debt to 115.1 per cent of GDP in 2020. That would be a substantial leap from an 88.3 per cent debt-to-GDP ratio in 2019.

Scheer cautioned that further downgrades could hurt Canada's ability to raise debt on favourable terms. 

"We've very cognizant in the short term. We need to get through the rest of this pandemic and support an economic reopening but if we don't, as a country or as a federal government, show a plan to get our books in order, we could see further downgrades and that's going to lead to higher borrowing costs." 

Scheer said the government could implement some measures to help steer the economy back to a balanced budget, suggesting removing inefficient spending to large corporations and increasing efforts on attracting foreign direct investment. 

"Canada will not be emerging from this pandemic all on its own," he said. "We will be competing with the U.S., Europe, Australia, Japan, every other country in the world that has experienced a shut down. The economic consequences of that are going to be [everyone] fighting to attract capital to those countries."