By: Daniel Nardini
No, I am not referring to Canada’s geographic position where it is truly north of everyone. I am referring to its economic standing with regards to the United States and the European Union. With the U.S. still mired in the Great Recession and the European Union looking like it may not survive, Canada seems to be a stable place. That sounds great (and for many Canadians it may sound “boring”), and it is great to an extent. This was not the case for Canada a generation ago. In the 1980’s, Canada’s banking system was out-of-whack, it suffered from inflation and high unemployment, and lack of jobs and poverty forced many Canadians to look for work in the United States and overseas.
Canada’s banking system was brought under strict control, and the banks were no longer allowed to spend more than they took in. They were not allowed to speculate in land or stocks, and the Canadian government made sure that the banks followed the law and the regulations put into place in the late 1980’s and early 1990’s to make sure that the banks did not make the same mistakes they did before the financial reforms. These financial reforms helped steer Canada back onto the road of stability and solvency. We must remember that Canada started all of this almost a generation before the Great Recession hit the rest of the world. These changes came at great cost to Canada, and this is why Canada is largely more stable compared to the rest of the United States and the European Union (or for that matter Japan).
Canada may have come a long way from where it started, but not everything is Graceland. Canada still has a 10.6 percent poverty rate (although this was reduced significantly from 15.8 percent in the 1980’s), although this compares favorably to America’s present 14.3 percent poverty rate. Canada’s unemployment rate, which used to be over 10 percent, is now 7.6 percent—below America’s 8.1 percent unemployment rate. Not bad but it could be lower. But most important of all, Canada has no national debt and prevented a meltdown of its mortgage property sector when America’s went down the drain. Many Canadians have since come back for work to Canada, although finding a job in that country is still difficult.
The real problem weighing down Canada is its dependence on the United States and the Americas. The downturn in trade and the American economy has not helped the Canadian economy do way better than it should be doing now. Also, the European Union’s stability has Canadians worried. Despite all of this, Canada’s economic outlook, while not great is at least not so dismal as America of the European Union. The hard lessons Canada learned a generation ago has done more than anything else to give the country the financial stability it needs in a very uncertain world. These are lessons we should be looking at.
Canada on Top of the World
By: Daniel Nardini
Canada’s banking system was brought under strict control, and the banks were no longer allowed to spend more than they took in. They were not allowed to speculate in land or stocks, and the Canadian government made sure that the banks followed the law and the regulations put into place in the late 1980’s and early 1990’s to make sure that the banks did not make the same mistakes they did before the financial reforms. These financial reforms helped steer Canada back onto the road of stability and solvency. We must remember that Canada started all of this almost a generation before the Great Recession hit the rest of the world. These changes came at great cost to Canada, and this is why Canada is largely more stable compared to the rest of the United States and the European Union (or for that matter Japan).
Canada may have come a long way from where it started, but not everything is Graceland. Canada still has a 10.6 percent poverty rate (although this was reduced significantly from 15.8 percent in the 1980’s), although this compares favorably to America’s present 14.3 percent poverty rate. Canada’s unemployment rate, which used to be over 10 percent, is now 7.6 percent—below America’s 8.1 percent unemployment rate. Not bad but it could be lower. But most important of all, Canada has no national debt and prevented a meltdown of its mortgage property sector when America’s went down the drain. Many Canadians have since come back for work to Canada, although finding a job in that country is still difficult.
The real problem weighing down Canada is its dependence on the United States and the Americas. The downturn in trade and the American economy has not helped the Canadian economy do way better than it should be doing now. Also, the European Union’s stability has Canadians worried. Despite all of this, Canada’s economic outlook, while not great is at least not so dismal as America of the European Union. The hard lessons Canada learned a generation ago has done more than anything else to give the country the financial stability it needs in a very uncertain world. These are lessons we should be looking at.