Good News, Canada!

There are those Canadians who fear the worst will claim our national economy, and there are those - greater in number - who take comfort from the fact that we're in fairly fine economic fettle, despite fears to the contrary. Canada will most certainly suffer some loss in economic activity, but we're in good overall shape, and we'll muster the patience to see us through a year of sluggish economic action, then cheer up when we're back on track.

We're encouraged by none other than the governor of the Bank of Canada, who assuages our worry by informing us that the "sky is not falling, the sky is still there". Nice; not all of us were rushing about like Chicken Little; the election campaign is over, we're settled down to waiting things out. For the truth is, as Mark Carney remarked: "We do not have the imbalances in our economy that other economies have going into this time of difficulty."

The difficulty of which he speaks representing rather an understatement of international financial distress. A real morass, a miserable and nasty mess brought to the global world of finance that has put its money on unfettered capitalism and its certain returns, thanks to a credit-enthusiastic America. You can have it all, you can have it now, and pay well...some time in the future, just don't worry about it.

And the future arrived, and while they had it now - whatever they wanted, whether or not it was reasonable and the acquirers capable of paying for it in the future - the present suddenly collapsed, all those acquisitory delusions of entitlement. And the facilitators went into a state of shock, that the inevitable - which had been forewarned, but that had elicited scorn from all those bankers - suddenly arrived.

All of a sudden Canadian homeowners, so critical of a Canadian government that wasn't nearly as helpful as the American one that allowed U.S. homeowners to deduct the cost of their mortgage payments from personal income tax, became appreciative of the fact that their government held stringent rules for the Canadian banking system. As a result, we're not going to experience anything resembling the American melt-down.

Our employment rates, incomes, wholesale and retail sales will remain in an acceptable range. This time around, we can be fairly comfortable in feeling that an American bout with pneumonia will result in a mere head cold for Canada. Rest and plenty of liquidity. The economic downturn caught the international money market by surprise, and stopped it cold in its tracks.

But Canada? A stronger labour market. We've more reasonable household and corporate balance sheets; we owe less than our American and international counterparts on credit. Our country's financial system is strong, and our government has stepped in to encourage access to financing where it's required, without indebting the entire country for an eternity.

We may see a downturn in consumer spending, but perhaps not a whole lot. The coming Christmas season will see Canadians intending to spend what they usually do, offering a leg-up to retail sales. Ironically, at a time when the Canadian dollar has dipped below $.80 U.S., American imports of Canadian products will be weak, but even so, the differential may help Canadian exporters in the short run.

So we're not chortling, that wouldn't be polite, nor very kind, but we're doing all right. We've been forecasted for slight GDP growth for this year and the next, but in 2010, we'll be up and away. And by then, so will the rest of the world. Rest easy.