Oh Canada.

Thursday, February 12, 2009
Fareed Zakaria in Newsweek writes:
Now there is even more striking evidence of Canada's virtues. Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th, Britain's 44th.

Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn't grown in size; the others have all shrunk.

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking.

Canada has been remarkably responsible over the past decade or so. It has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike our own insolvent Social Security. Its health-care system is cheaper than America's by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; "healthy life expectancy" is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America's largest car-producing region.


Well, look at that.
And being Canadian, we won't even know what to do with that kind of praise.

Read the whole piece here.


  1. "And being Canadian, we won’t even know what to do with that kind of praise."

    Appropriately, Pop open a Labatt's or a Canadian Ice Wine, me thinks. :o)

  2. Yay for common sense.
    It does seem that despite the doom and gloom of some prognosticators Canada may weather this recession without another Dirty Thirties style depression.

  3. Yes, I'm glad we are in the position we are. Much could happen yet, but I'll take this conservative attitude (small-c conservative in this usage for the record) any day. It has severed me, and our conutry, well so far.

    Why are the Liberals the naturally governing party again?

  4. Congrats guys. I wish this country had been a little more conservative and a little less eager to follow your southern neighbours so foolishly. In so many ways.


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