The Canadian Century?
by Nathan Vardi, Forbes.com
Tuesday, February 16, 2010provided by
In 1904 Canadian Prime Minister Wilfred Laurier made this prediction: "The 19th century was the century of the United States. I think we can claim that it is Canada that shall fill the 20th century."
Maybe Laurier was just a man 100 years before his time. As the world assembles in Vancouver for the Winter Olympics, the 21st century is shaping up great for Canada.
For starters, Canada has avoided many of the problems that currently bedevil the U.S.—mountains of public debt, a banking system in crisis, the housing debacle and a weakened currency.
Canada's banking system, essentially made up of the Royal Bank of Canada and four other big banks (Yeah! TD Canada Trust is one of them!!), remained strong during the global credit crisis. With no bailouts, it is the soundest system in the world, marked by a steady and responsible continuation of lending and profits. "Canada has shown itself to be a pretty good manager of the financial system," U.S. President Barack Obama said amid the financial crisis. Was that a touch of envy in his voice?
And it is not just banks that have remained solvent. Canada, with its relatively small population of 34 million, has the lowest debt burden of any G8 country and less than half the per capita debt burden of the U.S.
Bill Gross, who runs Pimco, one of the world's biggest bond managers, recently said that he thinks Canada is the best bet for investment among developed nations. "It moved toward and stayed closer to fiscal balance than any other country," said Gross.
In addition, the Canadian economy, the world's 10th biggest, is endowed with natural resources increasingly valuable in this century—like potash and uranium. New technologies allow for the vast development of the Athabasca tar sands in Alberta, helping make Canada's oil reserves the world's second largest. Yes, there are environmental implications, but Canada is now the biggest supplier of crude oil to the U.S., a lucrative—and enviable—position for any country.
Even global warming seems to be playing in Canada's favor. Melting Arctic ice poses serious concerns globally, but it has also opened northern sea lanes for the first time, as well as the opportunity to search for new natural resource deposits.
The result of this mix of fortune and fiscal prudence: a relatively strong Canadian currency. The loonie has soared against the hobbled U.S. dollar so far this century. That strength has been a problem for Canadian exporters to the U.S., but it is also a source of national pride—and relief—as Canadians watch the financial flailing of their neighbors to the south.
The world is taking note. Canada just hosted the G7 finance meeting way up north in Nunavut and will host both the G8 and G20 conferences later this year. Most important, Canada has welcomed the world to the Winter Olympics in Vancouver and is showing off its accomplishments. Laurier would be thrilled. But not surprised.
http://www.forbes.com/2010/02/11/canada-olympics-economy-business-sportsmoney-canada_slide_11.html
I hope you’re enjoying the Olympic celebrations!
Warm regards,
Evon
