

The Canadian Solution - jganetsk
http://www.newsweek.com/id/183670

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jacquesm
I've lived in Canada for 5 years, I have seen most of the country (that means,
wherever there are roads) on road trips.

Canada is poor, possibly very poor. On average the amount of money available
per square kilometer of land is low, lower than some 'real' third world
countries.

This means that outside of the bigger population centers the infrastructure
can be seriously lacking.

Trade wars with the US (under the guise of infected beef, logging rules and
whatever else the US can come up with to avoid real competition with
Canadians, and that all in spite of 'nafta')) have wrecked a good part of the
Canadian economy.

One reason Canadian banks are in such good shape is that they have a captive
audience, there is hardly any competition (there are very few banks in Canada
and they all have - coincidene ? - roughly the same tarrifs for their
services. They rip off their customers every chance they get, where else are
you going to go ?

Canadians are pretty much enslaved to their banks, I have no other words for
it. The amount of misery caused by those 'healthy' banks that I've seen first
hand is nothing short of unbelievable and I really would not wish the Canadian
banking system upon anybody.

~~~
gaius
The Canadian regulators are very reluctant to let Canadian banks or indeed any
financial services firms be acquired by foreigners. Monopolies (or
oligarchies) cannot exist without government support.

Not that they're in such great shape now, but Joe (or Jacques) Canadian would
probably be a lot better off if RBS, HSBC, Citibank and Santander had been
allowed to roll up the regional banks.,

~~~
chollida1
Can you give an example of what you mean by a regional bank?

I only know of the big 6 national banks and the credit unions.

~~~
r7000
National Bank (mostly Quebec)

Laurentian Bank (Quebec)

Canadian Western bank (Alberta, the West)

Vancity/Citizens (organized a bank outside of B.C.)

~~~
jacquesm
I've never even seen any of these, the only ones that I have seen are the 5
majors and the credit unions (which are good for very local affairs only).

How big are these compared to the 5 majors ?

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trevelyan
Worth pointing out that the fiscal accomplishments here are largely the
political legacy of the Liberal Party, which is significantly to the left of
the Democratic Party in the States.

Stephen Harper, the current Prime Minister, is much closer to Bush than anyone
else and is governing with 35% popular support. Many Canadians also find the
election of Obama inspiring given their government.

~~~
cperciva
_the fiscal accomplishments here are largely the political legacy of the
Liberal Party_

This isn't the right place for a debate about Canadian politics, so I'll just
say this and leave the topic here: There's considerable disagreement about
whether the Chretien/Martin Liberal government was responsible for the
country's strong fiscal situation or whether they merely reaped the benefits
of the policies (e.g., NAFTA and GST) put in place by the preceeding
Conservative administration.

~~~
pedalpete
Though I agree this isn't the venue to debate politics, I don't think there is
anything wrong with pointing out the politics in the situation, as long as we
are not arguing that one side is correct, and the other incorrect.

I think it would be irresponsible (and in some ways is on the part of Zakaria)
to not include the impact of Canada's social infrastructure which acts as both
a limit to growth, and is supportive in harsh times as these.

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patrickg-zill
Another "America is Wrong" post from someone who doesn't know what he is
talking about ... Zakaria didn't mention the CMHC or the recent $25 Billion
(in a country whose population is 1/10th the USA) in non-bailout bailout
money.

See <http://www.cbc.ca/money/story/2008/10/10/flaherty-banks.html>

Aside: Southern Ontario, especially, depends on Detroit for much of its
industrial base.

Along the Highway 401 corridor from Whitby/Oshawa area on to Windsor there are
many factories that produce one part or other that goes into your minivan.

It is reasonable to believe that Canada will only start feeling the effects
this year of the US spending slowdown.

In addition to that, with oil prices lower (affects Alberta mostly) and
construction down (affects Canadian lumber producers), one can expect that
Canada will see some of the same problems that are already affecting the USA.

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anamax
My rule for comparing two places is to look at what flows between them,
especially people.

This rule tells me that, on the whole, the US is a better place for people
than Mexico. It also says that CA is becoming less attractive than the rest of
the US.

Which direction is net-migration between the US and Canada?

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sanj
Mortgages in Canada differ in two more important ways:

1\. They are shorter term -- no longer than 7 years.

2\. They are always adjustable.

Both these items mean that banks can react much more quickly to market
changes.

~~~
chollida1
> 2\. They are always adjustable.

What do you mean here? I may just not be up on mortgage terminology but my
mortgage is a 5 year fixed. How is it adjustable?

~~~
sanj
My info my be stale, but I was under the impression that all mortgages offered
were adjustable in some way.

But it sounds like I'm wrong!

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lazyant
There's one inexactitude in the article: "Canada, by contrast, has no limit on
the number of skilled migrants who can move to the country", that's not true.

The government sets a goal number of skill immigrants every year and changes
the points needed accordingly. At the end the number of applications approved
are more or less the number planned.

I'm one of those skill-class immigrants btw.

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jsomers
Oh boy... regardless of the strength of the argument here, I'm going to be
sending this to virtually everyone I know.

\- a Canadian in America

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newt0311
Canada 2008 real GDP growth rate: 0.7%

US 2008 real GDP growth rate: 1.4%*

Whats the point of not having bank failures when you earn less? Or another way
to put it: whats the point of not loosing money if you don't have any to begin
with.

A more extreme example: During the 1930s, there was one notable country which
did not experience an economic depression. That country was the USSR. As it
had a command economy, the planners decided against a depression and that was
it. However, they could not allocate agricultural resources effectively and
had a famine instead. So, back then, it was very easy to say the the USSR is
great as it has no depression but whats the point when they have no _food_.

* Source: CIA world factbook (search google).

~~~
cperciva
You're right, Canada's GDP growth in 2008 was 0.7% less than the US GDP
growth. However in 2007, Canada's GDP grew by 2.7% vs. the US 2.2%; and the
IMF predicts that in 2009 the US GDP will fall by 1.6% while Canada's GDP will
only fall by 1.2%.

These numbers fluctuate from year to year, but if you look at the long term
trend, you won't see any significant difference between Canadian and US GDP
growth.

