Fareed Zacharia of CNN has written an article for February’s Newsweek that is a must read for all Canadians, especially our “naysayers”. It is in the US Edition and is called a Worthwhile Canadian Initiative. It is an outsider’s view of the Canadian Banking system and the Canadian Economy in general. I suggest you have a read and make sure that it gets around. It is time we were less insecure about our position in the World.
However, I am not a total “pollyanna”. We are definitely in a recession in Canada, however, unlike the naysayers I don’t see us going down the road that the US has travelled, especially in housing. In the States, they talk about the absorption rate of the Housing stock. With the exception of the Toronto Condo Market, if all proposed buildings moved ahead, and they wont, we do not have anywhere near the stock of Housing that exists in the United States. Even though we have had job losses, mortgages have only been available to Canadians with a 31 to 33% Gross Debt Service ratio. In the United States, the GDS ration was once 60% (because of Mortgage deductibility) and now the American lenders are moving to the Canadian standard.
For too long Canadians feel that if it happens in the States, it will happen here. Sometimes your next-door neighbors have different issues, values and goals than you and are more frivolous with their finances. It does not mean that what happens in their home will be repeated in yours and we should stop that assumption.
Read the article and pass it around and if you would like a real eye opener read Leonard Brody’s, Everything I Needed to Know about Business– I Learned from a Canadian
By Leonard Brody, David Raffa, Inc NetLibrary