Common-sense Canada finds favour
Prominent U.S. pundit praises banks, tax system, immigration
Canada's unsexy virtues -- a prudent banking system and fiscal responsibility in government -- are lavishly praised in the latest Newsweek magazine.
Aboot time, too!
And our dullest national trait -- common sense -- is singled out by influential Newsweek editor and columnist Fareed Zakaria as "the genius of the Canadians."
Such praise from a prominent American has us blushing right down to our sensible shoes. It's enough to make you celebrate with a bag of parsnip-flavoured chips, even though Hockey Night In Canada isn't on tonight.
Mr. Zakaria claims that Canada is in good shape to withstand the recession because it did not follow the U.S. and Europe, which loosened regulations on their financial industries over the past 15 years.
"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," he writes in a column.
"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."
Canada has been protected from the worst of this crisis because its housing prices have not fluctuated as wildly as those in the United States, he points out. "Home prices are down 25 per cent in the United States, but only half as much in Canada. Why? Well, the Canadian tax code does not provide the massive incentive for overconsumption that the U.S. code does: interest on your mortgage isn't deductible up north. Ah, but you've heard American politicians wax eloquent on the need for these expensive programs -- interest deductibility alone costs the federal government $100 billion a year -- because they allow the average Joe to fulfil the American Dream of owning a home. Sixty-eight per cent of Americans own their own homes. And the rate of Canadian homeownership? It's 68.4 per cent."
Mr. Zakaria goes on to suggest that Canada is well positioned to take advantage of the global downturn.
"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," he gushes. "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."
Remember how Mom and Dad talked so much about responsibility? Canada has that going for it, too, says Mr. Zakaria.
"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 per cent of GDP, versus 15.2 per cent 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."
Mr. Zakaria also says the U.S. has "a brain-dead immigration system," compared with Canada's far-sighted immigration policy. While the U.S. kicks out thousands of talented grad students who want to stay and work in that country, Canada welcomes these talented migrants through its Skilled Worker Visa program.
"So the brightest Chinese and Indian software engineers are attracted to the United States, trained by American universities, then thrown out of the country and picked up by Canada -- where most of them will work, innovate and pay taxes for the rest of their lives."
Clearly, President Barack Obama should pay close attention when he visits Canada next week.
"If President Obama is looking for smart government, there is much he, and all of us, could learn from our quiet -- OK, sometimes boring -- neighbour to the north," concludes Mr. Zakaria.
We haven't felt this special since Robin Williams sang Blame Canada on the Oscars.
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It is Common sense Principles and Values that help prevent making stupid risky decision.
It is common sense policies (taxes and spending) the builds an economy.
I do not think the US Congress has yet figured it out...they continue spending without regard.
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