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Canadian Economy: Not as bad as you may think!

Sun, 22nd February, 2009 - Posted by Sean Kavanagh

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.

Canada has also been shielded from the worst aspects of this crisis because its housing prices have not fluctuated as wildly as prices in the United States. Home prices are down 25 percent in the United States, but only half as much in Canada.

The Canadian government 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 an economic recovery from a strong position.

The February 2009 article in Newsweek magazine also points to the ‘brain-dead immigration system’ that the U.S. employs that further distances the two countries as we look at rebuilding our damaged economies. Due to the tight immigration and green card distribution policy, large companies have been forced to train foreign nationals to work in Canada. For example, in 2007 Microsoft, frustrated by its inability to hire foreign graduate students in the U.S., decided to open a research centre in Vancouver. This allowed Microsoft to attract the brightest and most talented Chinese and Indian software engineers, train them in American universities, then send them to Canada to work. Not only will Canada benefit from increasing its intellectual capital, it will gain all the income tax revenues from the increased work force.

For more information on buying or selling real estate in Burlington or Oakville, Ontario, if you have questions about current market trends, or mortgage and interest rate information, please visit me again on my website www.seansells.ca or call me at 905-220-9198 and I’d be glad to answer any questions to accommodate all of your real estate needs.

Sean Kavanagh

Category: Market Updates

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