Oh, Canada

Grant Havers writes:

As we all struggle through this horrendous economic crisis, it is worth noting that not all nations have experienced equal doses of pain. As Fareed Zakaria has recently observed, Canada’s economy is in relatively good shape. What are the reasons? Here are some quick Canadian facts, free of charge:

1) Canada has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. In 2008, the World Economic Forum ranked Canada’s banking system the healthiest in the world. America’s ranked 40th, Britain’s 44th.

2) 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.

3) Home prices are down 25 percent in the United States, but only half as much in Canada because the Canadian tax code does not provide the massive incentive for overconsumption that the U.S. code does: interest on mortgages isn’t deductible up north. In addition, home loans in the United States are “non-recourse,” which basically means that if you go belly up on a bad mortgage, it’s mostly the bank’s problem. In Canada, it’s yours.

4) 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 insolvent Social Security. Its health-care system is cheaper than America’s by far (accounting for 9.7 percent of GDP, versus 15.2 percent in America), 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.

To be sure, not all is rosy up in the Great White North. Our most populous and industrialized province, Ontario, recently became a “have-not” polity. Due to the ailing automobile industry, which is the bedrock of Ontario’s economy, the province is now eligible for “equalization payments” from the federal government to help it get through this recession. Additionally, the historic status of Canadians as hewers of wood and drawers of water (and of course pumpers of oil) has left our economy particularly vulnerable to falling commodity prices. Nevertheless, a certain free-spending liberal Democrat might learn a thing or two from the impressive fiscal record of a country often mocked by “progressivist” politicians for having the Queen of England as its head of state.

Of course, there has been no "Queen of England" since Queen Anne. And for the present purpose, Her Majesty is the Queen of Canada.