In Canada, a quick, strong economic recovery
This week I’ll be traveling in Canada, talking with experts, business owners, and workers about the surprisingly strong recovery that Canada has experienced following the Great Recession.
Over the last five years, Ontario and Quebec have actually grown jobs. People I’ve spoken to so far credit better government. Canada’s strong bank regulatory scheme prevented big failures.
In fact, not a single bank failed in Canada, during a time when hundreds of American banks were toppling.
And there is no mortgage crisis here. While US homeowners face down a tsunami, fewer than 1% of Canadian mortgages are in arrears.
But there’s also a sense that Canada’s strong economic performance transcends this moment of turmoil.
When you compare the struggling towns across northern New York with their counterparts the Canadian side of the St. Lawrence River, it’s hard not to see a growing gap in vitality and private investment.
And when you match booming Kingston, Ottawa and Toronto with comparable American cities in the region — Buffalo, Detroit, Chicago — you see growth on the Canadian side and contraction in the US.
So here’s the question:
If southern Ontario is building a stronger, more diversified economy than the North Country, what are they doing that we can emulate?
What’s happening here in Kingston — where I’m writing this blog post — that allows the population to grow and new businesses to open?
And can those ideas be copied in Watertown, less than two hours away?
Both communities sit in beautiful areas. Both have prisons and big military bases providing a foundation for the local economy. But Kingston is clearly pulling away, offering its citizens more opportunities, more prosperity.
How come?
Tune in this week as we talk about the very different political and economic climate in Canada — what is it that’s making a difference? And as always, share your ideas below.
One big advantage Canadians have is they don’t need to worry about health care.
They didn’t deregulate their banks, so they didn’t go through the housing and finance bubbles, so their banks didn’t lose all interest in lending money at reasonable interest rates, so small businesses can still borrow the money they need to operate, so their economy is healthy, just like ours would be if we hadn’t pursued unregulated free-market madness for forty years.
And, as Pete says, their health care system isn’t half the drag on their economy that ours is.
The basis of their relative stability is in the housing market. Just like our “instability” was/is in our housing market. Unlike here in the US in Canada they only sell homes to people who can afford to buy them (25% down). When you do that you don’t have to worry about foreclosure. I still see these crazy ads for “no credit check loans”. Live and learn.
Unfortunately, the things people have mentioned above (healthcare and financial regulations) are handled at the federal level.
The first two posts say it all. Get health care costs off the backs of small and large businesses and create a regulated banking system that actually profits from a thriving business sector instead of the gambling casino mentality that it currently operates under, and watch the magic of capitalism work once again.
Canada’s economy is evidence of what our economy could be if it’s control wasn’t in the hands of multi-national banks, for profit insurance companies, and for profit defense contractors.
Canada has a wealth of natural resources with a much smaller population than ours to do the jobs needed to extract those resources and to enjoy the money generated by those resources. Canada still has a bit of the frontier feel that Alaska also has, of a place where wages are high, even in menial jobs, because there is not a whole lot of competition for jobs. And Canadians seem a bit more sane than Americans, I’m not sure why.
Canadians greater sanity is a favorite topic of mine, One major reason is that Canada was founded substantially by two European groups: French, in Quebec, and former American Colonials, in Ontario. This later, but dominant group was mostly driven or scared out the Colonies by our ancestors during our War for Independence because of their loyalty to the British Crown. In nearly all cases, Loyalist land, as well as all the property they could not carry with them, was confiscated by local or state governments (the New Hampshire militia that fought at the Battle of Bennington was paid for with funds from seized and auctioned Loyalist property). A recent book I heard reviewed on C-Span strongly asserted that the Patriots of Boston, were, in fact thugs in the employ of merchant-smuglers. Those who stood up for the law the King against Revere, S. Adams, & Co.,, often ended up sailing away to Canada with the British fleet. Most never returned.
In other words, Canada was founded by exiled Americans dominated by notions of security, loyalty to the government, and stability. The United States was founded by a people (including nearly all my ancestors) strongly influenced by a bold, restless, and ruthless individualism that saw the law as substantially a means to self-advancement, with little regard to the welfare of others.
This culture led to unprecedented accomplishments and terrible injustices (e.g., neither slavery nor serious Indian Wars were found in Canada) and a tendency for risk taking on our side of the border, while Canadians retain a much higher level of civility and respect for order lawfulness. Hockey, or course excepted.
These cultural traits have come home to roost in our frontier spirit-induced recession, and Canada’s immunity to it.
Newt: Interesting! I enjoyed reading your post. It left me wondering with this question: With the minority population growing in this country like it has, how does their cultural traits enter the overall picture?
Gary-
Thanks for the compliment.
I’m more of a historian than a sociologist, and the scope of your topic is, of course, huge.
Historically, I think it is a commonplace that immigrants from Eastern and Central Europe in the massive immigration of a hundred years ago had tremendous impact on our political culture, and overall culture. In addition to bringing in millions of new Catholics and Jews, there is a belief that these groups were much more inclined to communal, rather than individualistic social beliefs, which contributed to greater support of social welfare programs. To grossly oversimplify.
As for more recent waves of immigrants, both Hispanics and Asians seem to be contributing heavily to overall cultural change, less so to political change. They seem mostly to want to fit in and get along, and receives rights and opportunities of other citizens. Hispanics’ one impact seems to be mostly limited to attempt protect their undocumented fellows from assaults from our nativist fellow citizens. Not much insightful here, I’m afraid.
To me, the really interesting thing is the persistence of our original cultural traits over 400 years. Sen. Jim Webb wrote a wonderful book, “Born Fighting”, about the Scots Irish and their tremendous, and largely unsung, influence on our history. Webb shows how they not only gave us many of our famous fighters, most notably Andrew Jackson, but also country music, and a lot of Southern culture and politics. A broader treatment that I have not read, but want to, is “Albion’s Seed”, can’t recall author, about the waves of immigration from the British Isles, and their impact.
Newt – what about all the immigrants now in Canada?
Canada also has to figure out how to refine all the oil that they are going to get in Alberta since we won’t let them send it to our refineries on the gulf coast.
Also remember turning around Canada’s economy is like turning around a small power boat. Turning around an economy like ours is like turning around an air craft carrier!
Peter-
Three things I know about immigrants in Canada
1. In the “sample” Quebec Independence Referendum in the 80s, it was Montreal immigrants that made the difference that defeated the referendum and, possibly, prevented the secession of Quebec.
2. When you are sitting in a cafe in Montreal or Toronto, it is very difficult to predict the ethnicity of the next person you see come around the corner, and nobody seems to care.
3. There is, or used to be, a comedy on the CBC called “Little Mosque on the Prairie.”
“Canada still has a bit of the frontier feel that Alaska also has, of a place where wages are high, even in menial jobs, because there is not a whole lot of competition for jobs. ” hmm Will Doolittle can’t be referring to Montreal, Toronto, or any of the other large Eastern Canadian cities. If the wages are high it is most likely because the minimum wage is higher and the unions are stronger, not because of lack of competition. I will however readily agree with the statement “Canadians seem a bit more sane than Americans”.
Watertown is not a fair comparison, its population is much smaller than Kingston- almost 1/5th excluding Fort Drum which is a or the major economic driver. Syracuse is about the same size as Kingston. Also Watertown is not a lakefront town with associated development.
Ontario’s forest products industry is substantially depressed. When the Canadian products don’t come south, logs don’t go north.
Smith Falls Ontario lost Hershey Chocolate to Mexico. To “globalism.”
I need more information about what businesses they are growing.
The more socialist nature of the country is a significant difference in development planning.
“Also remember turning around Canada’s economy is like turning around a small power boat. Turning around an economy like ours is like turning around an air craft carrier!”
I couldn’t agree more!
But this is an interesting comment from someone who consistently says that the economic problems created in 8 years by Bush should have been resolved in 2 years by Obama.
Dave, There is nothing inconsistent in this comment. True, I have consistently said that this president has interfered with the “righting” of the ship. That has slowed progress in many cases. This latest effort to put off a decision on allowing Canadian oil to flow to the gulf until after the 2012 election is a very good example of putting politics before ahead of everything else. The president doesn’t cause the problems like you suggest with Bush but they can and do interfere with the resolution of the problem in many cases.
Paul,
I would agree that Obama’s decision on the pipe line is somewhat politically motivated. However, there’s a part of me, job creation or no job creation, that agrees with some of the concerns about where and how this pipe line will be built. If anyone has ever truly researched the process of capturing crude oil from tar sands, then I’d bet they’d have some concerns as well. It’s a dirty, toxic, water consuming process that leaves behind all sorts of environmental degradation and little actual net energy gain.
Why on earth do we want to not take our time on such a pipeline development process that ultimately puts our own water resources in jeopardy (given the pipe line is proposed to be built over major western aquifers)? What’s the rush in other words? Are we running out of crude oil for the Texans to refine? Or is this an attempt to shove through yet another project to primarily benefit big oil under the guise of job creation? I’m just asking…..
Clapton, I agree time needs to be taken for a project like this. It is my understanding that it has been very well researched at this point. If the current administration thinks that it should not be done they should say so now. Leadership sometimes means that you have to take a stand that some voters may not like.
Paul, your past comments were that the economic problems now belong to Obama because he has been in office for X amount of days.
Your new comments are that the US economy is a large complicated economy and turning it around is not easy… and that the US President can not cause economic problems.
Those are three contradictory positions. I’m sure they sounded good when being written by themselves, but they make no sense when considered together.
It reads like this: 1. After a year or two this is now Obama’s economic problem 2. But it takes a long time to turn the ship around 3. And President’s don’t cause economic problems anyway.
You are right about #2 at least.
The large population of the USA vs the small population of Canada as a possible reason for Canada having a better economy is interest for the following reason.
I have a nephew who is living in Australia and he reports Australia isn’t having the economic problems we are having.
Australia like Canada is a large country with a small population and with most of its population, also like Canada, living in or very near to metropolitan areas.
Perhaps Canada and Australia share something else in common. Maybe with fewer people they appreciate their people more? Maybe we have developed an attitude that since people are a dime a dozen it doesn’t matter if some fall through the cracks and then say, “Good riddance” to those lazy scum.
Interesting that the Australia similarity was brought up in Pete’s post.
Do you suppose either Canada’s or Australia’s approach toward resource extraction contributes to their economic recovery/stability?
Uh, Pete, by all appearances, practically ALL major countries appreciate their people more than we do ours. You have to look at banana republics to find countries that care less about their people than we do.
“If you don’t believe your country should come before yourself, you can better serve your country by livin’ someplace else.”
Stompin’ Tom Connors
“Paul, your past comments were that the economic problems now belong to Obama because he has been in office for X amount of days.”
They do, that is obvious.
“Your new comments are that the US economy is a large complicated economy and turning it around is not easy
It is.
“that the US President can not cause economic problems
They don’t. Where is the contradiction?
“”Your new comments are that the US economy is a large complicated economy and turning it around is not easy
It is.”
Sorry, I should have said it is NOT.
“Uh, Pete, by all appearances, practically ALL major countries appreciate their people more than we do ours. You have to look at banana republics to find countries that care less about their people than we do.”
I completely disagree with this comment.
Well, Paul, would you like to expand on that? Where is the evidence that the U.S. appreciates its citizens more than other countries do?
Walker, just look around. Have you ever been to any third world countries? Have you ever been to the middle east? Asia? Mexico?
Maybe you can clarify what you mean by “appreciate”. Perhaps I am missing your point.
Walker, did you see what happened in Libya recently? Have you been following the news from Syria? Glad I don’t live in either one of those places.
I think the main difference between the US and Canada is in the use and approach to its natural resources. Canadian natural resources have become an important part of the country´s economy and the government clearly understands it.
Paul, I was thinking of us in comparison to other major developed countries.
If the best we can say is “Oh, look, we take much better care of our citizens than they do in Syria and Libya,” I’d say that was pretty pathetic.