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Canada's Economy Remains Strong

July 19, 2010

by Don Lee

Whatever else they've thought about their neighbor to the north, Americans have almost never looked to Canada as a role model.

Indeed, during the long, bitter push to revamp the U.S. health care system, opponents repeatedly warned that if we weren't careful, we could end up with a medical system like Canada's.

But on health care, and such crucial issues as the deficit, unemployment, immigration and prospering in the global economy, Canada seems to be outperforming the United States. And in doing so, it is offering examples of successful strategies that Americans might consider.

While the United States, Japan and much of Europe are struggling with massive fiscal deficits, Canada's financial house is tidy and secure. Most economists say it will take years for the United States to make up the 8 million-plus jobs lost during the recession, but Canada -- despite its historic role as a major supplier for the still-troubled U.S. auto industry -- already has recovered essentially all of the jobs it lost.

Meanwhile, as Americans continue their grueling battle over immigration, Canadians have united behind a policy that emphasizes opening the door to tens of thousands of skilled professionals, entrepreneurs and other productive workers who have played an important role in strengthening the Canadian economy.

Granted, Canada's problem with illegal immigration is smaller, and its economy does not match the scale and dynamic productivity of the world's largest. But on the most troubling issues of the day, the U.S. is locked in near-paralyzing political and ideological debates, while those issues are hardly raising eyebrows in Canada.

Canadian firms weren't unscathed by the credit debacle and the global economic retreat. And Canada's strong currency -- the loonie is worth just a few cents less than the U.S. dollar -- is sure to pinch Canadian exports, much of which head south.

But unlike the United States, where the financial crisis turned into the worst economic disaster since the Great Depression, the hit to Canada was fairly mild.

In the final quarter of last year, Canada's GDP surged nearly 5 percent, rising even higher in this year's first quarter. Growth in the U.S. slowed sharply early this year, heightening fears of a double-dip recession