And how will they fare if America’s economy worsens?
OECD on Canada
The economic recovery has slowed sharply as a result of waning expansion of external demand and a retrenchment in household spending growth. Activity is nevertheless projected to progress at a moderate pace through 2011-12 as employment prospects and external demand gradually pick up again. Business investment is expected to remain robust, bolstered by firms’ healthy profitability and
financial positions and low funding costs. Substantial economic slack should gradually diminish but keep inflation pressures subdued.
OECD on the US
After turning around briskly in the second half of 2009 and into the early part of this year, US economic growth slowed in the second and third quarters of 2010. Fiscal support continues to be substantial, but the effect of the stimulus on growth is diminishing and is assumed to turn negative in future quarters. The pace of the recovery is projected to remain moderate through 2011-2012 as households continue to rebuild net worth and the unemployment rate declines slowly.
OECD on NZ
Growth has slowed thus far in 2010, mainly as high indebtedness and economic uncertainty weigh on households and firms. The major earthquake last September has exacerbated near-term weakness, though providing a boost to activity as reconstruction gathers pace. The recovery will become selfsustaining as businesses hire and invest to meet reviving export and consumer demand.
My subjective thoughts as a New Zealander - faring reasonably well.
NZ is a minnow on the global stage and has been tossed about by the GFC but fortunately not as severely as other OECD nations. The main effect has been a drop in house values, some forced sales, and belt tightening for many families. Unemployment has risen.
Probably the worst event has been the collapse of finance companies. These financiers offered higher interest than banks, drew in billions of dollars from retired people, then lent the money to property developers. :smack: The result is that the savings of a thrifty generation have been largely wiped out. Its heartbreaking to see.
As for the future, NZ still produces food efficiently and with a world population of 6.7 billion, demand continues to be firm.
I can’t speak for all of Canada, but regions involved in resource extraction are generally doing ok. While the oil/gas companies are no longer resurrecting the dead to fill rig employment needs, they are still drilling and digging. Coal mining, in particular, is really taking off again with mines in BC reopening and new ones coming online…apparently the ports are having difficulty processing the increased coal exports. New gold and copper mines as well (but mineral mines can be really sensitive to prices and unresolved land claims can stall a mine indefinitely). Forestry is clawing back, very slowly though and it will never be the major cornerstone it once was.
That said, it’s not a great market for new university grads, especially the non-engineering types.
Canada is doing as well as can be expected given the fact that a large percentage of the economy is based on selling stuff (oil, of course, but also wood, minerals, some manufactures, tourism) to the US and that is affected badly not only by the slump, but also an increase of maybe 20% rise in the Canadian dollar against the USD. Anticipating this, I gave my financial advisor strict orders about four years ago to get out and stay out of the US stock market, which has worked well for me.
Unemployment is high, but significantly lower than in the US. The social welfare net is strained, to be sure, but holding up. One big thing is that government regulators prevented the mortgage madness that hit the US. Housing prices have held their own and there is no foreclosure crisis. The conservative government acts as thoough government is, overall, a good thing. They have gone from surpluses on the order of $50 billion a year to deficits of that size over the last three years, but no one is panicking over it. One saving grace is that they had those surpluses from the mid 90s till around 2007. They didn’t blow up the deficit the way Dubya did.
Following up on Hari Seldon’s post, you might find this article by Fareed Zakaria from early 2009 of interest: Worthwhile Canadian Initiative summarises many of the insitutional strengths of the Canadian financial sector:
(My underlining)
Very interesting, thank you.
NZ’s magor trading partner is Australia, which is maintaining reasonable growth levels.
Australia’s magor trading partner is China, a relationship which dragged Aust out of the GFC without going into recession.
The US can continue to flatline, without magor additional effect on NZ, unless the US defaults, or starts a trade war.
There is no metric that makes Toronto Dominion the 5th largest bank in North America. They’re not by assets, deposits, book equity, market cap. Further, they haven’t moved up because others shrunk, they moved up because of consolidation ahead of them. I would not take that article very seriously when their basic facts are obviously wrong.
The whole article is horseshit.
Interesting, reasoned and detailed critique - would you care to elaborate on why you reach those conclusions?
According to that article:
"Canada has done more than survive this financial crisis. The country is positively thriving in it. "
Canada currently has:
A massive trade deficit.
High unemployment. (10% in the GTA) Much of it structural. Those lost manufacturing jobs aren’t coming back.
Record household debt. According to a survey done in September, “Fifty-nine per cent of Canadian workers say they would be in financial trouble if their paycheque was delayed by just a week”
50 billion dollar deficit. Over 100% of GDP and worse, per capita, than Ireland and Greece.
It’s pure horeshit to claim this as “positively thriving”.
Canada’s GDP is 1.3 trillion, of which $50B is some 3.8%. There’s some currency exchange sloppiness there, admittedly. Cursory googling indicates Ireland’s deficit is around 25% of GDP, and Greece’s around 15%. Note that both countries also have vastly more debt in proportion to their GDPs than Canada.
So, errrr… cite?
I did some Googling and grabbed the numbers from here
http://telegraphjournal.canadaeast.com/opinion/article/1319646 a poor source, since it’s just an opinion piece, so I won’t dispute that they are wrong.
However, that doesn’t affect my main point. Canada is running a huge deficit, has high unemployment and a population drowning in debt. There is no way to look at Canada’s economic numbers and conclude it is “thriving”.
I’d have to say we’re basically doing okay - cautiously optimistic. 
ETA: The second half of the question - I hope and pray that Canadian businesses have learned their lessons from 2008 and diversified away from exclusively selling to the US.
That piece is claiming that Canada’s debt is 100% of GDP, but even that’s not true. Our federal debt is somewhere between $500 and $560 billion, from various sources, and if you include provincial and municipal, probably goes up to around $750 billion.
I’d like to meet this Magor guy sometime.