Canada's Financial Woes

It's election time. Honesty, integrity, moderation and respect are given short shrift. Election campaigns become smear campaigns as each party does its utmost to instill in the public imagination half-truths and arguably full lies as they poll their way to shameless advantage.

And don't they have the advantage at present over the sitting government when an event as potentially cataclysmic as the global financial system melts down, imperilling the economies of all countries equally.

Well, not quite equally. Canada is sitting fairly tight in considerably good condition, despite the tsunami of bank failures all around the world. No matter, the general hysteria has reached out to Canadians who simply cannot fathom that our economy is based on fairly solid regulatory ground, with a banking system well known for its resolute risk-averse traditions.

The sky is falling and we're racing about trumpeting that fact, although it hasn't hit us yet.

Nor will it, most likely, in anything close to the extent that it has already hammered financial markets throughout Europe, Asia, the Middle East and the United States. Ah, the United States, the purported genesis of the meltdown, the home of the unfettered free market system. And here we are, in nudging distance, across the 49th parallel.

Too close for comfort, it's true, since our economy is integrally intertwined in theirs.

Yet, and yet... There is no need whatever for our government to worry about providing a whopping bailout to Canadian banks, they're nicely capitalized, good liquidity, and will remain so. Their advice and assistance has even been sought by the U.S. Federal Reserve, so there.

Canada's banks are so robust they're looking for devalued bargains in the U.S. for future expansion.

Real estate crisis? Not in Canada. No foreclosures, no mortgage failures, just a real estate market chugging along. A trifle overpriced, but that will most certainly bog down a little and prices will stabilize nicely. There are no Bay Street investment firms clinging desperately to life, with depleted assets due to unbridled greed.

You bet there's more than enough greed to go around here in Canada. Just that it hasn't the option to exercise as readily as was done elsewhere, given rules and regulations that work very well indeed. Moreover, our current prime minister, an economist by trade, looked well ahead to the future and took steps to further fortify the country well in advance of the fault lines opening to disaster.

Look here: This week the International Monetary Fund pointed out rather helpfully that Canada is in the lead of industrialized countries in economic growth projected for next year, albeit at a relatively modest level. The Royal Bank reports our economy is on "firm" ground, thank you very much, itself projecting a respectable growth in GDP.

Why all the hysteria, then? Because, sad to say, it's in the best perceived interests of the opposition party leaders to cast doubt on the abilities of the current government to lead Canada out of a depression we're not in and aren't likely to be. We're in far better shape than we were in that prolonged but relatively modest down-turn in the late 1980s and early 1990s.

We don't have a prime minister who reached out to am immensely wealthy-through-unbridled-greed Wall Street executive whose criminally incautious administration of investment capital led to the financial break-down in that country, to run the country's Treasury.

We do have a prime minister who assures the country that he, and we, have reason for confidence in our economic future.

"...I'm satisfied that our banks are well capitalized ... and that the savings of Canadians are secure with this system as it is now. That's why we will continue to take strong action, with prudent decisions and policies, and will take any additional measures that are necessary to ensure that we can navigate through these turbulent waters."

That's electioneering too, needless to say. But he doesn't insult our intelligence. He isn't assuring us that Canada will not be affected by the global downturn. We most certainly will be. But we're well placed to cushion the impact. He's being responsibly cautious, with a cool head and an eye to the future of the country.

"What the prime minister does is make sure we have a long-term plan, that we're acting on it, and that we are identifying good, long-term investments for the Canadian economy so we will continue to create jobs and move forward."

Assurances well backed by Canada's current relatively healthy fiscal position.