No Rain for Canada?

At least not today on the B.C. coast and not in the Canadian economy more generally, perhaps. There’s a notable difference up here--in my experience--in people’s preoccupation with the infamous financial meltdown. When I’m talking to people in the U.S., it would appear that they are really cringing at what lies ahead. When I’m talking to Canadians, not so much. They know about what’s going on (at least as much as any of us knows), but they don’t appear to be shaking in their boots. On the other hand, when I went out to our field yesterday, there was a big, barred owl looming above me in a tree branch. It looked like a ‘bird of ill omen,’ although I think that’s traditionally a raven. Maybe the owl is the bird of financial ill omen.

Last month, when they were having an election, the Progressive (correction: Progressive Conservative) Party leader, Prime Minister Stephen Harper, didn’t seem to think that Canada was going to have any trouble with economic problems at all. The leaders of the other parties unsuccessfully tried to make the case that problems lay ahead and Steve wasn’t the boy to be in charge in such a case. Day to day, the headlines since the election--which Harper won--have had him on an erratic course: one day acknowledging that there may indeed be a storm ahead, another day that he’s prepared to do whatever it takes, and then the next day, it’s sunny Steve back in the news.

I, of course, have no idea of what Canada is likely to experience. The Governor of the Bank of Canada recently announced that Canada has the finest banking system in the world and that virtuous Canadian banks weren’t involved in those dirty deals that are causing the U.S. banks to come crashing down upon us all south of the 49th parallel. I think, when I read this, of all the U.S. dignitaries who are always saying that the U.S. has the finest healthcare system in the world, even though all it has is the most expensive healthcare system in the world. Maybe Canada just has an expensive banking system. Canadian financial stocks are being hit in the stock market gyrations so they must have been doing something dubious in their spare time. And this morning, the Finance Minister said that there had been some shrinkage in the economy in the past two quarters and that would suggest Canada was now, by definition, in a recession. But, by afternoon, he was a little more iffy about this.

On the other hand, Canadians have had the unpleasant experience of having their dollar weaken very suddenly and dramatically over the past 8 weeks as the U.S. dollar has strengthened. No justice here, one must say. If the U.S. has behaved badly on the economic front, how fair is it that the Canadian dollar is punished? Last summer, a U.S. dollar check for $1,000 would buy you only $960 Canadian dollars; this week, it is more like $1,290; or at least it was on the day that the Canadian dollar rose to $1.29 against the U.S. dollar. It bounces around a lot: one day it will be $1.29, the next day $1.23. It’s like the stock market itself in that respect. In all the years I’ve been watching dollar values, I’d never seen it move more than a penny or two in a day. Canada buys a lot of goods from the U.S., and those goods all increased in price by at least 20% in a matter of weeks. Something else to be amazed by and worried about.

The housing market up here on the Sunshine Coast is said to have come to a dramatic stop, after a frenetic run-up over the past few years. And stores in the malls are starting to disappear. Yesterday, when I was at the grocery store, I noticed that three stores were gone and in their places were three temporary stores…that is, short term leases (two Christmas goods stores and a jewelry liquidation place, which might really be three Christmas goods stores). I have a friend who owns a consignment store and she says business is better there, though. Maybe at the thrift stores, too.

Canada’s too close to the U.S. not to catch cold when the U.S. sneezes, but it looks like they’re hoping it will be only a light cold, nothing a little extra Vitamin C won't deal with. I’m wishing them well, but I don’t think the U.S. can be having the same kinds of hopes. No Sunny Steve for us.