U.S. Workers, Get Over Your Canada Envy
Canada has been featured since the Vietnam conflict as the model for how a nation can do it right, ranging from maintaining peace to humane labor conditions.
Many Americans, of course, envied all that. Well, now you can get over the jealousy, at least most of it. As CNN Money reports, the bloom is off the rose in Canada, especially economically. Not that the nation is in the kind of trouble that is pulling down Ireland.
However, there are signs that Canada's economy will suffer some hits down the road. In turn, that could set in play all kinds of negative consequences such as a less confident and influential government, disgruntled labor force, and even lower housing prices at a time when housing accounts for 20 percent of the nation's GDP.
What are some of the factors signal ling trouble ahead? Here are the key ones:
- Overvalued currency. The loonie has fallen to about 93 U.S. cents.
- Lower economic growth. That will probably be about two percent over the next several quarters.
- Reduced export revenues. That's obvious, since about three-quarters of its exports go to the states If Americans don't open their pocketbooks, things could go from shaky to very bad for Canada.
- Rising unemployment. It stands at 8 percent but it could go higher.
- High household debt. America is not the only debtor society. Household debt in Canada is at 144 percent of disposable income.
- Housing woes. Starts are down to 9.2 percent in October. It was worse in the cities.