Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th. It's because the banking sector is properly regulated. In fact, former Federal Reserve chairman Paul Volcker was in Toronto this week and told an audience that he was studying the Canadian financial system.
Canada has also been shielded from the worst aspects of this crisis because its housing prices have not fluctuated as wildly as those in the United States. Home prices are down 25 percent in the United States, but only half as much in Canada. Why? Well, the Canadian tax code does not provide the massive incentive for over consumption that the U.S. code does: interest on your mortgage isn't deductible in Canada.
Oh and if you think that the lack of interest deductibility has hurt ownership well you're wrong. Sixty-eight percent of Americans own their own homes. And the rate of Canadian homeownership? It's 68.4 percent.
Canada has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike the American Social Security.