Following the financial turmoils over the past few years with economies contracting under the burden of debt built up by the mismanagement of the financial sectors, the Canadian economy has carried on pretty well.
Due to rigid financial constraints the Canadian banks didn t get caught up in the same high risk strategies of their international competitors. There were some profit reductions mainly caused by issues rooted in the US however, compared to the rest of the world and along with Australia Canada has emerged reasonably unscathed.
Canada, like Australia, has a small population and huge natural resources that just so happen to be in demand. Canada has vast oil deposits locked away in the north which it happily exports to the US where, although demand has fallen good margins due to high oil prices are achievable. Priced in $US oil prices have doubled over the past year due to unrest in Africa, the Middle East and hit by issues surrounding the BP Deepwater Horizon explosion.
Although the $US has fallen against the $ Canadian by 30 the doubling price of a barrel of oil has more than compensated.
The Canadian Government has done well also. Forced higher by the increasing oil price, tax receipts have ballooned due to the effect of tax upon tax the sale of gasoline provides.
It is unclear why also electricity costs have been increasing and their price increases being blamed on rising fuel costs. Canada is the largest producer of Hydro Electric power with over 58 of all electricity being produced in this way.
How long this situation can continue is unclear as, hit by the slowdown in the US economy Canadian production is suffering. Job losses have turned into a constant trickle. Not enough for people to be protesting in the streets but a regular trickle none the same as timber and paper mills close due to shrinking markets and raised energy costs.
Far eastern markets have opened and improved but still the volume of exports is lagging behind even the United Kingdom that suffered so badly during the economic downturn over the past few years. Changing export markets are helping cushion Canadian production however the government seems content to take in extra revenue from oil production, distillation and sales rather than address the key issues affecting the country as a whole.
Without the comprehensive social support network enjoyed by their European counterparts Canadian workers who find themselves out of jobs or on reduced time find themselves working two, three or four part time jobs just to earn enough to support their lifestyle. This again does not seem to be worrying the government as they can show they are doing a good job demonstrating employment rates are up. This belies the fact that tax collection rates fall as people overall earn less.
Socially this is not good for the country as a whole as if mothers are forced to work to contribute to the household income, children are placed in daycare. Daycare needs to be paid for so parents work longer turning the whole exercise into a vicious cycle. The end result are broken families with the prospect of some children growing into anti social young adults.
If people want to buy they look for price above quality. This again affects the economy as imports are sucked in from countries with cheaper production costs hitting the economy again.