A Summary of an Associated Press article.
It should be noted that the total population of Canada is less than the population of California.
TORONTO (AP) — Canada thinks it can teach the world a thing or two about dodging financial meltdowns.
While others have floundered, Canada’s economy grew at a 6.1 percent annual rate in the first three months of this year. President Barack Obama says the U.S. should take note of Canada’s banking system, and Britain’s Treasury chief is looking to emulate the Ottawa way on cutting deficits.
“We should be proud of the performance of our financial system during the crisis,” said Finance Minister Jim Flaherty in an interview with The Associated Press.
The banks are stable because, in part, they’re more regulated. As the U.S. and Europe loosened regulations on their financial industries over the last 15 years, Canada refused to do so. The banks also aren’t as leveraged as their U.S. or European peers.
In Canada’s concentrated banking system, five major banks dominate the market and regulators know each of the top bank executives personally. [editor’s note: There are eight major banks in the United States]
Although Canada did experience the recession of 2008-2010 it is recovering from the recession faster than others, and although its deficit is currently at a record high, the International Monetary Fund expects Canada to be the only one of the seven major industrialized democracies to return to surplus by 2015. The proof? This month Canada became the first among them to raise interest rates since the global financial crisis began.
George Osborne, Britain’s Treasury chief, has vowed to follow Canada’s example on deficit reduction. “They brought together the best brains both inside and outside government to carry out a fundamental reassessment of the role of the state,” Osborne said in a speech.
“The rest of the world certainly thinks we’re the model to follow,” said Martin, who was prime minister from 2003 to 2006. “I’ve been asked by a lot of countries as to how to go about it.”
Don Drummond, Martin’s budget chief at the time, “There’s a lot to learn from Canada but their starting conditions are worse,” he said. “Even though we were on the precipice of a crisis we weren’t in as bad a shape as many of them are.”
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