If ever there was an innately Canadian response to a crisis, the national reaction to the credit crunch must be it.
Thus far Canada appears to be in better shape than other Western economies caught up in the backwash of the U. S. meltdown. Far from taking comfort from the fact -- perhaps even exhibiting a little national pride -- Canadians seem intent on punishing the government for not being panicked enough. Look at what's going on elsewhere:
The United States itself has all but nationalized much of its mortgage market, crafted a bailout of mammoth proportions, watched the financial titans of Wall Street crumble and a string of banks collapse or be swallowed by competitors. Britain yesterday launched a partial nationalization of its banking sector; Spain created an $80-billion bailout fund; European finance ministers tried (and failed) to organize a co-ordinated response; France imposed restrictions on executive pay; and Iceland, facing bankrupcty, pleaded with Russia for an emergency loan.
Compare that with Canada. There is no talk of a banking bailout, and no suggestion one is needed. Canadian banks say they remain well capitalized, and -- as reported in yesterday's Financial Post -- have been approached by the U. S. Federal Reserve to help in its rescue operations.
It is highly unlikely any Canadian bank will go under. There is no prospect of nationalization -- even Jack Layton and his NDP haven't suggested such a thing.
Far from facing ruin, Canada's banks are seeking out bargains in the United States, hoping to use the crisis to expand their own operations south of the border.
On Monday, the Bank of Nova Scotia took advantage of a bargain closer to home, spending $2.3-billion to buy a big chunk of CI Financial Income Fund, one of the country's biggest mutual fund firms.
There is no real estate crisis, no subprime mess, none of the Bay Street bigwigs has gone out of business.
This is not to suggest Canada is Happyland and the future is nothing but roses. There will be a hefty, and as yet incalculable, price to pay for the economic disaster in the United States. Americans may already be in a recession, and Canada can't hope to escape its effects. It could be long and painful, exacerbated by the spread of the contagion to Europe and Asia, and the apparent inability of legislators in any of those regions to get a grip on it. There could also be considerable fallout from the sharp decline in stock prices if the inevitable recovery is too long in coming.
But it is to say Canada appears to have made better preparations for these difficulties than most of our allies or colleagues in the G8. The purpose of regulatory systems and backup plans is to prevent a crisis from becoming a disaster, and Canada's appear to be working.
On Tuesday, the International Monetary Fund projected Canada will lead industrialized countries in economic growth next year, though at a paltry 1.2%. Royal Bank of Canada agrees, reporting that Canada's economy "remains firm" and projecting growth of 0.9% this year and 1.5% next year. Canada remains in surplus and all the federal parties say they can keep it that way.
It would seem logical that we would signal an appreciation of that by seeking to continue along the same lines. But instead, Ottawa is being assailed by charges the status quo isn't good enough, that what we need is a grand plan, some kind of rescue mission, mainly -- it appears -- because everyone else has one.
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It's very Canadian: We can't accept that we've done a better job at staving off disaster than other countries have. Maybe we've been a little bit smarter, a little bit better prepared. Nah, couldn't be. If they're in crisis, we must be in one, too. Give us a bailout now -- we'll figure out what to do with it later.