Looking north for economic inspiration.
Jun 7, 2010, Vol. 15, No. 36 • By FRED BARNES
Canadian banks, in contrast with American financial institutions, received no bailouts in the banking crisis of 2008 and aren’t targeted for a wave of new regulations. With a conservative banking culture, Canada largely avoided a housing bubble. Even government-backed housing loans require a 10 percent down payment.
The Canadian economy did slip into recession, and the Conservative government of Prime Minister Stephen Harper, in power since 2006, provided a stimulus. It was unlike Obama’s in an important respect. It was purely temporary. Obama’s stimulus spending has raised the baseline of permanent spending. Harper’s government, by the way, has cut the national sales tax from 7 percent to
Nor does Canada accept any responsibility for the recession. “Canadians are looking at the United States and saying, ‘You guys caused this,’ ” says Ken Boessenkool, president of Canada’s leading conservative organization, the Civitas Society. “We’re just getting the blowback.”
Canada stands to benefit further from its conservative agenda. The country has higher tax rates, but if Harper stays in office another four or five years and Obama wins a second term, Canada may “emerge as the lower tax jurisdiction,” thinks Frum. All the better for a country already poised to play a bigger role in the global economy. America, while still an economic superpower, may have to settle for a reduced role.
A century ago, Prime Minister Wilfrid Laurier made a prediction well known to Canadians but not to Americans. “The 19th century was the century of the United States,” he said. “I think we can claim it is Canada that shall fill the 20th century.” Laurier may just have been a century off.
Fred Barnes is executive editor of The Weekly Standard.
Recent Blog Posts