Ahead of the G8/G20 summits in Ontario this summer, Canadian Finance Minister Jim Flaherty is talking up Canada’s strong economic performance of late. Did you know that Canada suffered the smallest GDP contraction of any G7 nation during the recession? Or that the Harper government is planning to nearly zero-out the budget deficit by 2015? Their debt-to-GDP ratio in that year is projected at a slim 31% versus the G7’s 95% average. [Sources: National Post coverage here, Globe and Mail coverage here]
I’ve heard various explanations, ranging from the absence of too-big-to-fail banks in Canada to Canada’s housing bubble not bursting even to the budgetary austerity decreed by then-Finance Minister Paul Martin from 1993-2002. It’s entirely likely that it could be in some part related to all of these factors. Whatever it is, I wish America could borrow the blueprint.