Global financial crisis catching up to us, some politicians are noticing

April 27, 2012 | By | Reply More

“We might actually have to make hard choices!”

Bruce Stewart

Photo: Bruce A. Stewart

By Bruce A Stewart     

Canada loves the story: “we avoided the Global Financial Crisis”.

The trouble is, it’s only partly true.

Like Australia, we had a banking system that hadn’t gone to the excesses seen in the United States or Europe.

Like Australia, our resource sectors are booming.

And, like Australia, the rest of the country isn’t. Although we’re spending — citizens and governments — like it is.

Unlike Canada, Australia’s government has stayed out of the red. So, too, most of its states.

Here? Our Federal Government wiped out eight years of debt repayment in two years of deficit spending … and the red ink is still flowing freely.



Our provinces? Saskatchewan, take a bow: you’re the only one that knows how to balance your books. Everyone else is spending like there’s no tomorrow.

And there may not be.

Ontario’s Finance Minister shrugged off Moody’s downgrade of the province yesterday. Indeed he might: they were just catching up to the other agencies, who downgraded Ontario in 2009.

Now Standard and Poor’s has Ontario on watch toward another downgrade, probably before the end of the year.

Even on Ontario’s optimistic view of the future, growth will come without touching unemployment.

Meanwhile, in Prince Edward Island, we’ve actually heard truth from the Health Minister.

“There’s no more money, and our health care system is eating us alive. We’re going to have to figure out how to do things differently.”

When questioned, he said, “yes, we can’t expect Ottawa to bail us out any more.”

In a province where two out of three people work in the public sector, that was refreshing.

He’s right, too, because Ottawa doesn’t have it to ship out any more.

We’ve even, this week (rightly, too) declined to top up the International Monetary Fund. Something about “bad money after good”.

After all, the IMF is looking at multiple European countries in trouble, not to mention scores of other ones around the world.

Interest rates are rising in Europe. (In Britain, interest on debt already exceeds all their spending on Foreign Affairs, Defence and more combined. Picture it at two or three times current interest rates.)

This is the future our deficit-loving federal and provincial governments has set up for Canada.

Interest rates will go up — a year from now today’s ultra-low global rates will be but a memory everywhere. That’s before additional rises due to waves of credit downgrades (and the rating agencies move in packs: when they move, they’ll hit hard and fast).

Meanwhile, Canadian personal debt has hit new all-time highs. So just raising taxes would be a double whammy.

That glow we’re all basking in?

Time to start demanding our leaders batten down the hatches and stop the nonsense.

Before we find out how nasty it gets, when our resources are selling well, yet we’re all going broke.

Bruce Stewart is a consultant, educator and philosopher with a passion for public affairs currently located in Toronto. He is well known across the Internet for his blogs on management (Getting Value from IT) and social affairs (Just a Jump to the Left, then a Step to the Right) and for his daily stream of commentary on Facebook, Twitter and Google+. You can reach him at


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Category: Opinion, Politics

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