Thought of the Day - June 19 - Canada Will Do Better Than Most

While you have probably gathered I am a pragmatic (my brother uses the term cynical-optimist); I find it is a good way to live as most of the time you are pleasantly surprised. That said, despite some efforts to the contrary, I do believe Canada will do better than the majority of countries around the world in the handling the crisis and coping with the massive economic fallout to come:

• the virus arrived a little later in Canada than in many constitutions, thus affording us three benefits: 1) advance information, 2) time to prepare for the first wave and 3) the arrival of spring;

• we have a vast geography and a lack of metropolises on our side;

• we have a capable healthcare sector, with ample capacity to accommodate current COVID-19 cases;

• we have the US south of the border, so we will learn from their mistakes - as Winston Churchill famously said "You can always count on Americans to do the right thing - after they've tried everything else";

• government rhetoric, such as: don't wear masks, there are no reliable anti-body tests, or publishing case numbers that don't add up, are fairly transparent and quickly debunked by our "fairly-free" press;

• we have a reasonably well-educated populous; by this I mean, one that has a fairly balanced perspective, not blinded by politics, religion and nationalism;

• following from this we also have a non-radicalized citizenship; while demonstrations will happen, hopefully, they will not destroy;

• we have a fairly affluent population, thus our social system can afford to err on the side of short-term subsidies.

Of course, we have some things that run against us:

• Canada's economy is dependant on oil & gas revenues that are now in the drink, and as a consequence Alberta, that has subsidized the rest of Canada for years, is destitute;

• we do have large, both personal and public, indebtedness, thus are close to defaulting on multiple levels;

• we have a very large public sector (Canada is 6th in the world after Scandinavia and France). While of help in the short term, the difficult task of substantially pairing it back must be done if we are to survive as a first-world nation;

• the Canadian population will resist any heavy-handed policies such as tracking systems, random testing, lock-downs and wholesale vaccination etc.;

• as with many of the "developed" nations, we have an age-ed population, while this helps on the civil unrest front, we have done little to protect the most vulnerable and it does mean we are psychologically less able to embrace the new reality.

But let's look a little deeper (more positives):

• the Canadian dollar, has been historically tied to commodity deals (like the Aussie dollar), thus is still hitting far above its belt (sixth in the world) - so while other countries scramble for much needed foreign exchange, the Canadian dollar is still a go-to currency;

• the Canadian banking oligopoly was already enjoying a strongly-subsidized status and thus have limited liquidity problems, and should require only limited bailouts;

• besides banking, the TSX is buoyed by the obscenely profitable telecom sector - and they are doing just fine in this "Zoomed" world;

• while BC (tourism/service/film) and Alberta (oil & gas) have issues, the Canadian economy is not a one-trick-pony; we have substantial agriculture, mining, manufacturing and technology industries to fall back on.

Don't get me wrong, we are in deep "Do-Do". The economic effects of this pandemic will be felt for a generation. Moreover, a few countries will fare far better than us, but I do believe, for the most part, we will do pretty well. That said I just hope, like so many around the world, I am not just drinking the Kool-Aid :).

Cheers

Cliff