View Full Version : The US-Canada Economic Connection

10-02-2013, 08:24 PM
Yesterday the United States of America's government went into shut-down mode. While a government shutdown has nearly nothing to do with Canada, the debt ceiling crisis in two weeks could indeed put not only America's economy on the brink of collapse, but Canada's as well.

Our too-friendly association with America economically will eventually be out undoing. A poll published in the Toronto Sun shows that a majority of Canadians agree with my view that America is the most important country tied to our economy. Of course, the facts from the American government show the same. In 2012, Canada exported about three-quarters of it's goods to America. And just half (50%) of Canada's imports were from the United States.

With business ties so close, if America's economy goes down, Canada's will go just as fast. Does that mean I'm anti-American? Not necessarily. I have many American friends, I'm sure a large number of Americans trust us, but I do not trust anyone who's in Washington DC right now. To Canada, they should be classed as Public Enemy Number One.

When America's economy crashes, and it will happen, if not this year, it will happen in a few years, they can't borrow money forever. Their big national credit card will eventually be denied service. When that happens, American companies with strong Canadian ties, like McDonald's, Wendy's, Walmart, Target, and other retail and restaurant chains, will be laying off large percentages of Canadian employees. The stock markets will crumble, the entire world will go into depression, and no matter how solid Canada's economy may seem right at this very moment, we will be facing a financial disaster.

Our ties with America have benefited Canadians for many years. Without American companies, many of us wouldn't have jobs. I wouldn't have my job now, I can admit that I should credit America for my paycheck. But because of America's unhealthy spending, continuing to rely on America is a risky move. A risky move that we have to take, but one that I fear will drag us to our knees.

It may not be today, tomorrow, two weeks from now, two months from now, maybe if they're lucky, it might now even be two years from now. But it will happen. It will. And when it does, I can only hope my fellow Canadians have saved a hell of a lot of money for a rainy day, because when the economy crashes, every day for many months, maybe years, will be rainy days.

The Left Sock
10-02-2013, 08:38 PM
As I have stated several times in the past, America's eventual demise will have a definite impact on the Canadian economy, but I do not see America's collapse as an automatic reason for Canada to be taken down with it.

Canada is a resource-based economy. The resources we provide the world are essential, such as oil, wheat, lumber, minerals, etc.,

So, when America's collapse occurs, there will be a period of hardship, while we shift our exports to countries like China, India, Russia, and the EU, but this process is already underway. Our dependency on America's market is only due to convenience, not necessity. Other countries will buy what we produce, it's just a lot simpler to trade with America.

When the going gets tough, I am confident we will make the adjustment, and Canada will survive just fine. We may not be quite as comfortable as we once were, because America's collapse will ripple across the world, but when countries have to have what you produce in order to survive, any trade that does occur, will come our way first.