Is the current downturn starting to spiral?

May28th2018, I feel a bit sorry for you because it's clear that you don't actually understand a single word of what you just said to me.  I suspect that without an Internet connection, you'd probably be at a complete loss as to how to explain how things actually work in Canada.

First of all, the exchange rate is back to where it was four years ago.  That actually suits a lot of businesses in Canada and the U.S. just fine; sudden changes in the exchange rate can create significant problems for importers and exporters.  I know a guy who runs a small business, who very nearly went out of business because of the drop in the exchange rate in 2007 -- about 30% of his company's income had disappeared by the summer of 2008 for reasons completely out of the control of both himself and his customers.  He's still in business now only because the exchange rate has gone back up.  Don't believe me?  The Canadian Labour Congress has research that shows that since 2002, about a quarter million jobs were lost due to the upward trend in the exchange rate, much of it in manufacturing.  A lot of Canadians who invested in U.S. stocks also watched their money disappear into nowhere.

There is this notion used in the worldwide currency industry called "purchasing power parity" (there's a Wikipedia article on it) that uses a simple formula to determine what an exchange rate between two countries "should" be, based on real incomes and the real cost of similar goods.  The PPP between Canada and the U.S. right now is calculated at about 1.20, and the real exchange rate is about 1.28.  That's not too bad, considering that Canada's new economic problem this year is almost entirely the effect of the poor economy in the United States.  Currency parity is much more imbalanced and undesirable than the current exchange rate!

Anyways, you also chose to call out unemployment rates.  Again, let's be clear about this: most of the jobs being lost in Canada due to the weakening U.S. economy.  The U.S. is Canada's largest trading partner (and vice versa), but because there are ten times as many Americans as Canadians, any significant drop in the U.S. economy can have an outsized effect in Canada.


You also chose to call out gas taxes.  Hey, guess what?  Canada's roads are in better shape than the United States's roads.  Ask anyone who drives in both countries.  Ontarians grumble about high gas taxes, but then they go to Michigan or New York, have a mighty WTF about the sorry state of the infrastructure there, and are quite happy to get home where things are better.  The real difference in fuel cost isn't actually all that great. A of a couple of days ago, the cost of gas in SW Ontario was about 83 cents/L CAD (less if you know where to look), and about $1.95 USD/gal in SE Michigan (again, less if you know where to look).    Let's walk through the math:  0.83 CAD = 0.644 USD.  There are 3.78L in a gallon, so 1 gallon of fuel is 2.43 USD.  That's 50 cents more a gallon.  Of course, the price of gas varies widely in the United States; it's more like 2.05 in SE Ohio, 2.25 in parts of New York City, and 1.70 in Athens, Georgia.

There's no possible way for the actual, real math to work out that Canadians pay twice as much for gas as Americans do.  You're outright lying here.


Yes, Canadians pay more taxes than the United States, but... amazing thing, this, Canada's economy is generally much better-managed, and Canadians have a higher standard of living, are safer, and enjoy much cheaper access to health care and education. 


And you're also absolutely wrong about "poor Americans are richer than rich Canadians".  I guarantee (and I'd wager money on this) that you can't find any proper statistics to back this statement up.  There are more Americans living in poverty than there are Canadians, period.  There are more illiterate people in the Unites States than there are Canadians, period.  Canada routinely rates in the top 10 countries in the world for comparatively low poverty levels, the United States is always several spots behind, in spite of those lower taxes you've B-Sed yourself into believing make the United States a better country.

If this was your attempt to demonstrate that you really don't know what you're talking about, congratulations!  You've succeeded!

Nunavut?  Are you f--king serious?  An arctic region whose capital city has 6,000 people (and whose other ~25,000 residents are spread out across almost 750,000 square miles -- that's like two Texases, California and Oregon put together) and whose almost entirely Inuit population has to be more focused on basic survival and hunting than they have been on upper education?  Between that and severe problems with alcoholism and substance abuse, it's no surprise literacy rates are low.

Nice try, but like I said, you don't really know what you're talking about.  Otherwise you wouldn't be pointing to freakin' Nunavut as a representative example of what's going on in Canada.  That'd be like judging the success of the education system and literacy United States as a whole based on central West Virginia, one of the poorest and most run-down regions of the entire country... due in no small part to the terrain and low population density.

Nope.  You're going to have to try harder than that.

Nortel was widely recognized in Canada to be a crap company with brutally bad products and even worse support, long before the economic collapse came along.  This is a company that, in one quarter of 2001, reported $4.5 billion in revenue and $19.2 billion in losses.  How is that even possible?  The company cut tens of thousands of workeers in an effort to survive.  But they never really turned themselves around from being a cesspool of greedy management and poor products.  This is a company that awarded its executives $400 million in compensation at a time when it was clear they were headed on the path towards bankruptcy.

You're right, it has nothing to do with the United States, but the collapse of Nortel happened for exactly the same reasons that many major American companies have been dropping like flies through the decade -- unfettered greed at the top 0.001%.  It's almost like they looked to WorldCom and Adelphia as a model for how to do executive compensation.


As for RIM, they're actually doing quite well.  They're sliding with the rest of the tech industry, but they're back to where their stock valuation was around the beginning of 2007, which is also true for a number of other successful tech companies like Apple.  Not sure why you mentioned them.  Oh, right, it's because you don't have a clue about what's actually going on in Canada... sorry, almost forgot there.

I'm up on my knowledge of Canadian & American business, politics and economy because it is a big part of what I need to know for my professional work; I'm also from one country and getting married to someone from the other, so, hey, it's part of what I need to know in my personal life as well.  I don't need to look up exchange rates, gas prices or commentary on the comparative quality of roads, health care and education, or on the state of politics because I live my life in both countries, see these things with my own two eyes, talk to quite a number of people in both countries, and compound that with a lot of research.

That's the starting point for my perspective on things.  Almost by definition, it's going to be more a informed perspective than people who recite the dross you get from self-described patriotic conservative talk radio hosts, or where-ever the hell it is some Americans pick up the kind of badly-informed, unrealistic viewpoints that aren't grounded in actual reality.

As for Canada's GDP, when measured per capita it is more or less on par with the United States, though usually behind by a bit (depends on how you measure it).  Canada's GDP to debt ratio has also been close to the United States, but unlike the United States, Canada has been running budgetary surpluses, not large deficits through the 2000s, so that's been tilting in Canada's favour.

That said, I'm not really much of a believer in using the GDP alone as a proper measure of the success of a nation.  Spending lots of money on stuff is only part of the equation.  Is the money being spent in the pursuit of feeding the personal greed of the few or improving the quality of life of the many?  Is our children learning?  The Human Development Index does a better job of measuring the real effectiveness of both public policy and private spending.  Canada's GDP per capita may be lower, but.... so?  The quality of life is measurably better.

And which is more important to you as a functioning human being?  Money or happiness?

(that question always reminds me of a story: A catholic friend of mine went on a church mission to the shantytowns in the hills surrounding Lima, Peru.  Destitution is widespread there .  But, she found that many of the people there were happier and more at peace with their life than just about everyone she'd ever known in her home state of Connecticut.)