Why Canada Will Dominate The 21st Century (according to Forbes)

[link to ca.finance.yahoo.com]

The Canadian century?
by Nathan Vardi, Forbes.com
Tuesday, February 16, 2010
provided by


In 1904 Canadian Prime Minister Wilfred Laurier made this prediction: "The 19th century was the century of the United States. I think we can claim that it is Canada that shall fill the 20th century."

Maybe Laurier was just a man 100 years before his time. As the world assembles in Vancouver for the Winter Olympics, the 21st century is shaping up great for Canada.
For starters, Canada has avoided many of the problems that currently bedevil the U.S.—mountains of public debt, a banking system in crisis, the housing debacle and a weakened currency.

Canada's banking system, essentially made up of the Royal Bank of Canada and four other big banks, remained strong during the global credit crisis. With no bailouts, it is the soundest system in the world, marked by a steady and responsible continuation of lending and profits. "Canada has shown itself to be a pretty good manager of the financial system," U.S. President Barack Obama said amid the financial crisis. Was that a touch of envy in his voice?

And it is not just banks that have remained solvent. Canada, with its relatively small population of 34 million, has the lowest debt burden of any G8 country and less than half the per capita debt burden of the U.S.

Bill Gross, who runs Pimco, one of the world's biggest bond managers, recently said that he thinks Canada is the best bet for investment among developed nations. "It moved toward and stayed closer to fiscal balance than any other country," said Gross.

In addition, the Canadian economy, the world's 10th biggest, is endowed with natural resources increasingly valuable in this century—like potash and uranium. New technologies allow for the vast development of the Athabasca tar sands in Alberta, helping make Canada's oil reserves the world's second largest. Yes, there are environmental implications, but Canada is now the biggest supplier of crude oil to the U.S., a lucrative—and enviable—position for any country.

Even global warming seems to be playing in Canada's favor. Melting Arctic ice poses serious concerns globally, but it has also opened northern sea lanes for the first time, as well as the opportunity to search for new natural resource deposits.

The result of this mix of fortune and fiscal prudence: a relatively strong Canadian currency. The loonie has soared against the hobbled U.S. dollar so far this century. That strength has been a problem for Canadian exporters to the U.S., but it is also a source of national pride—and relief—as Canadians watch the financial flailing of their neighbors to the south.

The world is taking note. Canada just hosted the G7 finance meeting way up north in Nunavut and will host both the G8 and G20 conferences later this year. Most important, Canada has welcomed the world to the Winter Olympics in Vancouver and is showing off its accomplishments. Laurier would be thrilled. But not surprised.

[link to www.forbes.com]

10 Reasons Canada Is Cheering Canada has avoided many of the problems that currently bedevil other developed countries like the U.S.--mountains of public debt, a banking system in crisis, a housing debacle, and a weakened currency. As the world assembles in Vancouver for the Winter Olympics, the 21st century is shaping up great for the Canucks:

1. Strong Banks Canada's banking system, consisting essentially of five big banks, is the soundest in the world. No bank bailout necessary--the big Canadian banks have continued to steadily lend and earn profits amid the global financial crisis. As U.S. President Barack Obama said: "Canada has shown itself to be a pretty good manager of the financial system."

2. Low Debt Canada is a bastion of solvency. The country has the lowest debt burden of any G8 country and less than half the per capita debt burden of the U.S. Bill Gross, who runs Pimco, one of the world's biggest bond managers, recently said that among developed nations he would prefer to invest in Canada. "It moved toward and stayed closer to fiscal balance than any other country," said Gross.

3. Strong Housing Market Canada's housing market is so strong people fear it may be a bubble. Housing prices have increased in Canada's six biggest cities for seven straight months and are almost back to their pre-credit crisis highs. Still, the percentage of home owners who have gone three or more months without making a mortgage payment remains low.

4. Oil Sands The Athabasaca tar sands have been mined and steamed by new technologies to create a vast unconventional oil resource. They give Canada the world's second biggest oil reserve. Yes, the development comes with environmental strings, but the oil sands have provided a huge boost for the Canadian economy.

5. Conventional Oil Canada is the biggest oil exporter to the U.S. and about half the oil Canada produced is still the conventional kind. Higher prices have provided an economic renaissance, especially in places like Newfoundland that were previously struggling economically. The Hibernia oil field in the North Atlantic--which already features the biggest oil platform in the world--is set to expand.

6. Cows and Wheat As one of the biggest producers and exporters of agricultural products, Canada has benefited from the strengthening of demand for such products. For example, Canada's rich potash reserves in places like Saskatchewan are key to producing fertilizer needed to boost crop yields to feed the world's growing population. Saskatchewan is also an important producer to wheat.

7. Gold, Nickel, Uranium The mining sector contributes some $40 billion to Canadian GDP annually. Canadian gold, a precious metal, and nickel, one of the more valuable base metals, have been mined in big amounts for decades and have experienced a general rise in prices. In addition, new hot commodities like uranium have made new mining projects ever more popular in Canada. Some of the biggest mining companies in the world are Canadian-based firms undergoing a renaissance.

8. Technology The U.S. has Steve Jobs and the iPhone. But Canada is home to the ubiquitous Blackberry, made by Research in Motion. Canada has also produced the IMAX, the world's largest cinema screen and, on a more serious note, 3TC, the important viral drug used for HIV and AIDS infections.

9. Water The world doesn't have enough of it where it needs it, but Canada has more than it knows what to do with. Canadian hydroelectric power is super cheap and environmentally friendly, fueling industries like aluminum and providing big export revenues from the U.S. This has helped the province of Quebec, which is the sole shareholder of the world's largest producer of hydro-electric power.

10. The Loonie The Canadian dollar has soared against the U.S. dollar so far this century. This has been a problem for Canadian exporters to the U.S., but it makes Canadians feel good about themselves, stirring up feelings of national pride--for good reason.