With an unemployment rate of 7.3% and a projected federal budget deficit of just 1.5%, Canada is avoiding many of the economic headaches that have plagued other nations. Fiscally conservative leadership combined with robust regulations have kept Canadian banks from melting down during the crisis that crippled many American and European firms. Those factors, combined with low public debt levels, allowed a nimble response to the crisis from the Canadian government. Still, observers are worried that low interest rates and high levels of household debt are now putting the country at risk of an American-style real estate bubble. As McLean’s wrote in February, “pry through the pocketbooks and bank accounts of the average Canadian and the country looks remarkably like the America of 2005—or even worse by some measures—complete with record house prices and unprecedented debt.”
Total Debt as a percentage of GDP: 276%
Household: 91%
Nonfinancial Corporations: 53%
Financial Institutions: 63%
Government: 69%