I can't say it enough, that while Harper and his misfits are suggesting that Canada weathered the economic storm better than other countries, it was all a fair tale. We only appeared to have because Jim Flaherty bought up 125 billion dollars worth of worthless paper on our behalf.
But the creation of this fairy tale has also had another negative affect on our economy.
Canadians became convinced that we were OK, so we spent, and borrowed to spend. Interest rates were low, our photo-op PM was smiling, so what the heck?
Canada's consumer-led economic recovery is quickly fading, as workers living paycheque to paycheque struggle with stubbornly high debt levels. Reports Monday offered a sombre glimpse into how diminished consumer spending could dent housing prices and overall growth into 2011. Largely, it boils down to the real estate market and the debt Canadians acquired in a flurry of home buying that helped the country weather the economic downturn. Yesterday's saviour is today's nemesis, the Organization for Economic Co-operation and Development cautioned in a report on Canada's economy.
But now we have to start paying the piper. The same piper who is now raising interest rates, making repayment of our debts more difficult. Unemployment is on the rise, the country is in a deficit, and consumer confidence has deteriorated.
And even if Harper and Flaherty wanted to help us out they've got prisons to build, corporate tax cuts to implement and fighter jets to buy. We are not even on their radar.
Canadian consumers are about to rein in their spending, cutting off some of the blood flowing to the economic recovery. Tapped out and debt-burdened, with net worth slipping, the all-important shopper will have to juggle the budget to allocate more to repayment and less to discretionary spending as borrowing costs rise. The expected pullback comes in a key selling season for retailers in the run-up to Christmas.