The IMF (International Monetary Fund), a 185 country organization recently released a report that said "Canada is better placed than many countries to weather the global financial turbulence and worldwide recession, thanks to sound policy management and proactive steps to maintain economic and financial stability."
Paul Volcker, the former U.S. Federal Reserve Board chairman, and is now a member of President Barack Obama's advisory team on the economy recently commented on the Canadian financial system.
"Canada is relatively less infected, for reasons that are consistent with the direction in which I think the financial markets and financial institutions should go."
When we first moved to Canada I was surprised by the level of equity required to buy a house. If you had less then 20% equity it is called high ratio and the Canadian lender I was dealing with made it sound like a very negative thing. This, after coming from the U.S. where I had been offered, almost encouraged to take, 103% financing to buy our first home several years prior. At first I couldn't believe how conservative the Canadian lending market was. I see now that this financial conservatism is likely the very thing that will save Canada the worst of the downturn experienced by the rest of the world.
A recent article in Newsweek titled "Worthwhile Canadian Initiative" highlights some of the strong economic factors that are helping Canada weather this global economic storm. This is a pretty significant article in a very prominent U.S. publication. Most notable was the strength of the Canadian banking system. TD Canada Bank is now the fifth largest bank in North America. Not because of growth, but because all the large US banks have shrunk. Royal Bank of Canada just posted a 1 billion dollar profit. The article also points to Canada's long term history of being conservative. Canada never got into subprime mortgages, the government wouldn't allow it. Also, Canada has typically run a trade surplus given its vast supply of natural resources. Interesting article well worth a read.... http://www.newsweek.com/id/183670
Research in Motion Ltd, maker of the BlackBerry and a Canadian company has recently announced the purchase of a 460,000 sqft office complex in Riverside Texas for their own use. This is a notable transaction not just because of the size of the property and that it is a Canadian company, but because it is a reverse of the recent trend of sale-lease back transactions. In this economy, companies with strong balance sheets might start looking for good deals to acquire their own office and manufacturing locations rather then the recent trend of selling real estate to get it off their balance sheet and make a quick profit and then leasing it back.
First Obama chose Canada as his first foreign country to visit after becoming president, now George W. Bush has also recognized Canada. When Bush was first elected president he chose Mexico over Canada as the destination for this first official foreign visit, which caused Canadians some stress. Now as ex-president he has chosen Canada as his first stop on the speaking tour.
I have noticed a recent trend of Canadian investors making the news in U.S. publications. I had previously posted that in some U.S. markets Canadians are currently making up the majority of buyers. Further evidence of this was recently published in National Real Estate Investor. In the article "Apartment Investment Sours in Phoenix, Florida Markets" it stated that a recent trend in the Phoenix market is the arrival of Canadian buyers to purchase 20 or so condo units unsold from projects of about 200 units. It noted that discounts of 30% to 40% are achieved on some of these bulk sales.
HTnaturals based in Vancouver, British Columbia has opened it's first retail location in the United States. The store is located in The Outlet Shoppes in Burlington, Washington. HTnaturals is a clothing company that manufactures eco-friendly, sustainable clothing. Many of the clothes are made from soy, bamboo, hemp, and organic cotton. The company believes in a triple bottom line which looks and economic, environmental, and social responsibility not just net income.
Varner Systsma Herndon (VSH) a Bellingham based CPA accounting firm specializing in Canadian - U.S. cross border taxation and consulting services recently announced that they have opened a new office in Surrey, BC to better service their Canadian clients. The office is located at 404 - 1688 152nd Street in Surrey. Having this office means that Canadian businesses don't have to cross the border, just to meet with their U.S. accountant. However, last time I spoke to VSH they didn't offer preparation of Canadian tax returns. They consult with Canadian businesses regarding U.S. taxation and tax returns. So the Canadian business will have to go to a separate CA/CGA for the preparation of their Canadian tax returns.
A recent article in the National Association of Realtors magazine Realtor had the above title. The article was discussing how in some markets in the US the only buyers were Canadians buying investment properties and second homes. The article quoted Mike Kent, a Realtor in the resort community of Birch Bay Washington near the Canadian border who said nearly 40% of his sales in late 2007 were to Canadians. Additionally the article says 11% of all international buyers in the US are Canadians.
On the commercial side a recent article in the Bellingham Business Journal quoted Ken Reinschmidt with Saratoga Commercial Real Estate who stated that 40% of the industrial market in the Bellingham area was made up of Canadian companies.
Clearly, many markets in the US are being supported by Canadian buyers in this down economy. This is not only occuring near the border, but also in resort areas of Arizona and Florida. Ozzie Jurock, a real estate investor in Vancouver BC recently stated that he has purchased 100 condos in Arizona in the last two months.
Stork Craft (USA) Inc. a Canadian baby furniture manufacturing company has signed a two-year lease with the port of Bellingham to open a USA based distribution facility. The company's headquarters are located in Vancouver, BC. Stork Craft is the largest supplier of childrens furniture in the world. The long term plan for Stork Craft is to build their own distribution facility in Whatcom County and to eventually employ 30 employees.
