Media reports described the early weeks of this election campaign as boring. Stéphane Dion's impossibly complex Green Shift, that focused on a $50-billion-plus spending program financed largely by a carbon tax, was going nowhere with voters. Jack Layton's plan to impose $50-billion in taxes on the business engines of our economy resonated only with the party's hardcore socialist supporters.
Then manna from heaven came for both parties when reports of international economic chaos, combined with a precipitous drop in the S&P/TSX composite index, shifted voter attention from these doomed platforms. Even Canadians who never owned a corporate share and couldn't care less about the stock market suddenly feared for their homes, their retirement savings and their jobs. But what else, besides a big drop in the stock market, has really changed in Canada since the election was called?
Has unemployment increased? Statistics Canada's September employment report showed more jobs were created than ever recorded in a single month.
Are Canadian banks in trouble? The World Economic Forum just ranked Canada's banking system as the soundest in the world.
Why is credit so tight? Banks are preserving their capital because international money markets have frozen up. Finance Minister Jim Flaherty's announcement that Canada Mortgage and Housing Corp. would trade government financial paper for the mortgages they already insure will help by injecting lending liquidity into the banking system without any cost or risk to the taxpayer.
Is there a subprime mortgage problem in Canada? Only 5 per cent of Canadian mortgages are rated "high risk," compared to more than 50 per cent in the U.S.
What about homeowner equity? On average, Canadian homeowner equity is about 70 per cent, while U.S. homeowner equity has been in freefall, to less than 45 per cent.
Will Canadians with mortgages be hurt by all this? Canadian house prices have held up relatively well and, for those with variable-rate mortgages, the central bank's move to lower interest rates is an opportunity to lock in at lower rates.
Is Canada's fiscal house in order? Canada is the only G8 country not running a deficit. The U.S. deficit for the 2008 budget year was $438-billion (U.S.).
What about personal debt levels? Canadians have been relatively prudent. The average American has taken on 30 per cent more debt during their long, easy-credit shopping spree.
What about your savings and pension plan? Savings are safe in the Canadian banking system and, if you're in the stock market, remember that you haven't lost money unless you sell. Every severe downturn in the market has been followed by gains, rewarding those who didn't panic. As long as you aren't faced with having to pay back debt used to invest, this is the time to employ the Rip Van Winkle method of weathering a stock market crash. As for your pension plan, you can bet that professional pension fund mangers are planning to strengthen funds through gains from those buying opportunities the Prime Minister was vilified for mentioning.
Will anything good come out of all of this? Some things already have. Over the longer term, inflation is a much more insidious and destructive force to personal savings and economic health than a stock market crash. Only a few short months ago, inflationary pressures were overwhelming. Fuel, food, housing, and interest rates were climbing due to shortages created by unsustainable global consumption.
While high resource prices drove economic growth, they also drove up the Canadian dollar. The result was labour shortages and cost overruns in resource-producing regions, while our manufacturing heartland struggled. A lower dollar will make Canadian manufactured products more competitive. Lower oil prices will be good for Canadian businesses and families, yet they are still high enough for oil companies to profit from quality projects. Farmers will welcome lower fuel and fertilizer prices, yet, here again, Canada's fertilizer companies are strong and resilient.
Once we get through this economic turbulence, and we will, a better, more rational and sustainable economic balance will unfold - between regions of our country, and between countries of the world.
This isn't to say that Canadian business won't face adjustment challenges; for example, the market for sport utility vehicles and trucks isn't coming back, so employment will suffer while the auto industry adjusts to technically and environmentally improved vehicles.
Changes will occur in every part of every industry as the great free enterprise process replaces products reaching the end of their life cycle with new ones based on more competitive technology.
Our country's sounder economic health going into this global crisis gives Canadian business an opportunity to achieve leadership as a new economic era begins.
Dire daily financial market reports, combined with opportunistic electioneering, have instilled fear in the minds of Canadians. But this is not a time for knee-jerk actions by the government of the country that is internationally recognized as having managed our affairs better than others.
Getting Canadians through these global issues in the best shape possible needs leadership that takes prudent and timely action when and where needed, while reminding us of our country's unique strengths.
In a word, it's all about confidence - the confidence needed for business to continue to invest and create jobs and the confidence of consumers to buy their products and carry on with life in as normal a manner as possible.