You know how it is. When your neighbor remodels their kitchen, suddenly your fridge is too small, your pantry is too dark, your cabinetry is old fashioned, and don’t get me even started on that darn exhaust fan. It’s called peer pressure, only on the adult scale, when people compare who has a bigger house, wider driveway, or fancier car.
The same adult scale peer pressure is happening to countries too, when they start comparing their GDPs, current accounts, budgets, you name it. Recently, Statistics Canada reported that Canada’s trade balance rose from $3.9 billion in July to $4.2 billion in August, an increase of about eight percent. This came about because for the fourth consecutive month, exports rose 0.3%, while imports fell 0.6%. Apparently, we made the most money exporting wheat, fertilizers, and metal ore.
However, it wouldn’t be the first time people are trying to downgrade whatever good thing we may have going on here. Some economists believe that the falling energy prices will bring Canada’s trade surplus back to the range between $2.5 and $3.0 billion. Others are saying that Canada lucked out with wheat because our major competitor in wheat exports, Australia, took a major beating because of the crippling drought.
But, Canadians would beg to differ. Luck had nothing to do with it. There is one more piece of statistics illustrating just how healthy our economy is at the moment. Last year, Canada had the lowest number of businesses going bankrupt for the past quarter of a century. More specifically, in 2005 about seven companies filed for bankruptcy for every 1,000 that stayed in business. This rate has not been seen since 1980. To put things in perspective, from 1982 to 1992, when the bankruptcy rate peaked, every 15.2 companies went under for every 1,000 businesses.
Even the patterns of bankruptcies have changed in the last 25 years. For example, the last major economic slowdown occurred in the year 2000, when the tech bubble burst. Yet, Canada didn’t see the wave of business failures similar to recessions of previous decades. The only negative about the bankruptcy rate was that when Canada’s business fail these days, they fail in style, with more money being lost in bad deals or as debt to creditors. But, that would again have something to do with Canada being a wealthier society then some 25 years ago.
So, to those watching our performance on the international stage, we’re doing just fine, thank you very much.