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Worthwhile Canadian Initiative

Feb 16, 2009

- Fareed ZakariaNEWSWEEK


Canadian banks are typically leveraged at 18 to 1 — compared with U.S. banks at 26 to 1.

The legendary editor of The New Republic, Michael Kinsley, once held a “Boring Headline Contest” and decided that the winner was “Worthwhile Canadian Initiative.” Twenty-two years later, the magazine was rescued from its economic troubles by a Canadian media company, which should have taught us Americans to be a bit more humble. Now there is even more striking evidence of Canada’s virtues. Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors.

Yup, it’s Canada. In 2008, the World Economic Forum ranked Canada’s banking system the healthiest in the world. America’s ranked 40th, Britain’s 44th.

Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn’t grown in size; the others have all shrunk.

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada’s more risk-averse business culture, but it is also a product of old-fashioned rules on banking.

Canada has also been shielded from the worst aspects of this crisis because its housing prices have not fluctuated as wildly as those in the United States. Home prices are down 25 percent in the United States, but only half as much in Canada. Why? Well, the Canadian tax code does not provide the massive incentive for over consumption that the U.S. code does: interest on your mortgage isn’t deductible up north. In addition, home loans in the United States are “non-recourse,” which basically means that if you go belly up on a bad mortgage, it’s mostly the bank’s problem. In Canada, it’s yours. Ah, but you’ve heard American politicians wax eloquent on the need for these expensive programs—interest deductibility alone costs the federal government $100 billion a year—because they allow the average Joe to fulfill the American Dream of owning a home. Thirty -eight percent of Americans own their own homes. And the rate of Canadian homeownership? It’s 68.4 percent.

Canada has been remarkably responsible over the past decade or so. It has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike our own insolvent Social Security. Its health-care system is cheaper than America’s by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy inCanada is 81 years, versus 78 in the United States; “healthy life expectancy” is 72 years, versus 69. American car companies have moved so many jobs toCanada to take advantage of lower health-care costs that since 2004,Ontario and not Michigan has been North America’s largest car-producing region.

I could go on. The U.S. currently has a brain-dead immigration system. We issue a small number of work visas and green cards, turning away from our shores thousands of talented students who want to stay and work here.

Canada, by contrast, has no limit on the number of skilled migrants who can move to the country. They can apply on their own for a Canadian Skilled Worker Visa, which allows them to become perfectly legal “permanent residents” in Canada—no need for a sponsoring employer, or even a job.

Visas are awarded based on education level, work experience, age and language abilities. If a prospective immigrant earns 67 points out of 100 total (holding a Ph.D. is worth 25 points, for instance), he or she can become a full-time, legal resident of Canada.

Companies are noticing. In 2007 Microsoft, frustrated by its inability to hire foreign graduate students in the United States, decided to open a research center in Vancouver. The company’s announcement noted that it would staff the center with “highly skilled people affected by immigration issues in the U.S.” So the brightest Chinese and Indian software engineers are attracted to the United States, trained by American universities, then thrown out of the country and picked up by Canada—where most of them will work, innovate and pay taxes for the rest of their lives.

If President Obama is looking for smart government, there is much he, and all of us, could learn from our quiet— OK, sometimes boring—neighbor to the north. Meanwhile, in the councils of the financial world, Canada is pushing for new rules for financial institutions that would reflect its approach.

This strikes me as, well, a worthwhile Canadian initiative.

 

 

 

“The Magic 8 Ball Economy – Be More Productive in a Down Economy with EPM Live”

- Kourtney Kennedy – EPM Live Team                                                  

It seems like the economy is fluctuating with the consistency of a Magic 8 Ball. Shake it each day and you will get a new answer (albeit seemingly more negative, thanks to the media). You ask, “Is the economy going to affect my business?” Magic 8 Ball answers, “Cannot predict now.” You ask, “Is the economy going to improve in the next quarter?” Magic 8 Ball answers, “Very doubtful.” With tightening budgets and fewer resources to pull from, businesses are asking us how do they leverage what they already own. How can they be more effective and produce more results? Most companies have only a piece of the solution they need for project and work management but in today’s economy, they can’t afford to purchase or implement a complete solution. Starting at US$15 a month, EPM Live provides a Fast, Low-Risk, and Proven solution that gives companies what they are looking for.

The reality is that most businesses can’t afford to purchase new servers, enterprise software, or the expertise to implement the solution or train their employees. EPM Live helps you get started today with Microsoft Office software plus EPM Live online service (Software + Service) and save on costly and lengthy IT deployments. With EPM Live’s Software + Service delivery model, you reduce risk and avoid hefty IT start up costs. EPM Live has built upon the Microsoft application stack and has created a more comprehensive and integrated Enterprise Project/Work Management system. Building on the familiar tools that many people already know, the EPM Live solution includes web parts, Microsoft Project Add-ins, SharePoint Features, SharePoint Applications, and Industry Best Practices & Process templates designed to work together to help you address your Enterprise Project/Work Management needs; implementation is quick and training costs are negligible.

Software won’t fix all your problems, but being open to trying a different method or applying proven principles to your business practice, will start the ball rolling. Shake the Magic 8 Ball again. Magic 8 Ball answers, “Outlook is good.”

  

 

 

 

 
 
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