The average Canadian is now richer than the average America, according to Toronto’s Globe and Mail. In fact, it’s not even close. The average Canadian household has $40,000 more in net value than the average American household, $363,202 to $320,000. That’s not because of exchange rates. It’s because of the falling real estate market in the United States – the average Canadian is $140,000 richer in terms of real estate than the average American, and their mortgage credit isn’t as heavy. The average American still earns more than the average Canadian, and holds more cash.
The left will no doubt use this as evidence that we need to structure our economic system more like Canada’s – heavier company spending, greater government subsidies, and the like. But that’s not our problem. Our problem is such subsidies, which created a real estate bubble in the first place. In fact, Canada is currently experiencing a massive real estate bubble – funded at least in part by American capital running north thanks to our increasingly restrictive economic system. As the Financial Post reported:
Gluskin-Sheff economist David Rosenberg … [expressed] concerns just last week that Canadian housing prices were looking unsustainable …. Canada’s housing correction could see prices fall another 10% (some economists expect 15%) said Rosenberg, which could send some mortgage holders into a negative equity position …. Housing investment accounts for a near record 7.2% of overall GDP and “when the bubble bursts, we suspect the contraction will be severe,” Capital economists said.
America doesn’t need to look like Canada, because Canada’s about to look a lot more like America.