Counting blessings

It seems that every time I sit down to write this column, there’s nothing to discuss but more doom and gloom. It’s been that kind of year. But, hey, it’s the holiday season. It’s a time for optimism and fellowship and good cheer. It’s a time when we should be counting our blessings. So this time I am going to do exactly that. Here are some of the things that affect our financial life that we should be thankful for this year.

Our banking system. Almost every other country in the world has gone through a banking crisis and some are still facing rough times. We’re one of the few exceptions. No one is worried about any of our major banks failing. People aren’t lining up to get their money out. Heck, some banks are so well off they’re even raising dividends.

I know, some people, such as those involved in the Occupy movement, hate the banks and see them as the symbols of bloated capitalism. I have news for them: without a sound and functioning banking system, our economy would be in chaos and our personal lives would be nightmarish. If you doubt that, take a look at the experience of any country that has gone through a banking sector collapse. It’s not pretty.

We ended up with the system we have for two reasons. First, the government allowed it to develop as a commercial oligarchy, with only a few large players. As a result, we did not experience the fragmentation that has plagued the U.S. and other countries. Second, Ottawa imposed tight controls on the sector and strongly enforced them. At one point, that resulted in complaints of rigidity and whines that our banks were too stodgy. We don’t hear any of that now.

Of course, the banks aren’t perfect — no business is. But, on the whole, they work well, they’re dependable, and they’re solvent. We can’t ask for much more.

The loonie. Back in the days when the loonie was trading at around US$0.62 and seemed destined to fall even lower, I went on record as advocating that we peg our currency to the U.S. dollar. I was wrong, and I’m thankful now that we didn’t. As we are seeing in Europe, a common currency inevitably leads to a loss of fiscal independence and creates profound strains among the partners. I would certainly not want to see our policies being dictated by Washington these days – our governments have proved far more adept at handling public finances than the Americans have.

Jim Flaherty. I believe Paul Martin was one of the greatest finance ministers we ever had because of his success in pulling Canada out of what seemed to be a fiscal death spiral and setting the stage for more than a decade of budget surpluses. Mr. Flaherty has yet to face a challenge of similar magnitude but he has been solid and steady during his tenure. The decision to kill the income trust sector earned him widespread criticism but that was his only major misstep. On the plus side, he skilfully managed the financial crisis of 2008-09, has taken some constructive steps to improve retirement savings, introduced pension income splitting, brought us Tax-Free Savings Accounts, cut corporate taxes to make our industries more competitive, highlighted the importance of financial literacy, and more. Finance ministers, by definition, are unloved but, when we get a good one, we should recognize it. Mr. Flaherty qualifies.

Mark Carney. There was a time when Bank of Canada governors were grey old men who toiled in the bureaucratic shadows of Ottawa. Not any more. Mr. Carney is front and centre and is not afraid to speak his mind on any issue within his purview. He has admonished Canadians for spending beyond their means, criticized international bankers for objecting to tighter scrutiny and regulations, and pushed European politicians to adopt concrete measures to protect their currency and their economies. The respect with which he is regarded world-wide was confirmed last month when he was named as chairman of the Financial Stability Board, the organization charged with reforming global financial institutions.

Sound mortgage policies. The terrible human tragedy of people being forced out of their homes that we have been witnessing in the U.S. for more than two years has not crossed our border and hopefully never will. The reason: we never allowed our financial institutions to play fast and loose with their mortgage lending rules. Yes, we did relax them for a short time, allowing 40-year amortizations and 5 per cent down payments. But as soon as it became apparent how potentially disastrous that could be, the government tightened the screws and it is now more difficult (although not impossible) for families to get in over their heads.

Our country. Canadians are fortunate to live in a country that has been showered with resources. This is a bountiful land, rich in petroleum, minerals, forests, fertile soil, and fresh water. We live in a democracy where the rule of law is prevails and human rights are respected. We are truly blessed and this is the season to remember that.

So Happy New Year and be thankful that you live in a country as blessed as this one.

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