The Associated Press reported today that the credit crisis is now hitting Canada too.

The global credit crisis is starting to restrict the ability of Canadians to obtain loans for mortgages, cars and investments, Canada’s finance minister said Thursday.

But the rest of the article goes on to say that “Canada’s banks are the world’s strongest”, and that “Canada will avoid the mortgage meltdown and banking crisis that are hitting the United States and Europe hard”.

It would not be entirely surprising if Canada escapes the financial crisis entirely, or at least fares better then the rest of the world.  This is a testament to Canada’s transparency on public finance, as well as their drive to reduce reckless spending.  Canada’s current national debt stands at $457.6 billion, as of the end of 2007-2008 fiscal year, but it has declined every year since the 1995-1996 fiscal year, as shown in the graph below.  Canada had a surplus of $9.6 billion for 2007-2008.


Canadian accounting methods - Not only has the national debt of Canada been decreasing, but the government is using accepted and well defined accounting standards, unlike the United States, which intentionally conceals the truth behind their national accounts.  The annual financial report of the government of Canada is a model of transparency that employs generally accepted accounting principals (GAAP).  If the United States is looking for a way out of the current financial mess, they can start with looking toward Canada’s example of responsible accounting.