- News Release 2009-096 -

Archived - Backgrounder

Formula for Success
Canada's Winning Record

Canada's Economic Action Plan

• Canada entered this downturn in a strong economic and fiscal position.
• Our housing markets have avoided the problems seen in other countries, our financial system and our banks are the soundest in the world, and we have the lowest debt-to-GDP ratio among all advanced industrialized countries.
• From this position of strength, the Government responded quickly and boldly with an economic stimulus package that ranks among the largest in the world.
• As a result, the deterioration of Canada's economy has been less severe than inmost major industrialized economies.
• In particular, the loss of jobs in Canada has been considerably less pronounced than in the United States—our largest trading partner.
• The unemployment rate in Canada is now one full percentage point lower than it is in the United States—the first time this has occurred in a generation.
• Further, the IMF expects Canada will be the least affected by the global downturn and that our recovery will be among the strongest in the G7.

Total Government Financial Balances: Canada and Advanced Economies

• Canada entered the current crisis with a strong fiscal position, recording a surplus of 1.6 per cent of GDP in 2007. This contrasts with the situation in most advanced economies, which were, on average, already in deficit when they entered the financial crisis.
• The IMF projects Canada's total government financial balance-to-GDP ratio will deteriorate to a deficit of 4.1 per cent in 2010.
• In comparison, the IMF projects that the total government financial balance-to-GDP ratio in advanced economies will, on average, deteriorate to a greater degree, posting a deficit of 8.1 per cent in 2010.

Total Government Net Debt: Canada and G7

• Canada's sound fiscal position is the product of significant debt reduction efforts by the Government before the global recession began.
• In 2007, prior to the onset of the crisis, Canada's total government net debt-to-GDP ratio was 23.5 per cent, considerably lower than the G7 average of 52.9 per cent.
• Moreover, the IMF projects that among G7 nations, Canada will have by far the smallest rise in its net debt-to-GDP ratio between 2007 and 2014. Canada's net debt ratio is projected to rise by just 5.9 percentage points over this period, compared to a G7 average of over 40 percentage points.

Please note: The data in this document are valid up to and including October 1, 2009.