Salena Zito

BUCKHORN, Ontario – Candy Penny and her husband have owned their novelty shop here just long enough to not know what it was like when American tourists flooded this small Peterborough County town in Canada’s “cottage country.”

“I understand that, before the recession, every other license plate in town was from a different (American) state,” said Penny, a Michigan native who moved here when she married a Canadian.

“Between that and the spike of gas prices in 2008 and again this summer, and the required passports to cross the border, our main business is Canadian.”

Her shop is in a century-old wooden church. It is artfully arranged with birdhouses, beach towels, candles, charming retro signs of the Kawartha Lakes, and moose- and deer-antler cottage décor. “And it is pretty good business, at that,” she said.

That is because, unlike its Yankee neighbor, Canada has a robust economy.

Buckhorn is bustling. The parking lot of the provincial liquor store was so full that cars spilled onto both sides of the narrow two-lane road; the Foodland’s lot also was full, forcing shoppers to create spots along a slope down to Buckhorn Lake.

Teddy’s Antiques shop overflowed, and the Olde Icehouse bar’s outdoor seating had a long wait for lunch.

As America’s woeful economy and high unemployment reflect its increasingly pessimistic outlook, things look better up here.

Canada’s economy is doing better for several reasons, says Matthew Lebo, political science professor at Stony Brook University in New York.

It has “a well-regulated banking system, which prevented banks from taking excessive risks with depositors’ money and from borrowing based on assets of dubious value,” he explained. So it had no need for a public bail-out of private companies that took bad risks.

Lebo said Canada’s diverse population and influx of educated, entrepreneurial immigrants over the last 30 years has led to a constant supply of innovation and new businesses.

It also did not have a housing bubble, says former Federal Reserve governor Larry Lindsey, “So, therefore, no crash.”

Canada’s housing sector has been a continuous bright spot, taking the country out of recession swiftly; the U.S. housing market remains abysmal, contributing to a faltering economy and no job growth.

“They are also just booming with everything that surrounds the energy industry,” said Lindsey.

According to Lebo, “Canada is really 13 economies, mostly energy resource-based except for the Windsor-Quebec corridor, where heavy industry and … financial and business sectors are concentrated.”

And here’s a blow: More cars are made in Ontario than in Michigan, he said.

Canadian provinces are more economically independent than U.S. states, Lebo said, so they have greater power over their economies, health and education systems.

One of the things the United States can do to keep up with Canada is to unleash our natural resources, says John Felmy, chief economist for the American Petroleum Institute.

He said shale natural gas has immense potential for the U.S. energy industry.

“What they are doing in Canada with their energy recourses in incredible,” he said. “We have that same potential … thanks to technological advances in hydraulic fracturing.”

Instead, Canada is America’s largest supplier of oil and natural gas.

Perhaps we can learn from Canada’s example of developing its oil, natural gas, uranium and hydropower resources, generating jobs and improving its trade balance.

Along with a booming economy comes booming prices, of course: A pound of bacon here costs double its U.S. price, a pint of blueberries is triple the U.S. cost – and if you want a flimsy bag for groceries, “it’s five cents a bag,” says a cashier.

“Americans don't typically like to hear that, especially if they are stocking their cottages with supplies,” she said, sympathetically.

Prices at the gas pump are equally painful; the average last week was $1.25 a liter. With roughly four liters to the gallon, you’re staring at $5 a gallon.

A resort owner near Sandy Lake said he really felt the pinch when both countries were in the beginning of recession in 2007: “Cottages sat vacant for too long.”

This year is back to normal, he said. “All of my cottages are booked through August” – although with a lot fewer Americans.


Salena Zito

Salena Zito is a political analyst, reporter and columnist.