By John Rapley
I left London on a rainy cool day, and landed in the biting crisp cold of Montreal. The sharp temperature drop seemed a fitting metaphor for a country whose warm Indian summer appears to be ending.
Canada came through the 2008 financial crisis better than most Western countries. Its tightly regulated banks withstood a tide that swamped its Wild West American peers, and its resource intensity enabled it to benefit from continued Asian demand. Housing prices held up, the shopping malls stayed full, and Canadians were relatively optimistic.
However, that mood is growing less confident. A recent poll by the Institute for Research on Public Policy found that Canadians are showing greater signs of pessimism, and concern, about their future.
Canada was able to implement a generous stimulus regime at the time of the financial crisis, one sufficient to stave off the worst. But now that the depth of the Great Recession has passed, austerity is kicking in at all levels. The risk the country appears to now face is that the need to rein in long-term spending is coming smack up against a legacy of complacency left by the country's relative stability during the crisis.
a superior model?
As I left London, Canada's central bank governor was headed in the opposite direction, hired to run the Bank of England. Having helped steer Canada through the crisis so well, Mark Carney's success was no doubt taken by many Canadians as an advertisement for the superiority of the Canadian model - the sort of achievement this country with a chronic inferiority complex does not tire of celebrating.
But the Canadian model may not be as superior as all that. When you're sitting atop vast reserves of natural resource wealth, with a low population density, it would take monumental incompetence not to prosper. True, some countries, like Congo, pull it off and make a mess of things. So Canada at least deserves credit for managing its resources well.
All the same, its contentment with its vast oil reserves is now looking a bit hasty, given that the Americans recently figured out how to release immense new reserves of oil from their own lands using fracking methods. They need Canada a lot less than they did just a few years ago.
Earlier in the autumn, the newly elected government of the province of Quebec reversed the previous government's plan to raise tuition fees at the province's universities. Shortly before Christmas, the same government announced a massive cut in funding to these universities. Next door in Ontario, teachers' unions have been manning the picket lines over plans to freeze their salaries and reduce some of their benefits.
And on it will churn. Canadians are waking up to the reality that the good days cannot last - a bit later than everyone else perhaps, but waking up nonetheless. Dealing with that realisation is not easy for governing parties which do not want to alienate their constituencies (does this sound familiar?).
Canadian public-sector workers can now spend more of the life drawing a pension than they did actually working. But rather than deal with the pension burden, since those retirees vote, governments have been more likely to shift the burden on to the shoulders of young people: taxes are going up, tuition fees are rising, entry-level jobs are being cut back, and young people are being told they'll have to pay more of their retirement expenses than their parents do.
It should hardly surprise anyone, therefore, that in a country famous for its law abiders, young Canadians are increasingly cheating on their taxes. They don't feel this system works for them, at least not the way it did for older Canadians. Such a growing generational divide is not peculiar to Canada. However, it will pose challenges to the legendary decency and 'niceness' in which Canadians have long taken pride.
The easy days are probably gone. Retaining its civility as it moves through difficult times will be the great challenge confronting Canada's current crop of leaders.
John Rapley, a political economist at the University of Cambridge, is currently on a visiting professorship at Queen's University in Canada. Email feedback to firstname.lastname@example.org and email@example.com.