STEVE INSKEEP, host:
Lawmakers were rushing to finish the language of the bill now, though, because it gives President Obama something to show other world leaders he is meeting in an economic summit today. That meeting is the G-20 Summit in Toronto. World leaders will be talking about the world economy and financial regulation, and they're meeting in a country whose economy may be the envy of the world right now. Canada has rebounded from last year's crisis and is in better shape than almost any other rich economy.
We're going to talk about this with Craig Alexander. He is chief economist at Canada's TD Bank, and he is in Toronto.
Welcome to the program, sir.
Mr. CRAIG ALEXANDER (Chief Economist, TD Bank Financial Group): Oh, thanks for having me.
INSKEEP: So how healthy is Canada's economy?
Mr. ALEXANDER: Well, Canadian economy has really snapped back from the recession. We did experience a deep recession in late 2008, early 2009, but it wasnt as deep as the recession that Canada had in the early 90's. So in actual fact, although we talk a lot about the great recession, in the case of Canada, it was a serious recession but it wasnt the worst we'd seen.
INSKEEP: What did Canada do differently than other countries?
Mr. ALEXANDER: Well, I think there, though, was a couple of things. Number one, we saw once the global economy started to stabilize in the middle of 2009, commodity prices bounced back and Canada is a big commodity exporter. Number two, the Canadian banking system weathered the financial storm remarkably well and because of that, when the Bank of Canada matched the Federal Reserve in terms of moving interest rates down to effectively zero, Canadian banks were opened for business. And what that meant was that businesses and consumers could take advantage of historically low interest rates.
So we saw something quite unique in the Canadian experience, which was at a time when unemployment was rapidly rising, people ran out and bought houses, and as you might expect when you have a strong real estate market, that tends to filter through to strong purchases of furniture, appliances and home-related items. So we saw consumer spending. We saw housing really rebound quite sharply.
INSKEEP: Do you think that stronger regulation in Canada helped to prevent the financial system from having such disasters as we saw in the United States?
Mr. ALEXANDER: There's a confluence of factors that contributed. I think that good and prudential regulation of the banking system and the financial system had an influence. I think in general, Canadian financial institutions tend to be quite conservative about their lending practices. For example, every mortgage taken out in Canada is income tested to make sure you can make your payments. And then we - in general, I think Canadians tend to be quite conservative with respect to their finances. So I think there was really a whole variety of things working together that helped Canada weather the financial storm.
INSKEEP: So Mr. Alexander, as other world leaders gather in Toronto for this economic summit, I assume that Canadians are far, far too polite to actually gloat.
Mr. ALEXANDER: No, I dont think Canada will be gloating. I think that the government of Canada is going to be emphasizing the importance of prudent regulation with respect to the financial system. And from a point of view of global financial reforms, it's going to be highlighting some of the lessons that seem to have served Canada well during its recent experience.
There's also going to be a lot of discussion at the G-20 meetings about when governments should be lowering their debt levels. And Canada has a unique perspective on this because in the 1990's Canada ran up very high deficit levels, very high debt. It got to the point when the Wall Street Journal quoted the Canadian dollar as "turning into the peso of the North." And a consequence, Canada went through very painful many years of fiscal consolidation.
So I think there's a whole variety of things from financial reform to fiscal rebalancing that Canada will have a perspective on.
INSKEEP: Craig Alexander is chief economist at TD Bank Financial Group.
Thanks very much.
Mr. ALEXANDER: Oh, it's been my pleasure.