Canada’s ‘perfect storm’

Re: The TSX “Trudeau Effect” gets worse,

George Athanassakos, Oct. 10

Mr. Athanassakos rightly chastises the “Kumbaya/hippie” mentality of our federal government and how that has increasingly led to investors looking outside of Canadian stock markets.

But it’s the perfect storm that is the real problem. Besides the antics of Trudeau & Co., Canadian consumers are at or near their debt ceilings and can’t afford much more spending outside of their rent/mortgages, groceries and credit card payments.

Even a temporary downturn in our economy will trigger a slew of bankruptcies.

Not the most inviting scenario for investors — especially when they notice the Bank of Canada seeing the same thing and warily eyeing interest-rate increases.

The relative lack of Canadian R&D capital compared to other G7 countries sends another bad signal: if established companies already here are hesitant about spending for the future, why should outsiders have confidence in the same market?

Add the overview of Canadian media that continues to falsely portray our David north of the border as standing up to their Goliath south of the border, and there’s one more reason why others might be hesitant to drop a loonie into a bucket of sophistry that has become the new Canadian social norm.

So while the smoke-and-mirrors of the federal Liberals may have started and contributed to the fire, removing them next October is not a guarantee it won’t keep burning investor confidence in Canadian stock markets: it’s the combination of economic bearish trends in Canada that needs to be addressed in total, not only in one of the sums of its parts.

DARREN CALABRESE / THE CANADIAN PRESS FILES Canadian consumers are near their debt ceilings and can’t afford much more spending, one reader asserts.