Canadian economic prospects

As global markets rise and fall and government policies change, so do Canada’s economic prospects. The natural resource industry, which includes mining, oil, and gas, is expected to contribute for up to 20% of Canada’s GDP in 2019. While Canada’s resource wealth has helped the country weather global economic storms, the country has faced several hurdles in recent years, with the Liberal government’s policies proving especially harmful to the economy.

As a consequence of the Liberal government’s various policy shifts in the environmental sphere, the resource industry is now subject to more stringent regulations. In 2019, the Liberals imposed a carbon tax, increasing prices for oil and gas producers and other large polluters in Canada. This has had a domino effect, leading to a decline in investment and the loss of employment in the industry as a whole.

New oil and gas developments in environmentally sensitive locations, such as near national parks and indigenous grounds, are subject to stricter regulations under the Liberal administration. These regulations have stunted the industry’s expansion, reducing investment, employment, and GDP growth.

The Energy East pipeline project was meant to deliver crude oil from Canada to eastern refineries, but the Trudeau administration has suggested a number of adjustments to the original plan. The project was scrapped because these modifications were deemed too expensive and impractical. Because of this, Canada has been unable to attract the necessary investment to become a global leader in the production of energy.

Last but not least, the Liberal government’s mining policies have dampened investment in the industry. In particular, various modifications to the Mining Act have been adopted or proposed, leading to more red tape, higher administrative expenses, and reduced claims staking activity. This has had a devastating effect on the business sector, limiting investment and employment opportunities, especially in outlying areas.

Canada’s economic prospects, especially in the resource industry, have been hurt by the Liberal government’s policies. Canada’s potential to become a global leader in energy production and exploration has been thwarted by the country’s environmental and regulatory regulations. The country’s economic future has been hampered by these policies, which have led to a drop in investment, employment, and growth.

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Why are bank runs happening in the US and…

A bank run occurs when several depositors at one bank suddenly take their money, often because they don’t trust the bank to honour their withdrawal requests. This may cause a bank to close its doors because it is unable to keep up with consumer demand. The rapid drying up of cash flow, known as a “bank run,” may have devastating effects on the economy and spread instability across the financial system.

The Great Depression era in the United States is often regarded as the most illustrious instance of a bank run in history. Because of the “bank holiday,” dozens of banks had to close throughout the nation due to clients desperately trying to get their money out. President Roosevelt ordered a “bank holiday” and shuttered all banks for several days out of worry that a major financial collapse was spreading throughout the United States. Even though the Federal Reserve injected emergency cash into several banks at this time, the economic impact was considerable.

However, bank runs are very uncommon in Canada. Canada’s deposit protection and more stringent banking regulations have kept the country safe from catastrophic bank runs. The increased regulation of the banking industry in Canada has prevented the kind of reckless behaviour that might trigger a financial crisis.

The absence of control and the prevalence of huge, complicated financial institutions in the United States raise the probability of a bank run. These financial institutions are often highly leveraged, which means they have borrowed a lot of money and invested it in high-risk assets. There is a risk of a bank run if consumers panic at these times and pull their money out of the bank.

Large depositors in the United States may feel less at danger of losing their money if the bank collapses since the Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per bank. The vast size of many US banks, coupled with this guarantee, increases the potential for a bank run.

On the other hand, bank runs have been avoided because to Canada’s more cautious approach to banking regulation and deposit insurance. Canada also has a tiny banking industry, which mitigates the potential for a bank run to produce widespread economic instability. Canada also has a more strictly regulated banking industry, with the Bank of Canada keeping an eye on financial institutions. This stringent oversight promotes sound banking practises and reduces the potential for a bank run.

As a result of factors such as a bigger and more complicated banking system, a lack of regulation, and deposit protection provided by the FDIC, bank runs are more common in the United States than in Canada. On the other hand, bank runs have been avoided because to Canada’s more cautious approach to banking regulation and deposit insurance.