It's mostly anecdotal evidence, but I think any trip to the many retail locations dotting the north country will see a healthy representation of Ontario license plates. The simple reason for this is the fact that the Canadian dollar has been near par for much of the last month (currently at $0.94). I think the question for local retailers and local politicians (trying to forecast sales tax revenues for 2010-11) is: How sustainable is this trend?
Via Jonathan Tonge's America Canada Blog...
Average Canadian home prices hit roughly $320,000 US – an all-time high. Residential mortgage debt in Canada has over doubled since 2002. We will surpass the US in per capita residential debt within the next year.
In 2009 alone, we will add 100 billion in fresh residential mortgage credit (equivalent of about 1 trillion in the US on a per capita basis). The average price of a detached Toronto home has approached $600,000. The listing-to-sales ratio in Toronto, the fifth largest city in North America, has surpassed the late 1980’s bubble.
In the greater Vancouver area, our third largest metropolis after Montreal, the average price of a detached home in March 2008 was $921,000. In fall of 2008 the market tanked, but only to find itself growing again in 2009. By September 2009 the average price was back up to $904,000. Average household incomes in Vancouver hover somewhere around the $70,000 mark.
Exports to the United States have fallen nearly 50%, in part thanks to “Buy America”.
In Ontario lurks an economic and political disaster. US Steel purchased Canada's largest steel manufacturer known as Stelco two years ago. They made the purchase just after Stelco had received hundreds of millions from Ontario’s provincial government to keep operating. Within days of “Buy America”, US steel shut down the Canadian Stelco plant.
A few months ago the benefits for the laid off workers dried up. The union notified US Steel that they would have to either bring the workers back or retire them and pay out their pensions. The company had no interest in paying out the pensions. US Steel decided to bring the Canadians back to a make-work project. Instead of making steel they painted all the buildings in a fresh coat of blue paint. If you understand the size of the Stelco plant and buildings than you can understand what a formidable task this was. A couple weeks later all the buildings were blue. The workers benefits have been renewed and they were laid off again.
Wait until more Canadians find out about this. “Buy Canada’, or more plausibly, “Do Not Buy America” will gain steam. We’re a free trade country by and far, but “Buy America” has been a hard hit below the belt for most of us."
I don't agree with some of the author's conclusions but those observations are important. Canada is by far our largest trading partner and it's worth noting that if a Canadian real estate bubble bursts the ramifications will be far reaching for the US.