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In Ottawa, members of the cabinet subcommittee overseeing the Strategic and Operating Review are said to be sifting through more than 600 proposals for savings, with a view to trimming $4 billion from spending over the next three years.

Because yes, it was those same governments who now plead they have no money to spend who couldn't spend it fast enough before all this. From fiscal 2006 through 2010, the Harper government increased program spending by 40 per cent, from $175 billion to $245 billion. Per person spending increased from $5,800 in constant 2010 dollars to $7,200. The McGuinty government's record was nearly as profligate - a 61-per-cent increase in spending, from fiscal 2004 through 2011 - enabled to no small degree by the more than doubling of federal transfers in that time.

Canada has a well-documented history of attracting the best and brightest immigrants from developing countries. But many of these people wind up jobless, or in minimum-wage survival jobs. And there’s a wider economic cost to the country of under-utilizing these skilled workers.

The study finds that if immigrants’ skills were rewarded in a similar way to that of Canadian-born workers, the increase in their incomes would amount to $30.7-billion – or the equivalent of 2.1 per cent of the country’s gross domestic product.

“If we are going to continue to flourish and grow as a country, we’ve got to be very receptive to foreign capital, to foreign thinking and to foreign skills to maximize our potential,” Gordon Nixon

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In 2011, the worst year for equity investors since the 2008 global meltdown, the overall market fell by 11% while financials were down 7%. Bank stocks were largely flat.

Barclays Capital analyst John Aiken forecast an end to the double-digit profit growth that has powered the banks since the financial crisis. Yet less-bearish observers said risks from Europe’s debt crisis and other external threats make banks a wiser investment than more volatile energy and mining stocks. And traditional safe haven plays like telecoms and health care offer little upside after also outperforming the broader market in 2011. Instead of trying to mimic what worked in 2011, investors should look for companies in depressed sectors with good value, such as banks, said Barry Schwartz, a portfolio manager at Baskin Financial Services. “[Pipeline operator] Enbridge is not going to grow at 20% a year,” noted Mr. Schwartz. “However a bank stock could grow at 15% a year and they’re trading at 10 times earnings.” Canadian banks also offer hefty dividends, and did not cut them in the recent recession. Five of Canada’s six big lenders, including Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia and CIBC have dividend yields of more than 4%. Market veterans said this offers some downside protection if global financial and economic turmoil worsens. “It’s a sign of confidence on the part of Canadian bank management that, regardless of the outlook, they felt that they were in sufficiently good shape to start raising dividends&nbsp; again,” said Gavin Graham, president at Graham Investment Strategy. Toronto stocks got off to a solid start in the first week of 2012, with the composite index rising almost 2% to close at 12,188.64. But gains are expected to be modest this year, with the index reaching just 12,500 by the end of 2012, according to a Reuters poll. Many think problems outside of Canada, especially Europe’s sovereign debt crisis, will impede global growth and demand for commodities. This would hurt more growth-sensitive sectors like mining and energy, which account for more than 40% of Toronto’s composite index. Last year, base metal and energy issues plunged 27% and 17% respectively, adding up to a miserable year for cyclicals after strong performances in 2009 and 2010. Most of the gain from commodities in those years was driven by double-digit growth in China, the world’s largest buyer of industrial metals. But Chinese growth slowed last year, igniting a downward spiral in base metal mining stocks. Despite recent signs that the Chinese economy has steadied and the U.S. economy is picking up steam, eurozone debt worries are expected to dominate in early 2012. Many also expect the gridlock in Congress to worsen as the U.S. presidential election approaches, hurting investor sentiment and compounding the difficulties for resource stocks. Still, analysts said investors should not shun commodity-linked stocks indefinitely. Some think they could rally firmly in late 2012 if concern over Europe eases and the global economy gets back onto strong footing. “To the extent that the market focuses on the U.S., more cyclical names, more consumer-oriented names and more pro-growth names make sense,” said Stephen Wood, chief North American investment strategist at Russell Investments in New York. “Getting overly defensive at very high valuations is not something people want to do.” © Thomson Reuters 2012 Posted in: Economy, Investing, News, Outlook 2012, Trading Desk&nbsp; Tags: Bank of Montreal, banking, Canadian banks, CIBC, dividends, financials, investing, Royal Bank of Canada, the Bank of Nova Scotia, TSX Reuters U.S. Fed officials signal more policy action may be neededGoodman &amp; Co. boosts stake in American ApparelHedge funds take on IMF over Greek debtNot time for 'risky' spending in budget: FlahertyCopper vulnerable to price spikes due to shorts More from Reuters » var npDsqSso = /^[\s\S]*\bdisqus-sso=([^;]+)[\s\S]*$/i.test(document.cookie), npDsq_remote_auth_s3 = 'e30= 4ce72f958bc936ef5001150fc4d4fcef9fc4e256 1326247574', npDsq_api_key = '4ArDk9sCU7Y27T6Ni9ixYD3n90ZSiXdMtCOI9mcHFCEf6gnVGHpnKgereuyCJ3Rn'; Glad you liked it. Would you like to share? Facebook Twitter Share No thanks Sharing this page … Thanks! Close What do you think?Opinions expressed in comments that appear on our site are expressly those of the comment writer and not the Financial Post. Offensive language, personal attacks and unsubstantiated allegations are not allowed and may result in your account being banned. Comments containing links are not permitted. Comment threads are closed after 48 hours. For more information, read our full Terms and Conditions. If you see a typo or error in this story, feel free to <

Despite that improvement and a reduction in consumer bankruptcies last year, overall debt continues to rise — though much more slowly than before.

As the economy slows and consumers become more nervous about the future, Canadians are curbing spending and paying down some debts.

But he said given that household debt-to-income levels sit at an historic 150 per cent — that means mortgage and other debts are 1.5 times a Canadian household's average income — it would be risky for borrowing to rise further.

The government’s debt now totals more than 150% of its GDP, and continues to grow

The downgrade reflects the increasing possibility that Greece will restructure its debt by forcing current debt holders to accept longer maturities, or do what demonstrators in the streets of Athens are demanding, which is to force its creditors to take a loss on their loans.

However, European Central Bank (ECB) Executive Board Member Juergen Stark warns that the effects of restructuring “could overshadow the effects of the Lehman bankruptcy,” which is associated with the beginning of the 2008 financial crisis.

Following a notable decrease the previous month, employment edged down&nbsp;19,000&nbsp;in November, and the unemployment rate rose by&nbsp;0.1&nbsp;percentage points to&nbsp;7.4%. Despite the recent declines, employment was up&nbsp;1.2% (+212,000) from&nbsp;12&nbsp;months earlier.

A decline of&nbsp;53,000&nbsp;in part-time work was partially offset by an increase of&nbsp;35,000&nbsp;in full-time. Compared with a year earlier, the number of part-time workers was down&nbsp;1.9% (-62,000), while full-time employment grew by&nbsp;2.0% (+274,000).

Employment declined in Quebec and Saskatchewan in November, while it increased in Nova Scotia. There was little change in the other provinces.

TORONTO - Canadians are paying off more of their credit card debt and borrowing less as they cope with a weaker economy and some restrictions on credit expansion

The latest national credit trends report from Equifax Canada, released early Tuesday, says the average credit card debt fell in 2011 by 3.4 per cent.

Despite that improvement and a reduction in consumer bankruptcies last year, overall debt continues to rise — though much more slowly than before.

The total amount of debt that Canadians hold in relation to their incomes continued to inch higher in the first quarter, Statistics Canada data revealed Monday.

The debt-to-income level ticked almost a full percentage point higher to 147.3 per cent in the January to March period, the agency said. The figure is a measure of total debt load — including mortgage and consumer debt — versus disposable income.

A decline in durable goods spending pushed consumer credit lower, but stable borrowing costs as well as higher housing resale and renovation activities pushed mortgage debt higher, the agency said.

Record low interest rates created a strong demand for a relatively low number of available homes in Canada in 2010, resulting in a higher average sale price, according to a new study.

housing-related spending accounted for more than 20 per cent (or $330 billion) of Canada's Gross Domestic Product in 2010 -- a rise of 7.1 per cent from the $308 billion 2009,

"Aging baby boomers will generate demand for condominiums and for home adaptations and support services aimed at allowing them to continue living comfortably in their homes,"

Average household could spend $950 more this year

Canadian consumers could wind up paying $12 billion in higher fuel charges in 2011

higher pump prices for all of 2011 would translate into $950 getting sucked out of each Canadian household to feed their cars and trucks.

Canada’s labour market has hit a wall, with job declines in three of the past four months suggesting turmoil outside the country’s borders is denting the confidence of employers.

The slowdown comes as deepening global uncertainty is gnawing away at business confidence. Consumers, too, are growing cautious, with a report on gross domestic product earlier this week showing both spending and total domestic demand cooling in the third quarter.

Manufacturing employment tumbled to another record low last month, while in the finance and real estate industry, three-month average job losses are the steepest on record. Meantime, government hiring – a key source of employment in the past few years – is expected to weaken amid budget cuts.

These right-thinking stalwarts decided to issue their own minority report, essentially blaming government for much of what went wrong.

Put simply, the theory holds that prices of stocks and other assets reflect all available information and that the markets as a whole are smarter than any individuals, who can’t hope to outperform them. Nothing in the hypothesis can explain the frequent bubbles and busts, strange stock valuations or the inconvenient truth that some shrewd investors do outperform the market.

based on the assumption that a reduction in government spending will be fully offset by increased private consumption and investment.

recent report. Canadians also owe far more then they earn. The report, released by the Vanier Institute of the Family last month, says the debt-to-income ratio is a record 150%. That means for every $1,000 in after-tax income a Canadian family earns, they now owe $1,500.

In previous reports tracking the health of Canadian family finances, the institute found that the debt-to-income ratio has been steadily climbing over the past 20 years. In 1990, the average family debt reached $56,800 with a debt-to-income ratio of 93%, making the current $100,000 figure a substantial increase of 78% over the past two decades.

1. Mortgages.

Canadians have set a new record for household debt, a sign that many families are leaving themselves vulnerable to an economic shock. The debt burden of Canadian households has surpassed levels of both the United States and the United Kingdom

Roughly one in 10 Canadians is in a vulnerable financial position, Mr. Carney said – meaning that the cost of servicing their debt consumes more than 40 per cent of their income – “and that, historically, is where people start to have issues in making their debt service payments.”

Canada’s economy is faring relatively better than its peers, corporate balance sheets are strong and its banking system is in far better shape. The risk is that strained debt levels put cracks in the system.