Sunday, September 12, 2010

USA VS CANADA, Financially Speaking

Just some random thoughts after returning from vacation to Colorado for a family wedding. The following are personal observations, not attacks. Please note, I am one of the few fortunate people with dual American and Canadian citizenship. My parents moved to Canada when I was six months old. At 19 I decided I wanted to become a Canadian citizen which I was granted but if you are born in the States you are always still a US citizen. I spent the last week driving around Colorado visiting family (I have a large one) and vacationing. Here are just a few differences hubby and I observed:

The average Canadian has no idea of the devastation of the recession on the average American citizen. We, frankly, have barely been touched compared to our neighbors to the South:

Canadian real estate prices dipped slightly, US real estate dropped like a rocket.
Canadian banking laws protected most from being upside down in their mortgages, many US banks went out of business with savings and were little to no help when homeowners were struggling to pay their bills. Granting zero down mortgages to people who don't understand they cannot afford home ownership = foreclosure and upside down equity. In Canada foreclosure is fairly rare, even during the recession. Most Canadian foreclosures result from divorce, death of a spouse, or business failure. Nevada posted the highest foreclosure rate in July, with one in every 82 households receiving a foreclosure notice. Pretty scary, and my family is not immune. My American Aunt and Uncle lost their landscaping business in 2008 which resulted in their home being foreclosed on. No one pays for landscaping when they can't pay for groceries. Imagine being 58 years old with zero net worth. Fortunately, both my Aunt and Uncle were able to get good jobs. They currently rent, as many of the foreclosed on do, trying to rebuild their life.

The average Canadian senior citizen with no income except CPP and old age pension has a much better standard of living if compared to their US counterparts. Low income housing is a way of life for most seniors in the USA. Unfortunately there is a very large number of US seniors still carrying mortgages. I saw an article in the local newspaper where two seniors age 69 and 71 were bragging about their credit score which allowed them to refinance their home last year at a lower rate. Good for them, but frankly, what the heck are you doing with a mortgage in your 70's? If you need a mortgage that late in life, perhaps you should be renting and bank whatever equity you have to maintain your lifestyle (in my opinion).

Most US citizens have no idea what free or cheap health care feels like. Canadians don't avoid going to the doctor to prevent large bills, which means earlier diagnosis and saves more lives. Cousins were amazed to hear of our free health care (Alberta) or very cheap health care in other Provinces.

So, all in all although the US is a great place to visit, with the option to choose where I live, I choose Canada. We pay extremely high taxes, but, get what we pay for (and no, I am not a Liberal!). Here is hoping we are seeing the end of this crappy recession and things will start to get better in both countries.

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