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While there is a general assessment that the US and European banking crisis will rub off on Canada, and provoke a recession, possible later in 2008, or early 2009, UBS acknowledge that Canada is in relatively good economic condition which will mollify the impact on the country.

Recession? You don’t say | Globe and Mail

“An important point of distinction for the Canadian economy is that, for the first time most can surely remember, the underpinnings are sound going into a downturn,” UBS said in a note to clients. “Specifically, consumer debt service ratios are historically only average, the budget is in balance with debt ratios less than half US/European levels. Accordingly, the economic risk in Canada is far lower, and there is more ammunition available to undertake countercyclical initiatives, if so desired.”