How Gold Is Mined: CANADA IS DOOMED: Three Signs That The Country Up North Is Screwed Beyond All Recognition

The Three Reasons Canada Is In Big Trouble - Business InsiderFeaturedTrendingRecent

Login Remember me I forgot username or password Login with Twitter Login with Facebook Login with LinkedIn Login with Google Register EventsBI IntelligenceTechFinancePoliticsStrategyLifeEntertainmentAll Tech Enterprise Science

The Social Media Advertising Ecosystem Explained

The iPhone's New Back Button Has The Former Design Director Of The New...

Why This Whole 'Secretly Rating Men On Facebook' Thing Won't Last

How To Become Invisible To The NSA's Domestic Spying Program

How McCormick Got Its Electricity Use Down To Net Zero

These US Cities Can't Hire Tech Workers Fast Enough

13 Enterprise Apps That Drive People Nuts Even Though They're Free

14 Tech Execs Who Could Probably Kick Your Butt In A Fight

Is This Creepy Looking Animal The Jersey Devil?

Updated Flood Maps Show How Vulnerable New York City Really Is

Montana Conservationist Accused Of Declaring War On Wolves

These Are The 2013 Atlantic Hurricane And Tropical Storm Names Finance Markets Your Money

The Trailer For Martin Scorsese's 'Wolf Of Wall Street' Looks Sick —...

A Finance Worker From Connecticut Was Just Crowned Miss USA

Doug Kass Leaves Twitter, Blames 'Too Many Haters'

George Soros' Older Brother Made An Engineering Breakthrough That...

The Worst Chart In The World

Yes, At Some Point China Will Implode

11 Tapirs That Are Worried About The Taper

35 Years Of Failed Economic Forecasts In One Chart

The 10 Cheapest Cities In The World

Here's Where You Can Buy A House With A Pool For $100,000 Or Less

Dick's Sporting Goods 'Buy One Get One Free' Coupon Includes A Major Fail

A Good Dad Is Worth $23,344 Politics Military & Defense Law & Order

CANADA IS DOOMED: Three Signs That The Country Up North Is Screwed...

Canada Mayor Crisis Spreads: Montreal Mayor In Custody

Former Romney Economic Adviser Writes New Paper In Defense Of The '1...

Obama's Approval Rating Plummets, With A Stunning Drop Among Young People

Syrian Rebels Unleash Unprecedented 6-Ton Car Bomb, Killing 60

Microsoft Alienates Troops With The Always-Online Xbox One

Guantánamo Prisoners Singing Akon's 'Locked Up' While Being Force Fed...

Lawsuit Over CIA 'War Crimes' Probe Points To The Underbelly Of Secret Ops

LAWSUIT: Utah Cops Shot 21-Year-Old Woman 'Assassination Style'

How Flint, Michigan Became The Most Dangerous City In America

Why 3 Of America's Most Dangerous Cities Are In Wealthy Connecticut

This Man Is Either The World's Biggest Patent Troll Or A Champion Of... Strategy Careers Advertising Retail Small Business

12 Of The Shrewdest Business Maneuvers Of All Time

Cheesecake Factory's 174 General Managers Are Given New BMWs Every 3 Years

What 6 Executives Learned From Going On 'Undercover Boss'

Booth And Columbia MBA Students Get The Highest Summer Pay

What New Yorkers Earn For A Living

71% Of Millennials Want Their Co-Workers To Be A 'Second Family'

What's It Like Working For No Money?

INSTANT MBA: There Are Challenges Unique To Leadership Roles

Google's Little-Seen Ad About Gay Marriage In France Will Have You...

Web Ad Business About To Suffer Stunning Defeat At Hands Of 'A Volunteer...

Siri Takes Another Beating From Microsoft In Latest Anti-iPad Commercial

'Million Moms' Are Upset About Kraft's Naked Salad Dressing Man

Cheesecake Factory's 174 General Managers Are Given New BMWs Every 3 Years

This 4-Person Startup Is Trying To Change Online Shopping As We Know It

What 6 Executives Learned From Going On 'Undercover Boss'

QUIZ: Who Do These Famous Frames Belong To? Life Transportation

12 American Bars To Drink At Before You Die

QUIZ: Who Do These Famous Frames Belong To?

China's Plan To Build The World's Tallest Skyscraper In 90 Days Is...

6 Amazing Recreated Photos Of Kids And Their Dads

The First Test Flight Of The Brand New Airbus Jetliner Went Perfectly

Flight From Egypt To New York Diverted To Scotland After Threatening... Entertainment Sports

Miss Utah Falls Apart While Answering An Easy Question About Women...

The First Trailer For 'The Wolf Of Wall Street' Is A Giant Gatsby-Sized...

Britney Spears Releases New Squeaky-Clean Single 'Ooh La La'

'Man Of Steel' Flies Past The Competition With Record June Opening —...

Brazilian Phenom Neymar Scored A Volleyed Goal From 20 Yards Away...

Tony Parker Explained Why The Miami Heat Keep Giving Danny Green Wide...

Report: Allen Iverson Allegedly Kidnapped His Own Children And Is...

LeBron James Got Shut Down By A Chubby French Role Player Last Night Sections A-ZAdvertisingCareersEnterpriseEntertainmentFinanceMarketsLaw & OrderLifeMilitary & DefensePoliticsRetailScienceSmall BusinessSportsStrategyTechTransportationYour MoneyYour NewsListsSilicon Alley 100Digital 100Silicon Valley 100Clusterstock 50The Most Important ChartsThe Life 50More »Sponsored Sections10 Things To Know In Small Business Best New Small Businesses in AtlantaComing Up NextThe Future of BusinessInspired to StriveMonday Scouting ReportSmall Business, Big IdeasVideo RevolutionToolsLatestHiveJob ListingsDocument CenterAccount PreferencesRegisterVideoMobileFull ArchivesAbout BIAboutJobs at BIMastheadContactAdvertiseContributers FAQLegal Fine PrintFollow BINewslettersAlertsRSSTwitterFacebookLinkedInGoogle+CompaniesAuthorsCategories From To You have successfully emailed the post. Politics More: Canada Housing Bubble Rob Ford Oil Boom CANADA IS DOOMED: Three Signs That The Country Up North Is Screwed Beyond All Recognition Josh Barro Jun. 17, 2013, 11:21 AM 1,401 1 Tweet!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");EmailShare on Tumblr

Toronto Mayor Rob Ford: I'm not a crackhead. Brett Gundlock, Reuters

You might be under the impression that everything is going pretty well in Canada, which had no banking collapse and only a mild recession in 2008-9.

You would be wrong.

The country is beset by political corruption scandals of the sort that people focus on when the economy is good. But it also has a massive ongoing housing bubble, and its economy is being propped up by a global commodities boom that now shows signs of slowing.

Let's break down the three ominous signs.

First, the scandals:Montreal Mayor Michael Applebaum got arrested this morning, charged with 14 counts including fraud and conspiracy. Applebaum was appointed to replace Gérald Tremblay, who resigned last year after getting caught up in a separate corruption scandal involving kickbacks from construction firms with alleged mafia links.Toronto Mayor Rob Ford may or may not be on video smoking crack; last week, Toronto and Ontario police raided an apartment complex linked to the alleged video and arrested 43 people, including the two pictured on either side of Ford in this photo.The mounties are investigating whether Prime Minister Stephen Harper's former chief of staff, Nigel Wright, committed a crime when he gave a Conservative senator over $90,000 to pay back expenses that he had improperly claimed.London, Ontario Mayor Joe Fontana is under indictment for allegedly using public money to pay for his son's wedding reception. London is the 11th largest city in Canada. Fontana is seeking re-election.Laval, Quebec mayor Alexandre Duplessis asked that his city, Canada's 13th largest, be placed in receivership after "he and almost every sitting municipal politician in the city was linked to illegal political financing by a corruption-inquiry witness," according to the National Post. His predecessor as mayor has been charged with two counts of "gangsterism."Missassauga, Ontario Mayor Hazel McCallion was acquitted last week of conflict of interest. In 2007, she voted to reduce fees owed by a development company in which her son is a principal by $11 million. One of the defenses offered by McCallion, age 92, was that she did not read one of the relevant documents because she didn't have her reading glasses. Missassauga, a suburb of Toronto, is the sixth largest city in Canada.Not all of the scandals are so serious. Winnipeg Mayor Sam Katz was recently acquitted of conflict of interest for his decision to host a city council Christmas party at a restaurant he owned. The judge said he showed "bad political judgment" but didn't break the law. He also apologized in May after the Winnipeg Free Press called him out for littering.

Petty corruption undermines public confidence in government, though it's also the sort of thing people focus on when the economy is healthy and they need something else to talk about. Are Canada's municipal scandals a sign of underlying economic health?

Second, Canada has a big, brewing debt problem...

Paul Krugman argued over the weekend that Canada may not be as economically secure as it looks. Canada's relatively easy time with the global economic crisis is often credited to its highly-regulated banking system. But Krugman argues that the big problem in the U.S. was not the banking crisis but the bursting of the real estate bubble and the huge overhang of household debt that it caused.

economist housing price chart The Economist

Home prices in Canada are now double what they were in the 1970s in real terms. Historically, over the very long term, real home prices tend to be flat.

Krugman argues:

So if the new, non-bank-centered view is right, Canada ought to be quite vulnerable to a big deleveraging shock despite its boring banks. Of course, people have been saying this for several years, and it hasn’t happened yet — but remember, the US housing bubble took a long time to pop, too.

And third, one of the big factors that has allowed Canada's house prices to stay inflated may be coming to an end. As an oil exporter, Canada has been one of the big beneficiaries of the global commodity boom.

canada real 2012 fuel exports Business Insider, data from Industry Canada

In 2012, Canada exported mineral oil, fuel and wax products and bituminous substances worth nearly $100 billion (USD), up from $20 billion in 1990 on an inflation-adjusted basis. Petrodollars have been raising Canadian incomes and allowing the country's residents to bid up home prices.

But as worldwide demand slows and the commodity boom wanes, Canada may be in for a home price bust — and bigger problems than municipal corruption.

To embed this post, copy the code below and paste into your website or blog.600px wide (preview)400px wide (preview) 300px wide (preview) Alerts Newsletter URL Recommended For You

These Are The Biggest Changes Coming To Your iPhone These Are The Biggest Changes Coming To Your iPhone More: Canada Housing Bubble Rob Ford Oil Boom Get Alerts for these topics »

Josh Barro $('.icon-tooltip').tooltip(); HOT: 11 Charts That Show Why Detroit Is Falling Apart And Heading For Bankruptcy Advertisement:Join The Discussion OR Login With Facebook Login With Twitter Login With Google Submit the comment for Insider Status Comments Apply To Be An "Insider" » Insiders0All Comments1

Loading CANADA IS DOOMED: Three Signs That The Country Up North Is Screwed Beyond All Recognition CANADA IS DOOMED: Three Signs That The Country Up North Is Screwed Beyond All Recognition

Corruption, housing bubble, and the end of the commodity boom.

Get Politics Emails & AlertsLearn More »IndustryAccountingAirlines/AviationAlternative Dispute ResolutionAlternative MedicineAnimationApparel & FashionArchitecture & PlanningArts and CraftsAutomotiveAviation & AerospaceBankingBiotechnologyBroadcast MediaBuilding MaterialsBusiness Supplies and EquipmentCapital MarketsChemicalsCivic & Social OrganizationCivil EngineeringCommercial Real EstateComputer & Network SecurityComputer GamesComputer HardwareComputer NetworkingComputer SoftwareConstructionConsumer ElectronicsConsumer GoodsConsumer ServicesCosmeticsDairyDefense & SpaceDesignEducation ManagementE-LearningElectrical/Electronic ManufacturingEntertainmentEnvironmental ServicesEvents ServicesExecutive OfficeFacilities ServicesFarmingFinancial ServicesFine ArtFisheryFood & BeveragesFood ProductionFund-RaisingFurnitureGambling & CasinosGlass, Ceramics & ConcreteGovernment AdministrationGovernment RelationsGraphic DesignHealth, Wellness and FitnessHigher EducationHospital & Health CareHospitalityHuman ResourcesImport and ExportIndividual & Family ServicesIndustrial AutomationInformation ServicesInformation Technology and ServicesInsuranceInternational AffairsInternational Trade and DevelopmentInternetInvestment BankingInvestment ManagementJudiciaryLaw EnforcementLaw PracticeLegal ServicesLegislative OfficeLeisure, Travel & TourismLibrariesLogistics and Supply ChainLuxury Goods & JewelryMachineryManagement ConsultingMaritimeMarketing and AdvertisingMarket ResearchMechanical or Industrial EngineeringMedia ProductionMedical DevicesMedical PracticeMental Health CareMilitaryMining & MetalsMotion Pictures and FilmMuseums and InstitutionsMusicNanotechnologyNewspapersNonprofit Organization ManagementOil & EnergyOnline MediaOutsourcing/OffshoringPackage/Freight DeliveryPackaging and ContainersPaper & Forest ProductsPerforming ArtsPharmaceuticalsPhilanthropyPhotographyPlasticsPolitical OrganizationPrimary/Secondary EducationPrintingProfessional Training & CoachingProgram DevelopmentPublic PolicyPublic Relations and CommunicationsPublic SafetyPublishingRailroad ManufactureRanchingReal EstateRecreational Facilities and ServicesReligious InstitutionsRenewables & EnvironmentResearchRestaurantsRetailSecurity and InvestigationsSemiconductorsShipbuildingSporting GoodsSportsStaffing and RecruitingSupermarketsTelecommunicationsTextilesThink TanksTobaccoTranslation and LocalizationTransportation/Trucking/RailroadUtilitiesVenture Capital & Private EquityVeterinaryWarehousingWholesaleWine and SpiritsWirelessWriting and EditingPolitics SelectMoreFeaturedBusiness Insider SelectTechnologySAI SelectMobile InsightsScience SelectAdvertising SelectAdvertising: The BriefSocial Media InsightsFinanceFinancial Advisor InsightsClusterstock SelectMoney Game SelectYour Money SelectSmart InvestorMonday Scouting ReportLifestyleThe Wire SelectThe Life SelectSports Page SelectGetting There SelectManagementRetail SelectBreaking NewsWar Room SelectEnterprise SelectCareers SelectInstant MBAMarketing MondaysPolitics and MilitaryPolitics SelectMilitary SelectLaw & Order SelectTop 10 Things & ListsLists Select10 Things In Tech You Need To Know10 Things Before the Opening BellClosing BellCharts of the DaySAI Chart Of The DayMoney Game Chart Of The DaySports Page Chart Of The DayAdvertisementYour Money NASDAQ Composite 3,468 +44.52 (+1.3%) S&P 500 1,645 +18.15 (+1.116%) NYSE Composite 9,373 +109.28 (+1.18%) LinkedIn Login Hot: LinkedIn In your network

The Social Media Advertising Ecosystem Explained