http://www.canada.com/vancouversun/news/business/story.html?id=32ee0fc9-50e9-49ef-883b-1fdffd36ff63&p=1
Everywhere we go we hear about the United States' economic crisis and how it affects Canadians. As Canada gets nearer and nearer to falling into a recession, this has a huge effect on our economy. In fact, it seems to be that we are already in a recession. The number of jobs that presently exists will decrease because money will be even harder to come by, especially jobs that relate to the export of products from Canada. Since this crisis is a global issue, many European countries as suffering as well. Luckily, experts expect this recession to end by early 2009, but this can have devasting effects on the global scale.
Connection
As debt builds up, not only do individuals involved in the stock market crash suffer, but so do individuals like us and businessmen as well. Prices will gradually but consistently increase and customers will have to pay more for the same items and business owners would have to increase the salary they pay to their workers for the price of living will have skyrocketed. Owners of trade companies will endure one of the worst sufferings since Canada has strong trade routes going to the U.S. and no longer will they be able to purchase our items. As it is expensive to store products for a long period of time, the value of the items will not be worth its original price and therefore cost the proprietor. In some cases, proprietors would lose even more money because when business is not up to where it should be, money is spent on advertising expenses to sell the product to gain more customers. In the end, revenue (particularly COGS) will not increase whereas expenses will, something any business or accountant should hope not to encounter.
Reflection
With such a global disaster surfacing, I cannot help but wonder why the Americans did not have a backup plan of any sort for a sufficient government should have limits on how much money is spent on certain aspects of a country. At the present moment, our Canadian government has ensured Canadians that we will not fall as deeply as our American neighbours but in some cases, we are even worse. On the other hand, without the U.S. using as much money to finance their operations, countries around the world could possibly benefit from this issue. Only time can tell what will become of this situation and whether companies will make it through this time of little revenue.
Betty Chan
