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Again, this might not send shudders up the average Canadian’s spine, but maybe it should. Canada, too, is heavily exposed to global trade. While China accounts for a small part of our overall exports and imports, it is our second-largest trading partner among countries — and its importance in setting global commodity prices cannot be underestimated. Then there’s Trump’s threat to impose tariffs on Mexico over asylum-seekers, which imperils the new NAFTA deal — not to mention the complex trade flows and supply chains among Canada, the U.S. and Mexico.

Photo by Bloomberg file photo

Another driver of Australia’s downturn, meanwhile, will seem eerily familiar to Canadians: its housing market has run out of steam. After growing steadily for years, housing prices in some major urban centres peaked in 2017, and have been falling steadily since. In Sydney and Melbourne, prices have declined by double digits over the past year. That might not be much of a crash, but the boom that preceded the bust was fuelled by a surge in credit, and Australian households are highly leveraged. Household debt to disposable income sits somewhere just south of 200 per cent.

That might give Canadians, whose debt-to-income ratio sits at a mere 179 per cent, some solace. But it shouldn’t give much. Like Canada, Australia has been enjoying relatively strong employment gains, but that strength hasn’t been realized in sustainably strong wage growth, nor has inflation come in anywhere near the central bank’s target of two to three per cent. As housing prices have fallen, Australians’ wealth has declined — household wealth fell by more than two per cent in the fourth quarter last year. Not surprisingly, consumer spending growth has slowed considerably, which in turn puts a cap on housing demand. And so the circle goes.