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Canada’s showing symptoms of Dutch Disease A new report by the Organization for Economic Co-operation and Development says resource development — primarily in Western Canada — is causing an economic imbalance in the country. Read more

OTTAWA • Canadian households be warned: Your finances could soon be hit with a big shock.

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Any spillover from an unbridled European financial crisis could carry over to this side of the ocean, first rocking the U.S banking sector and then ours.

In that scenario, already debt-burdened households could begin defaulting on their mortgages, banks would start tightening their lending, jobs would be lost and the hot housing market would go into the deep freeze, as fewer people are able to buy in.

That could be the cumulative effect of shock scenarios highlighted by the Bank of Canada on Thursday in its bi-annual Financial System Review, in which the word “shock” is used liberally.