The situation is loaded with all the irony of classic Canadian comedy: at a time when any clear-thinking Canadian is – for perhaps the first time ever – envying the United States for its political leadership, it seems that Canada is finally being envied for its economic strength. Not only has President Obama praised the robustness of Canada's banks, but recession-hit Ireland is considering restructuring its financial regulatory bodies to look "similar to the Canadian model". Unlike the United States and Great Britain, Canada's government hasn't had to bail out any of its banks, and its banks are ranked top in the world by the World Economic Forum for soundness. And although Conservative Prime Minister Stephen Harper has overstated the claim that sub-prime mortgages aren't a problem in Canada, the reported 7% market share of sub-prime lenders in Canada is nowhere near their 22% market share in the United States.

None of this happy news is lost on Canadians. Gary Rabbior, president of the Canadian Foundation for Economic Education, told CTV's Tom Clark that "compared with how many are doing, we're probably the envy of many right now. And if we can hold our act together and continue to do as we've done in the past, we should be the envy of the world coming out of it." The Globe and Mail waxed lyrical about Canada's "balanced cultural approach to savings and risk", both amongst lenders and consumers, and, after the early 1990s recession lingered far longer in Canada than America, a cultural debt-aversion that differentiates Canadians from Brits and Americans. Optimists also point to the fact that Canada's office of the superintendent of financial institutions has been far more regulatory than the United States, and that, unlike America, the country's main banks chose not to sell most of their mortgages, giving them an incentive to ensure they were good loans.

Harper, hanging on by the skin of his teeth and recently proroguing Parliament against a challenge by a centre-left coalition, has used upbeat analysis of the Canadian economy to paint his challengers as pessimists, although Liberal leader Michael Ignatieff has countered that "it's not good enough to go to Canadians and sing them happy songs", and that Canadians "want their prime minister to tell them the truth, and I think he's being economical with the truth".

Indeed, the robustness of financial institutions is far from the whole story, and unfortunately for the proponents of "Canada envy", there's really no such thing as Canada doing better than America. A delayed reaction, or a less severe impact, is the most Canadians can hope for. It is hard to visualise the current suffering of many ordinary Canadians in Harper's optimism, but Canada's unemployment rate now stands at 7.7%, with the manufacturing centre in Ontario suffering over half of the country's joblessness since October 2008. Alberta's oil sands, often seen as central to the country's future prosperity, have seen all major companies delaying or shelving their expansion plans. When life for the average Canadian is hardly getting easier, the smug talk of envy by Ottawa politicians hardly seems appropriate given the reality of their situation.

Analysts have pointed out that using alternative measurements produces a very different picture of Canada's current economic situation. An independent institution, the office of the parliamentary budget officer, has found that using yardsticks such as year-over-year comparisons of real GDP (in this case, the fourth quarter of 2008 compared to the fourth quarter of 2007) shows Canada's real GDP was down 0.7%, not significantly different from the United States' 0.8%. When they looked at nominal GDP, which includes the effects of inflation, Canada's nominal GDP declined 13.4% between the third and fourth quarters of 2008, whereas the American nominal GDP shrank 5.8%. In the face of these facts, it's unsurprising that Bank of Canada's governor has just ditched the earlier prediction of a "made-in-Canada" economic rebound by 2010.

And really, all the talk of a stand-alone Canadian rebound seems to contain a glaring omission: the North American Free Trade Agreement, and Canadian economic dependence on the United States. Obama wasn't wrong about the soundness of Canada's banks, nor was Harper wrong that regulation and risk-aversion have put Canada in a better position than many nations. It's just that those good practices aren't enough to inure Canada against an economic crisis, given its overwhelming reliance on trade with America. According to the Economist, around 80% of Canada's exports go to the United States, yet US imports from Canada have fallen 36% since July 2008. Although modifications were made to Obama's proposed "Buy American" restrictions after the Canadian trade minister warned that they could take legal action against America under the terms of Nafta, the state of America's economy alone means Canada will suffer enough, even without further restrictions.

Rather than the optimism of "Canada envy", the worrying message of Canada's current economic crisis is that even countries that mostly did everything right will still have to suffer along with everyone else, so dependent as they are on America. With Nafta securing the "strongest" trade relationship anywhere in the world, Canada and the United States may still variously envy each others' politics and economies – but one partner clearly still has the upper hand. Britain and America could certainly have done with a drop of Canada's appreciation for regulation, but the recklessness of Wall Street and London's financial giants has ended up damaging a country that had it own financial house in order.