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Canada's Super-Sized Economy

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Tim Hortons is supersizing their coffee. And that's all you need to know about the Canadian economy.

As was widely reported last week, in two cities, Tim Hortons is upsizing their cups, leaving people with more coffee and bigger prices. A medium is the new small. And there will be a larger large, with 24 ounces of coffee. (Just in case this has been all too confusing, Tim Hortons has produced a helpful poster for customers, which you can find reproduced here.) It's a test run, but clearly the chain is eyeing a roll out across the country.

It summarizes well our economic situation. While America deals with another bad jobs report and the increasing likelihood of a double-dip recession, as Europeans fret Greek banks, we face the potential of... bigger coffee cups. It speaks of prosperity at a time of unease -- a major coffee chain attempting to increase sales when the chains in other countries are laying off workers.

These are good times in Canada. Our banks are sounds; the dollar trades over parity; the housing market remains robust; and the stock market, while bruised, has not dropped like other markets.

The contrast with the United States is particularly pronounced. In recessions past, Canadians bled, while Americans emerged relatively unscathed. Think of the recessions of the early '80s and the early '90s. Today, it's the opposite. The United States is enduring an economic lull, the worst since the Depression; we seem to have bounced back, and boast the highest growth rates in the G7 for the first quarter of this year.

That's not quite to suggest that life here is perfect -- the last quarter was a dud in terms of economic growth. (Find a nice summary of the economy here.)

And there are, of course, storm clouds on the horizon. Our manufacturing is hot because of exports to the United States -- how long will Americans buy Canadian made cars if their economic woes continue? Commodities trade high -- how much longer before Asia catches the American flu?

But, for now, this is Canada's extra large coffee moment.

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