Canadians should not succumb to an atmosphere of "doom and gloom" because of the financial turmoil experienced in the United States over the weekend, Prime Minister Stephen Harper said on Monday.
He was reacting to turmoil surrounding the bankruptcy filing by investment bank Lehman Brothers Holdings Inc and the agreement by brokerage leader Merrill Lynch to be taken over by Bank of America.
"I don't think now the atmosphere should turn to one of complete doom and gloom," Harper told a news conference.
"The American economy, while it has slowed down considerably ... has not crashed and has not itself entered into recession either through all of this," he said. The United States is by far Canada's largest trading partner.
Harper said that if there were going to be a "big crash or recession" it would have happened by now, more than a year after the U.S. credit crisis started.
"The American economy itself, notwithstanding much deeper troubles than anything we see here, does demonstrate considerable resiliency from time to time, so I wouldn't throw in the towel on any of this quite yet," he said.
Canada had a credit crunch in August 2007 involving asset-backed commercial paper but no major institutions have failed, partly because the Canadian housing market did not become as overheated as that in the United States.