HONOLULU — My American friend Paul recently returned from the Olympics in Vancouver gushing about Canada, raving that the Games showed our country deserved its reputation as a decent, fair-minded place with handsome Mounties and a functioning health-care system. He actually rooted for Canada over the United States in the gold-medal hockey game. And, he said, not only did Canada own the podium, it has “a great financial system.”

I, as a cautious Canadian, told Paul not to go over the top, that the Olympic glow could fade as quickly as a snowboard run.

But yes, Canada is hot. Witness our soaring loonie. Witness our soaring stock market. Witness our Finance Minister, Jim Flaherty, lecturing the world on the need for fiscal probity.

Here in Waikiki, having a loonie at pretty well par and, I think, going well over par, is an extra blessing. It is “ono,” which is Hawaiian for good.

Jim Flaherty, bless his supposedly tightwad soul, has no idea that life for us here in paradise is made more ono by a stronger loonie. He is looking for ways to rein in our buck. But a strong currency reflects a strong economy and a stronger fiscal reality. Relatively speaking.

Yes. The world, the last time I checked in, is so screwed up that the man who gave us a $56-billion federal deficit this fiscal year is able to stride the Earth and tell other finance ministers that they must follow Canada’s prudent example.

Flaherty, to his credit, did refer, in speeches in New York and London, to Canada’s “relative” financial position. Indeed, our annual budget deficit is “only” 3.5% of gross domestic product, versus 9.9% for the United States, 12.9% for Britain and god-knows-what for Greece.

So, in comparison we are doing, well, OK. We are more OK than the United States, the large country to our south that we constantly strive to emulate, to reach up on tiptoes to its tall, manly, ruggedly individual shoulders.

Further evidence emerged this week that Canadians are reaching parity with Americans in the wealth of nations sweepstakes. Our household net worth reached $5.9-trillion in the third quarter of 2009, still slightly below the peak in 2008. By comparison, U.S. households had a net worth of US$54.2-trillion in the same period, down 21% since the 2007 peak.

Going by population and the loonie’s virtual parity with the greenback, Canada’s 33 million people are worth about $178,000 apiece, versus the average US$177,000 net worth of Americans. This may be an unprecedented measure of our national wealth and it is one aspect of our country’s status gaining international recognition. We are a small country with a larger reputation than our population might normally merit. And our dollar might soon begin to fully reflect that status by going well over parity with its U.S. counterpart.

In fact, we are doing so well that the finance minister says he intends to halve the budget deficit in two years and return to a balanced budget in four or five years. Britain and the United States have no such aspirations. The total U.S. federal debt will likely reach US$20-trillion by 2020, by which time America will be well on its way to a diminished economic and social status. (People such as Warren Buffett, whom I admire, keep saying the United States will bounce back, because it always has. Saying it will happen will not make it so.)

Britain’s Chancellor of the Exchequer, Alistair Darling, bristles at the suggestion that it should get its fiscal house in order sooner rather than later. That could derail the tenuous economic recovery, he says. No need to begin confronting reality now when the country can confront an even uglier reality later. Britain, he says, will get its budget deficit down to only 4.6% of GDP by 2014-15. Yikes!

So, yes. Canada can walk relatively tall in a world of the fiscally height-challenged.

But instead of simply walking tall and talking a big shtick, Flaherty and Co. must not allow this crisis to go to waste. This is an opportunity to do a serious audit of how we spend our country’s resources.

The United States appears to have no political will or the vital ability of compromise to tackle its mounting fiscal woes. Canada can learn from U.S. shortcomings and come up with a long-term plan to trim spending, setting a new standard for how we govern ourselves.

If we can learn from this, us Canadians can perhaps have a better happy hour of life itself, especially those of us contemplating heading out for a couple of beverages here in Waikiki at the end of an endless winter.

Financial Post

whanley@nationalpost.com