DANGER SIGNALS.

This article focuses on Canada and the budget proposed by Finance Minister Ralph Goodale. Last week, after Goodale tabled this year's fiscal blueprint, it was tough to find anyone peddling a convincing rant among the lobbyists and special interest groups camped out in the annual budget-reaction bazaar. Amid the sunny spending promises and surplus projections, Goodale slipped in a bit of anxiety: America is not what it once was. How much do the American elephant's ailing economic fundamentals threaten the fiscally healthier Canadian mouse? "The American situation," Goodale warned in his otherwise celebratory speech, "could lead to higher interest rates, slower U.S. growth and a further depreciation in the American dollar -- any of which could negatively affect us here in Canada." While Goodale acknowledged the dangers posed by the precarious U.S. situation, his working assumption is that this year and next will be good times. Other key budget measures can also be viewed through the lens of the Canada-U.S. relationship, economic and otherwise.