Deirdre McMurdy

As 2010 gets rolling, it has become considerably more challenging to be gloomy about Canada's economic outlook.

If the economy isn't exactly bounding ahead, at least it seems to have stopped shrinking in the last couple of quarters. In November, 79,000 new jobs were created and full-time employment increased for the third consecutive month. There have been reports of improved activity among global manufacturers. And foreign investors are making eyes, once again, at Canadian assets.
And then there is the stock market - the ultimate reflection of collective confidence.

The Toronto stock exchange finished 2009 up 30.7 per cent — a 57 per cent improvement over its five-year low in early March. Granted, it was still 22 per cent lower than where it was in June 2008, when it hit an all-time high. But it wasn't a bad recovery in light of where things stood — and where they were expected to stand for the foreseeable future — at the start of 2009.

As well, the volume of trading hit a record high in 2009, indicating a degree of liquidity and investor focus that would have been tough to anticipate a year ago.

It was also a year ago when the federal government, having dropped the ball in the November 2007 economic statement, came forward with a new budget. Among the measures it included was the introduction of a new vehicle designed to encourage personal saving: the Tax Free Savings Account (TFSA).

To a measurable degree, the TFSA has been a success. It hasn't hurt that the ability to shelter $5,000 a year from taxation coincided with a more frugal, chastened attitude that has spurred Canadians to boost their savings to 4.8 per cent of disposable income in 2009, up from 3.7 per cent in 2008 and 3.8 per cent during the first years of the decade.

* Video: Finance tips for 2010

For the most part, however, Canadians have been exceedingly conservative with the way they've used the accounts: 94 per cent of the assets held in bank TFSAs are in the form of straight savings accounts or term deposits.

That cautious approach isn't especially surprising given how shell-shocked so many have been and the fact that the TFSA has been regarded as a place to build a small nest egg in turbulent times. However, interest rates are at historic lows, so that approach will not yield much growth on such reserves.