U.S. credit squeeze freezes Canada

TORONTO, Oct. 5 (UPI) -- Canadian homeowners and business owners are finding that the economic woes of the United States are spilling across the border.

Real estate prices have dropped in much of the country, the Toronto Globe and Mail reported. In Toronto, houses were selling for an average of 6 percent less in September than they had been a year earlier.

The Canadian credit market is tied to that in the United States. The bailout approved by the U.S. Congress on Friday will help Canada if it succeeds, economists said.

"Canadian banks are borrowing and lending in the same credit markets as U.S. banks, so if the credit markets seize up in the (United States), they're going to seize up in Canada, too," Christopher Ragan, a McGill University economist, said.

The Bank of Canada announced Friday it would more than double the amount it has available to lend in an effort to unfreeze the credit markets.