The financial crisis in the United States is spilling over into the North, as Canada’s currency is facing its third week of a decline, bringing down gains for their exchange traded funds (ETFs).

The threat of a U.S. economic slowdown has has reduced commodity prices and weakened the Canadian currency 0.8% this week alone, reports Chris Fournier for Bloomberg. The United States is Canada’s largest trading partner; Oil accounted for 10% of Canada’s export revenue in 2007.

Canada can expect many changes as the official opposition Liberals are looking at a major makeover after 24 years, and their worst election performance yet.

The party, saddled with an unpopular leader and an unpopular policy platform, ran a poor campaign. Initial results showed the Liberals won just 77 of the 308 seats in Parliament on Tuesday, down from the 95 when the vote was called, reports Patricia Zengerle for Reuters.

The Liberals used to receive most of their funding through rich individuals and big donations from businesses. New financing laws limit the amount any one person can give, putting the emphasis on developing a large network of small donors. The Conservatives already have such a base but the Liberals have struggled to repeat their success.

• iShares MSCI Canada Index (EWC), down 40.7% year-to-date
• CurrencyShares Canadian Dollar Trust (FXC), down 16.8% year-to-date

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

Tags: Canada, Canadian Dollar, Commodity ETFs, Currency ETFs, EWC, FXC