Canto 4: The Economy

ELECTION FEATURE by Paul Dechene

“The anguish of the people who are below here in my face depicts that pity which for terror thou hast taken.” ―Dante Alighieri, Inferno

The greatest trick Stephen Harper ever pulled was convincing Canada that the economy is the only election issue that exists.

Every mainstream media talking head has bought the line and even the leaders of the two main opposition parties seem to agree that every discussion and debate has to circle around to the economy. Larger values like compassion, fairness, justice, even ethics, have taken a back seat to talking points about tax cuts, balanced budgets and freer trade.

Harper has taken the nation’s anxiety over collapsing oil prices and Europe and Asia’s financial messes and is playing them like a piano. He’s ended his six-year streak of deficits with a small surplus budget for 2014/15 and another small surplus projected for 2015/16. Now he just has to point to those numbers and say, “These are uncertain times. Stay the course.”

And it’s ironic because it wasn’t that long ago that there was a large crowd of pundits predicting the Conservatives would have a difficult time running on the economy because Harper’s economic record isn’t very good.

In July, Unifor released a report showing how Harper’s economic record is the worst of all nine, post-World War II Canadian governments. Per capita GDP has barely grown on Harper’s watch while income inequality and household debt have shot up. On imports and exports, Harper let a $55 billion trade surplus dwindle to a $35 billion trade deficit.

All this happened while the unemployment rate sat at an uncomfortably high 7.1% — And that’s a number that’s hit young people the hardest. Since Harper took office, employment for people aged 15 to 24 has dropped three per cent. Conversely, workers aged 55-plus — the one age group that consistently votes Conservative — has seen their employment rate increase three per cent.

And while Harper likes to claim he has the best job creation record in the G7 — 1.3 million new jobs since the 2008 recession and 1.3 million more if he gets re-elected — he fails to mention that those gains aren’t keeping pace with population growth. We’ve actually seen a drop in the employment rate of 0.1% since 2008, while countries like Germany, the UK and Japan have seen their employment rates increase.

But Harper would very much like it if we only focused on the good numbers, gave him credit for his modest job creation record and his one small verified surplus versus the six others that were in the red. The bad numbers, aren’t his fault, he argues. They’re the result of titanic, globe-spanning financial crises like the 2008 recession, tanking oil prices and the collapse of the Chinese market.

All true. He’s faced a tumultuous time in office. But then, so does every Prime Minister. That’s why the history books are so thick. Every year there’s some new horrible crap to write about.

There have been six recessions since 1960, some longer and deeper than the one Harper’s faced. And every other Prime Minister has restored employment and GDP growth faster than Harper has. Sure, our recession was followed by a collapse in commodity prices and that has hindered any hope of a speedy recovery, but that only highlights how shortsighted it was for Harper to focus so much attention on propping up the oil sector in his bid to remodel Canada as an energy superpower.

In fact, the good governance that softened the impacts of the 2008/09 recession can’t be attributed to Harper’s management. Opposition parties forced him to spend federal cash to stimulate the economy while the Conservatives led a precarious minority government; since achieving a majority, Harper has been following the same austerity path that’s led to so much unrest in Europe. Then, softening the recession further were our stricter banking and mortgage laws, a series of large budget surpluses in the early part of the century and a healthy debt-to-GDP ratio, all of which were the legacy of previous Liberal governments.

Harper’s greatest achievements seem to be tax breaks for corporations and wealthy Canadians, and a laundry list of boutique tax credits and handouts targeted to curry favour with the middle class.

The grand result of his austerity plan is shifting the responsibility for keeping the economy moving down the pecking order. While the federal government will be able to boast about their healthy books, provinces are expected to pick up the healthcare tab for Canada’s aging population and take on debt to compensate for insufficient transfer payments. The national infrastructure deficit is now over $350 billion and growing and that bill is largely being paid for by municipalities through property taxes, borrowed money and whatever else they can beg from strapped provincial coffers.

And with public services disappearing and housing prices skyrocketing, those costs have to be covered by household borrowing.

Turns out the trickle-down economics that Harper is so fond of doesn’t exactly work as promised. As taxes and government shrink, wealth doesn’t work its way down the system to the less and less fortunate. Debt does. Harper has effectively downloaded all the taxing and deficit spending he doesn’t want to do onto lower orders of government and individual households.

But none of that matters. Harper is coasting on a decades-long project of the global conservative movement to associate themselves with fiscal prudence. It’s a notion that Harper’s bolstered here at home by spending $750 million of public money on advertising and message control to spin the idea that his government is best equipped to manage the nation’s economy. Doesn’t matter that his record says something different. In the public imagination, the word conservative means “wizard of the economy” in the same way that Googling equals “finding the information you want” and Kleenex equals “nose rag.” It’s a perception that won’t easily be shaken off by complex things like “reality.”

And that means, every time Mulcair talks about his balanced budget plan, every time Trudeau talks about infrastructure spending, and every time a political commentator says, “I think we can all agree this election is about the economy,” Harper smiles. His great trick has succeeded and everyone has been fooled.

Canto 5: Democracy

2015-10-01