Leaders return to the economy as top election issue

Canada’s federal party leaders took to the campaign trail Tuesday to convince the public that only they should be trusted with the nation’s finances.

Thestar.com
Aug. 25, 2015
By Ben Spurr

With storm clouds gathering above global economic markets, Canada’s federal party leaders took to the campaign trail Tuesday to convince the public that only they should be trusted with the nation’s finances.

The steep decline of China’s stock market over the past week has sent tremors through economies around the world, and sparked concern that slowing growth in Asia will reduce demand for Canada’s resource exports, some of which had already been hit by falling prices over the past year.

At a campaign event in Quebec City where he announced plans to invest in maritime infrastructure, Conservative Leader Stephen Harper said the safest course of action in this troubled climate is to re-elect him.

“You do not - as any financial planner will tell you, whether it’s from the prime minister on down - you do not run around and change your plans based on daily market news. You have a long-term plan and you stick to it,” he said.

Harper appeared to welcome the shift in focus back to the economy following the damaging revelations in ongoing criminal trial of Sen. Mike Duffy, which have dogged the leader on the campaign so far.

Polls released Aug. 13 by Forum Research and EKOS Research found that a roughly equal number of voters view Harper and NDP Leader Thomas Mulcair as best-equipped to handle economic affairs.

Mulcair attempted to shore up his fiscal reputation on Tuesday by announcing that he wouldn’t need to drive the nation into debt in order to finance his campaign promises, which include child care plan that would eventually cost $5 billion a year.

At a press conference in Hamilton, he pledged to not run a deficit in his first year in office. “We’re of course going to finish the fiscal year on Mr. Harper’s watch - 2015-16 is his budget - but our first budget will be a balanced budget,” he said.

Meanwhile, Liberal Leader Justin Trudeau, who has been the target of Conservative attacks that portray him as inexperienced, played up his party’s economic record at an event in Toronto.

In a move that suggests the Liberals are eager to assure the public he would have help managing the economy, the party released a photo of Trudeau surrounded by members of his economic team, including former federal and provincial economic ministers.

Among them was former prime minister Paul Martin, who as federal finance minister earned a reputation for slaying deficits. Declaring that the Liberals have “a team that is proven, experienced, and ready,” Martin charged that Harper’s government hasn’t acted strongly enough to safeguard the economy.

“The central government’s role is not to be an idle observer of the passing scene, but to do something about it when there are problems,” Martin said.

Trudeau did stake out some ground of his own on Tuesday by breaking with the other leaders and refusing rule out running a deficit.

“We are focused on growing the economy and getting back into balance,” he said, “but like I say, how long that will take will depend very much on Mr. Harper and the mess he’s left us behind, along with the global situation.”

The Conservatives boast that they’ve eliminated the deficit, and predicted a $1.4-billion surplus in the 2015 budget. However, the parliamentary budget office is projecting a modest $1-billion shortfall in 2015-16.

While the party leaders scrambled to burnish their financial credentials, some experts cautioned that whoever is elected Oct. 19 will have few options to shield the country from the current economic turbulence, at least in the short term.

“Because we’re such an export-oriented economy ... our policy options in a period of international turmoil like we’re currently experiencing are always more limited,” said David Wolfe, co-director of the Innovation Policy Lab at the Munk School of Global Affairs. “We go through boom and bust cycles as international demand for commodities rises and falls.”

Wolfe said one long-term solution is for Canada to diversify its economy by growing its manufacturing sector, which he says has been in decline for over a decade even as European countries invested heavily in modern manufacturing techniques.

By the numbers

With files from The Canadian Press

Unemployment rate:

July 2015 – 6.8%

February 2006 – 6.4%

Participation rate:

July 2015 - 65.7%

February 2006 - 66.9%

Employment rate:

July 2015 - 61.3%

February 2006 - 62.6%

Federal surplus/deficit:

Fiscal year ending March 31, 2015 (government projection): $2-billion deficit

Fiscal year ending March 31, 2006: $13.2-billion surplus

Source: Statistics Canada, Department of Finance, Budget 2015