The myth of our roaring economy
Anyone who believes the Conservative government’s rosy rhetoric about the economy should be unsettled by a recent Ekos poll, which found that 64% of Canadians now believe hard work is no longer paying off, and that 57% think the next generation will have a worse quality of life than we do. These disturbing trends reflect Canada’s weak underlying economic performance.
The International Monetary Fund forecasts that 129 other countries will grow faster than us this year, including the United States, Sweden and Australia. More still will do better than us next year. The meagre 15,000 new fulltime jobs that were created in the past 12 months is simply not enough — 230,000 more Canadians are unemployed today, than before the recession. Fifteen of our peers in the Organisation for Economic Co-operation and Development will outperform our economy this year.
It’s increasingly obvious that Conservative boasts about Canada’s relative economic performance are further and further out-of-date. Even Prime Minister Stephen Harper acknowledged that Canada’s job market has “flattened recently.” And there’s little question of why this is so: On jobs, infrastructure and trade, the Conservatives continue to get the big economic questions wrong.
Their latest failure, the Small Business Job Credit, is not linked to job creation. It encourages firms to stay small, puts a cap on growth and — for some businesses — could even be an incentive to fire people. It’s been panned by experts across Canada, from economists, such as the University of Calgary’s Jack Mintz, to the Canadian Council of Chief Executives.
A better way to use the same funds would be to provide an Employment Insurance premium exemption to every business that creates an incremental new job, as Liberal leader Justin Trudeau has suggested. That would reward every company, regardless of size, that grows its payroll. The Canadian Federation of Independent Business, the Canadian Restaurants Association and the Canadian Manufacturers and Exporters Association all support this approach.
On infrastructure, the Conservative government boasts about creating the “largest ever” plan in the country’s history. But their flagship New Building Canada Fund was cut this year by 87%, and over 70% of the money allocated to it won’t begin to flow until after 2019. Infrastructure is the best way to create jobs today and lay the foundations for greater growth tomorrow. Those investments are needed now.
On trade, the government boasts of “reaching” deals with 38 countries, yet only six new agreements are actually in place, providing
Harper has the worst economic growth record of any prime minister since R.B. Bennett
Canadian businesses with access to markets that account for less than 2% of world GDP — hardly enough to make a major difference. Liberals support well-negotiated trade agreements, but don’t confuse “doing deals” with actually getting goods and services flowing across borders. Canada is the only G7 country to have actually exported a smaller volume of goods last year than in 2005. The latest figures show Canada’s trade balance is again in deficit.
Despite their claims of being focused on the economy and jobs, the Conservatives keep making the wrong calls on critical economic policies. No wonder Stephen Harper has the worst economic growth record of any prime minister since R.B. Bennett.