Fiscal trouble not on mind of Harper, warrior prince

Stephen Harper used to trumpet his government’s handling of the economy.

In those days, the prime minister portrayed himself as Professor Harper, the bespectacled, cardiganwearing economist under whose wise leadership Canada avoided the worst of the global recession.

Today, the professor has been replaced by Stephen Harper, Warrior Prince.

The spectacles are gone. The gaze is steely, the rhetoric muscular.

On Monday, Harper used a meeting with German Chancellor Angela Merkel to denounce Russian intervention in Ukraine’s civil war.

“No matter how long it takes, notwithstanding what methods are used, Canada will never accept the illegal occupation of Ukrainian territory by Russia,” he told reporters.

That came just a few days after the prime minister vowed to defend Canada by whatever means necessary in what he said was a war with the forces of international jihad.

The stirring rhetoric is not always matched by deeds.

In Iraq, 69 special forces advisers constitute the sum of Canada’s contribution to the ground war against Islamic State militants — a war once described by Foreign Affairs Minister Rob Nicholson as a battle for the future of civilization itself.

On Monday, Harper talked tough about Ukraine but dodged questions as to whether he would offer that country’s central government lethal military aid.

But the political point is hammered home: Canada faces dangerous enemies in a dangerous world. That is what matters.

As far as this government is concerned, the economy is yesterday’s story — important perhaps, but no longer central.

Oddly enough, this refocusing comes at a time when the economy is slipping.

Globally, the pace of growth has slumped. Japan’s economy is stagnating, as is that of Europe. China’s is slowing down.

Among major nations, only the U.S. is doing well. But as U.S. treasury secretary Jack Lew says, America alone can’t pull the world back into prosperity.

Going into a meeting of G-20 finance ministers this week in Istanbul, International Monetary Fund director Christine Lagarde called for concerted international action to stimulate growth, particularly on the part of advanced nations.

In a note to the summit, the IMF asked countries with strong fiscal positions (like Canada) to delay balancing their budgets in order to spend more on infrastructure.

In Europe, a political backlash against austerity is playing havoc with the elite consensus that for decades has ruled the continent.

The election of a serious left-wing government in Greece has once again put the euro, a common currency of 19 European nations, at risk. In France, the far-right National Front continues to make political gains.

Here in Canada, the collapse of oil prices has savaged the petroleum producing provinces. Alberta’s economy is taking a beating. Newfoundland is expected to go into recession.

In normal times, low oil prices (and a consequent fall in the loonie) would be countered by increased manufacturing activity in Ontario. And to a certain extent, that is happening.

But as Bank of Canada governor Stephen Poloz has pointed out, such a counterbalancing takes time.

Much of Ontario’s manufacturing capacity has literally disappeared over the past six years, thanks in part to a petroleum boom that kept the Canadian dollar unduly high.

If Ontario’s Liberal government goes through with its plans to cut public spending, any rebound will be delayed even further.

In short, the economy is again going through troubled times.

Globally, the post-2008 recovery was sabotaged in large part by Europe’s insistence on fiscal austerity.

In this country, a boom in commodity and oil prices lulled government into the belief that fiscal virtue alone had somehow allowed Canada to escape the worst.

Now with oil prices down and the manufacturing sector suffering from years of neglect, the proverbial chickens are coming home to roost.

If he were still around, Professor Harper might be dismayed. The Warrior Prince, however, has weightier matters on his mind. Thomas Walkom’s column appears Wednesday, Thursday and Saturday.