These four facts add up to a not-so-stellar record
Where Canada stumbled under Stephen Harper’s economic stewardship
Even in one of the lengthiest, costliest federal election campaigns in Canadian history, it seems there isn’t time enough for party leaders — well, for Stephen Harper, at least — to brush up on what the other parties are saying.
For the record, Justin Trudeau, the federal Liberal leader, is pledging tax cuts. And Tom Mulcair, the NDP leader, has vowed to balance the books: something the Harper government has not done in each of the past seven years.
Benjamin Disraeli, the 19th-century British PM, famously spoke of “Lies, damned lies, and statistics.” Actually, the problem with facts is their selected and distorted use, not the stats themselves.
So let’s look at the highlights of Harper’s economic record, his self-selected chief selling point. And that was a pretty big boast, the Harper campaign’s chief spokesman telling CBC Radio on Tuesday that “Canada has outperformed its G7 peers on almost every metric you look at.” Job creation Canada has indeed bested its G7 peers in job creation since Harper first took office in 2006, when measured by the percentage increase in jobs.
Of course, job growth is to be expected in a country with a growing population. Japan’s population has been shrinking in recent years; and European population growth is also heading for negative territory. That’s the fate of all mature, affluent economies save those few, such as Canada and the U.S., with high rates of immigration. (German Chancellor Angela Merkel’s announcement Tuesday that Germany will take in about 500,000 Syrian refugees did not startle demographers.)
Mind you, the Canadian job-creation rate has slowed considerably since Canada slipped into recession in this year’s first half. It’s unfortunate Harp- er tied Canada’s growth prospects to a volatile commodity such as oil rather than addressing the causes of Ontario’s manufacturing decline, which was underway several years before Harper first became prime minister.
Canada’s unemployment rate, at 7.0 per cent, is worse than that of all but two of our G7 counterparts. (The U.S. rate is 5.1 per cent.) More worrisome, Canada ranks only fourth among the G7 countries in employment-rate growth; that is, the portion of Canadians 15 years old and older who are drawing a paycheque. Canada’s record here since 2006 is -0.1 per cent to Germany’s 2.1 per cent.
Canada’s notoriously low rate of productivity growth has continued under Harper: a miserable 5.4-per-cent increase over the past nine years, compared with the U.S.’s 12.4-per-cent gain during Harper’s time in office. Fiscal prudence As noted, Harper has presided over seven consecutive deficits. They have added a total of $182.3 billion to the national debt.
For credibility’s sake, Harper must balance this year’s budget, having made a hell-or-high-water pledge to do so many moons ago. That he’s doing so with a one-time windfall from the sale of shares in General Motors Co. (which Ottawa and Queen’s Park helped bail out) and by raiding the employment insurance fund is the sort of chicanery most governments sink to.
A distinction of Harper — and George W. Bush — is an upward spiral in government spending while starving the treasury. As Dickens said, more money going out than coming in means “Result: misery.”
Harper first gained office after vowing to slash the loathed GST.
Trouble is, that two-point GST cut is depriving the federal treasury of about $14 billion a year. Harper’s reduction of the corporate income tax, from 22.12 per cent to 15 per cent, is another $13.7 billion of revenue forfeited by Ottawa.
(We’re leaving out other costly Harper gimmicks, such as Tax Free Savings Accounts and incomesplitting.)
“Large and permanent deficits” are the inevitable spawn of this kind of economic malpractice.
By contrast, the Jean ChrétienPaul Martin years set in train 11 consecutive surpluses, a record unmatched on the planet. In total, they reinforced the treasury by a total of $94.9 billion. Economic growth Canada’s economic growth in the Harper years has indeed surpassed that of the other G7 countries. A reminder, though, that the competition is a Europe in debt-crisis mode for four years; a Japanese economy that has been stagnant for more than two decades; and a U.S. that was ground zero for the epic implosion of an unprecedented housing boom. Lately, GDP growth in a recovering American economy has overtaken that of Canada.
Harper may have outperformed G7 peers, economically distressed during much of Harper’s time in office, but not his own predecessors at 24 Sussex. Harper’s record of 1.6 per cent in average annual GDP growth falls short of Pierre Trudeau (3.6 per cent), Brian Mulroney (2.3 per cent), Chrétien (3.5 per cent) and Martin (2.9 per cent).
Ditto Harper’s job-creation record. At an average annual gain of 1.0 per cent, it has trailed the population growth rate. It falls short of Harper predecessors Trudeau (2.3 per cent), Mulroney (1.4 per cent), Chrétien (2.0) and Martin (1.5 per cent). Prosperity Harper economics have not trans- lated into prosperity.
Harper-era growth in standard of living — or average annual increase in real GDP per capita — is barely discernible at just 0.4 per cent. That’s worse than any PM since the Dirty ’30s. Harper aside, the range here is a low of 1.0 per cent (Mulroney) and a high of 3.6 per cent (Lester Pearson).
The gap between rich and poor has widened in the Harper years, in which the top 1 per cent of income earners have reaped 12.7 per cent of total national income. That’s the widest gap of any postwar PM other than Martin (12.9 per cent). During the long Trudeau era, it was just 8.4 per cent.
And for stock market investors, including pension funds that build nest eggs for retirees and future pensioners, the Harper years have been ones to forget. The S&P/TSX has gained just 18.6 per cent in the Harper era, a record bested by the Dow Jones industrial average (up 64 per cent), Britain’s FTSE 100 (up 28.6 per cent) and Germany’s DAX index (up 146 per cent).
Frankly, the best that can be said of Harper’s economic stewardship is that Canada got through the Great Recession more comfortably than many countries. Mind you, Harper was greatly assisted by the acumen of then-Bank of Canada governor Mark Carney; the prudence of a Big Five bank fraternity whose prodigious reserves did not require the massive state bailouts we saw elsewhere; and the remarkably sound national finances Harper inherited in 2006.
Economically speaking, Canada has simply muddled through these past nine years. When Harper claims otherwise, his pants are on fire. dolive@thestar.ca