Harper Conservatives fail to see recessions coming

July 20, 2015

The Harper Conservatives are now running a television ad about the 2008 financial crisis and resulting recession, claiming: “Nobody saw that one coming.” But today, Canada is the only G7 country in a recession, and once again, they didn’t see it coming. The parallels between our economy then and now – and this government’s response – are striking.

First, let’s think back to the fall of 2008.

In late November, the Conservatives tabled their now infamous Fiscal Update. It not only showed that they believed no recession would happen – despite the fact that Canada was, by all indicators, already two months into one – but that only balanced budgets were ahead.

A few short months later, Stephen Harper conceded the recession that he didn’t see coming. His government was now running a $56 billion deficit – the largest in Canadian history.

How could someone who trained as an economist, although admittedly never worked as one, get it so wrong? Mr. Harper has famously claimed that he doesn’t read newspapers. That might explain how he missed the myriad of headlines like these:

  • Recession in Canada likely, forecaster says (The Vancouver Sun, 24 September 2008)
  • Recession for Canada in 2009: UBS (Financial Post, 6 October 2008)
  • Bank of Canada warns of recession, cuts policy rate (Telegraph-Journal, 22 October 2008)
  • Canada teeters on brink of recession (Globe and Mail, 24 October 2008)

Fast forward to May 2015: the Governor of the Bank of Canada called economic growth in the first three months of this year “atrocious,” and later likened his January interest rate cut to “life-saving surgery” for Canada.

Did Mr. Harper or his Conservatives notice our faltering economy this time? They did not. Instead they continued to insist that there is no recession, and that the budget will be balanced. The Conservative Finance Minister has echoed this position, telling Bloomberg news: “we’re not in a recession.”

Yet the Bank of Canada’s July 2015 Monetary Policy Report shows very clearly that Canada has almost certainly been in a recession since the start of this year. It confirms what many recent headlines have been telling us:

  • Canada flirting with another recession (Trail Times, 9 June 2015)
  • Recession concerns from as GDP falls for fourth consecutive month (Telegraph-Journal, 1 July 2015)
  • Canada is in recession (Ottawa Citizen, 8 July 2015)
  • Country Teeters on brink of new recession (The Windsor Star, 11 July 2015)

There’s an old saying that economists have successfully predicted nine out of the last five recessions. Yes, people can sometimes get it wrong, but the Harper Conservatives seem to get it wrong more often than most.

To pretend that “no one saw it coming” when nearly everyone else did is either deliberately deceptive or delusional. Whether it is incompetence or dishonesty that has kept Mr. Harper from seeing either recession, Canadians deserve better.

After a decade under Harper, it is time for new leadership and a new plan. Justin Trudeau has a plan to create jobs, economic growth, and strengthen the middle class. That’s real change.

Hon. Scott Brison, P.C., M.P.

MP for Kings—Hants