April 8, 2020

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Opinion

On the economy, Tories in denial

Prime Minister Stephen Harper (Mark Taylor / The Canadian Press files)

CP

Prime Minister Stephen Harper (Mark Taylor / The Canadian Press files)

Hey there, time traveller!
This article was published 1/8/2015 (1712 days ago), so information in it may no longer be current.

Chances are that if you read or watch a news story these days about the anemic Canadian economy, you're likely to see a certain accompanying image.

That photograph - from April 21, the day the 2015-16 federal budget was tabled -- shows Prime Minister Stephen Harper and Finance Minister Joe Oliver smiling broadly and giving the thumbs-up as they approached the House of Commons.

 

Why would this picture in particular accompany stories about a struggling economy? Right now, it's one of the best examples that Harper and Oliver are living in a profound state of denial about what's going on with the economy and the federal treasury.

Statistics Canada reported the economy shrank in May, the fifth consecutive month that there has been negative growth. Although there is some debate about whether this qualifies as a bona fide recession, almost everyone agrees it's not good news.

A struggling global economy continues to dampen appetites for Canadian commodities, which has caused the loonie to fall precipitously against the American dollar. Horrendously low oil prices have put further downward pressure on the loonie and trimmed billions of dollars from federal tax revenues.

Against this gloomy news, the Conservative government has refused to admit there is any reason for concern, even as the promised budget surplus for the current fiscal year will almost undoubtedly become a small deficit. In fact, the Tories have continued to roll out a series of expensive tax cuts and family benefits to galvanize their re-election campaign, even with the knowledge they will likely have to borrow money and increase debt to deliver on those tax measures.

So, when it comes time to report yet again on gloomy economic developments and the federal government's "we couldn't care less" posture, many news organizations can't resist slapping up a picture of Harper and Oliver smiling and giving a thumbs-up.

How can the Conservatives stay upbeat in the face of so much economic gloom?

Some within government, including the Bank of Canada, believe the economy will rebound before the end of the fiscal year. That could happen, but many more sources are urging the federal government to take a more cautious approach and prepare for lean times.

That is not how Harper and Oliver have played it, however.

Harper has said in interviews his government is "well ahead" of its budget projections, which called for a $1.4-billion surplus.

Oliver added he is "very comfortable" with the federal government's balance sheet, and repeated his assurance the budget will be in surplus by the end of the fiscal year.

However, other than these brief comments, neither Harper nor Oliver has allowed themselves to be grilled in depth about where they are finding this reservoir of optimism in an otherwise pessimistic economic climate.

Efforts by opposition MPs on the House of Commons finance committee to have Oliver explain his rosy outlook last week were thwarted by a Tory majority.

Neither the prime minister nor the finance minister has made themselves available to journalists for in-depth interviews.

Unable to plumb the depth of their optimism or identify the metrics that could justify continued assurances of a surplus, we are left to conclude the Conservative storyline is little more than a pre-election gimmick.

Canadians go to the polls Oct. 19, five full months before the end of the fiscal year. During that time, the economy will either rebound, proving the Tories right, or continue to falter, at which time it will be too late to do anything about the results from last fall's election.

However, there is still peril for the Conservatives in this approach. There are signs Canadians are already bristling at the sight of the Harper-Oliver thumbs-up. Moreover, voters may be ready to punish the Tories for trying to deceive them about the true state of the economy and treasury to win an election.

If that turns out to be the case, and the Tories are thwarted this fall by an electorate that has stopped buying unfounded optimism, it could rank as one of the biggest self-inflicted electoral wounds ever seen in Canadian political history.

Opinion polls have shown Canadians are not, on the whole, overly concerned about a small deficit. In fact, even in the depths of the last recession, when the economy struggled and the deficit soared, Canadians did not lose faith in the Tory government.

Canadians are, however, extremely skittish about a possible double-dip recession. If the Tories continue to fixate on a budget surplus, while denying the economy is in trouble, they run the risk of losing credibility with voters. Not because of the economic woes, but because the Tories are trying to convince voters nothing's wrong.

There are signs in pre-election polls Harper has already lost some credibility on economic issues.

A Nanos Research poll published last week in the Globe and Mail showed nearly half of Canadians think the NDP and its leader, Thomas Mulcair, are the best choice to manage the economy.

Less than one-third of respondents thought Harper was the best choice.

This is a shocking result given Conservative strategists have assumed Harper would always come out on top in any head-to-head comparisons with other leaders on economic issues. If suddenly Harper cannot play that card, it could deal a fatal blow to the Tory election strategy.

Voters expect political leaders to stand firm in the face of adversity, and to keep their heads when all those around them are losing theirs. Voters can even appreciate a modicum of optimism, if it's doled out at the right time and in the right measure.

However, there aren't enough smiles or thumbs-up signs in the world to save a government guilty in the court of public opinion of trying to deceive voters with false optimism.

dan.lett@freepress.mb.ca Twitter: @danlett

Dan Lett

Dan Lett
Columnist

Born and raised in and around Toronto, Dan Lett came to Winnipeg in 1986, less than a year out of journalism school with a lifelong dream to be a newspaper reporter.

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