Country bracing for 'made in Canada' recession: former chief statistician
As Canada braces for the anticipated confirmation next week that it’s in a recession, a former chief statistician says the country has no one else to blame but itself.
Munir Sheikh told CTV’s Power Play on Thursday that the country is likely headed into a “made in Canada recession,” especially given recent news that the U.S. economy grew 3.7 per cent in the last quarter.
“Obviously we are doing something in this country, given that three quarters of our exports go to the U.S., which will make the economy pretty weak. So to some extent, our recession is a made in Canada recession.”
Statistics Canada will release its gross domestic product figures for June next Tuesday, which will show whether Canada had two consecutive quarters of negative economic growth and, thus, met the technical definition of a recession. Canada has seen five consecutive months of economic decline.
All the money talk comes as the federal leaders spar over how they would handle the country’s economy if elected.
Liberal Leader Justin Trudeau announced Thursday that, if elected, his government would run modest, short-term deficits until 2019 in order to boost the economy. Conservative Leader Stephen Harper slammed the Liberal plan, saying Trudeau’s small deficits would turn into large ones leading to high taxes and program cuts.
Reacting to Trudeau’s plan, Sheikh says it is a good time to run deficits, given the state of the Canadian economy.
“The choice for you (as a leader) is whether that money should be borrowed by governments to do useful things or should that money flow to households,” said Sheikh. “I think a senseful thing to do is for the government to be doing useful things in bad economic times.”
But the Conservatives do not agree with Sheikh. Conservative candidate for Calgary Nose Hill, Michelle Rempel, told Power Play that huge deficit spending is not the way to go – and the Liberals don’t understand that.
“It creates increases in taxes and it creates a downgrading in credit rating,” said Rempel. “The Liberals, once they figured out that budgets don’t balance themselves, they just gave up.”
The NDP also criticized the Liberals, saying that a balanced budget is achievable if a government sets its priorities straight.
“We’re going to have a fully costed platform and the point is we don’t actually need to go to into deficit to honour the commitments we’re making,” said NDP candidate for Halifax, Megan Leslie. “It is really about priorities and making those choices.”
Liberal Rodger Cuzner, who is running for re-election in Cape Breton-Canso, said he stands by his leader’s economic plan.
“It should get us through the hump period here with the downturn in the oil,” said Cuzner.
A recent Nanos Research poll shows that a majority of Canadians -- 54 per cent --support deficit spending, while 36 per cent oppose it and 10 per cent said they were unsure.
With files from the Canadian Press