Economic performance and policy during the Harper years
Relative to the 1984-2005 period, Canadian economic performance during the Harper government years worsened on most aggregate measures of growth and jobs.
Canadian macroeconomic performance during the Harper government years was driven largely by global economic developments; federal economic policy initiatives played a relatively minor role in shaping Canadian performance, except during 2008-10. A severe US recession and sluggish US recovery along with a sizable loss of Canadian cost competitiveness depressed Canadian growth. The drag was offset only partly by the positive effects of stronger prices for commodities and lower global and domestic interest rates. The resilience of the Canadian banking system and the relative buoyancy of the Canadian housing market, which owed little to Harper government policies, helped to preserve financial stability and buttress economic growth, in contrast to what happened in many other advanced economies.
With the exception of 2009-10, the Harper government underspent on infrastructure, thereby constraining future growth. Policy on development of the oil sands and related environment policies fostered unbalanced growth over the last decade.
Finally, the Harper government did deliver on its low-tax balanced-budget promise while actually increasing program spending. This accomplishment was facilitated by the greatly reduced public debt charges that arose from budget surpluses in 1998-2005 and a sharp fall in interest rates — neither of which was the result of Harper government actions.
Economic performance and policy during the Harper years - Policy Options
Relative to the 1984-2005 period, Canadian economic performance during the Harper government years worsened on most aggregate measures of growth and jobs.
Canadian macroeconomic performance during the Harper government years was driven largely by global economic developments; federal economic policy initiatives played a relatively minor role in shaping Canadian performance, except during 2008-10. A severe US recession and sluggish US recovery along with a sizable loss of Canadian cost competitiveness depressed Canadian growth. The drag was offset only partly by the positive effects of stronger prices for commodities and lower global and domestic interest rates. The resilience of the Canadian banking system and the relative buoyancy of the Canadian housing market, which owed little to Harper government policies, helped to preserve financial stability and buttress economic growth, in contrast to what happened in many other advanced economies.
With the exception of 2009-10, the Harper government underspent on infrastructure, thereby constraining future growth. Policy on development of the oil sands and related environment policies fostered unbalanced growth over the last decade.
Finally, the Harper government did deliver on its low-tax balanced-budget promise while actually increasing program spending. This accomplishment was facilitated by the greatly reduced public debt charges that arose from budget surpluses in 1998-2005 and a sharp fall in interest rates — neither of which was the result of Harper government actions.
Economic performance and policy during the Harper years - Policy Options
