Canada’s Conservatives to call national election before economic downturn worsens
By Keith Jones
4 September 2008
Before the week is out, Canadian Prime Minister and Conservative Party leader Stephen Harper is all but certain to call a federal election for Tuesday, October 14.
Harper met individually with the three other major party leaders between Friday, August 29 and Monday, September 1. The ostensible aim of these meetings was to determine whether a fall session of parliament would be “productive.” In reality, the meetings were pro forma affairs staged so that Harper can claim that despite his attempts to find “common ground” with the opposition, his minority government lacks sufficient parliamentary support for its legislative agenda. An election is needed therefore—or so the argument goes—to put a “dysfunctional” parliament out of it misery.
Far and away the most important of these reasons is the rapidly deteriorating economic situation.
Mounting economic crisis Economic growth has stalled, with the economy contracting in the first quarter of the year and registering anemic growth in the second. On Tuesday, the Organization for Economic Co-operation and Development or OECD lowered its projection for Canada’s economic growth in 2008 to 0.8 percent. Among the G-7 countries, only Italy is expected to have slower growth.
Although technically the country is not in a recession, 55,000 jobs were cut in July, more than in any month since the 1990-91 slump.
The slowdown in Canada’s economy and that of the US, which consumes over three-quarters of Canada’s exports, comes after years of wrenching job losses in the manufacturing sector. Since 2002, some 400,000 manufacturing jobs, more than 15 percent of the total, have been eliminated as a result of the rise in the value of the Canadian dollar, off-shoring, increased foreign competition, and the never-ending corporate drive to sweat out greater profits. Especially hard-hit have been the auto and forest industries.
A commodity-resources boom in the mining and energy sectors and a surge in investment in Alberta’s oil tar sands have meant buoyant profits for key sections of Canadian capital and limited the growth in unemployment. But this is now all threatened. Commodity prices have begun to recede as demand tapers off in China and elsewhere and the US sub-prime mortgage crisis is cascading through the world financial system.
The Conservatives manifestly fear the electoral impact of mounting job losses and financial market turbulence. Rising prices have also severely pinched the incomes of working people. Between April and July the increase in Canada’s Consumer Price Index doubled from 1.7 to 3.4 percent due to soaring oil and food prices.
But Harper also aims to use the worsening economic situation to appeal to big business to rally behind his party’s drive to secure a majority government.
By Keith Jones
4 September 2008
Before the week is out, Canadian Prime Minister and Conservative Party leader Stephen Harper is all but certain to call a federal election for Tuesday, October 14.
Harper met individually with the three other major party leaders between Friday, August 29 and Monday, September 1. The ostensible aim of these meetings was to determine whether a fall session of parliament would be “productive.” In reality, the meetings were pro forma affairs staged so that Harper can claim that despite his attempts to find “common ground” with the opposition, his minority government lacks sufficient parliamentary support for its legislative agenda. An election is needed therefore—or so the argument goes—to put a “dysfunctional” parliament out of it misery.
Far and away the most important of these reasons is the rapidly deteriorating economic situation.
Mounting economic crisis Economic growth has stalled, with the economy contracting in the first quarter of the year and registering anemic growth in the second. On Tuesday, the Organization for Economic Co-operation and Development or OECD lowered its projection for Canada’s economic growth in 2008 to 0.8 percent. Among the G-7 countries, only Italy is expected to have slower growth.
Although technically the country is not in a recession, 55,000 jobs were cut in July, more than in any month since the 1990-91 slump.
The slowdown in Canada’s economy and that of the US, which consumes over three-quarters of Canada’s exports, comes after years of wrenching job losses in the manufacturing sector. Since 2002, some 400,000 manufacturing jobs, more than 15 percent of the total, have been eliminated as a result of the rise in the value of the Canadian dollar, off-shoring, increased foreign competition, and the never-ending corporate drive to sweat out greater profits. Especially hard-hit have been the auto and forest industries.
A commodity-resources boom in the mining and energy sectors and a surge in investment in Alberta’s oil tar sands have meant buoyant profits for key sections of Canadian capital and limited the growth in unemployment. But this is now all threatened. Commodity prices have begun to recede as demand tapers off in China and elsewhere and the US sub-prime mortgage crisis is cascading through the world financial system.
The Conservatives manifestly fear the electoral impact of mounting job losses and financial market turbulence. Rising prices have also severely pinched the incomes of working people. Between April and July the increase in Canada’s Consumer Price Index doubled from 1.7 to 3.4 percent due to soaring oil and food prices.
But Harper also aims to use the worsening economic situation to appeal to big business to rally behind his party’s drive to secure a majority government.
