Sliding stock markets and sagging natural resource prices have raised the stakes for the Oct. 19 federal election, as parties try to position themselves as the best choice to deal with an economic slump.
Statistics Canada’s release of data showing small contractions of the Canadian economy in the first two quarters of the year sparked a prolonged exchange between party leaders over whether the country is or was in a recession.
Economists such as Central 1 Credit Union’s Helmut Pastrick have mostly agreed the downturn is primarily based on low oil and gas prices, and isn’t a full-fledged recession. Central 1 forecasts continued slow economic growth for southern B.C. based on the low Canadian dollar and improvement in the U.S. economy.
Conservative leader Stephen Harper noted that the statistics showed a return to economic growth in June, and he accused Liberal leader Justin Trudeau of over-reacting to “a couple of months of weak data” to commit his party to up to three years of deficit spending.
Trudeau’s abrupt change of position on running deficits of up to $10 billion a year has redefined the debate. Trudeau unveiled what he called the biggest infrastructure plan in Canadian history, doubling the current Conservative budget from $5 billion to $10 billion in the next two fiscal years and continuing to increase it over 10 years.
Touring the Okanagan, NDP leader Thomas Mulcair touted his plan to reduce small business taxes and provide tax breaks for manufacturing, while balancing the budget in the first full year of an NDP mandate.
Mulcair’s promises of tax cuts and spending control prompted both the Liberals and Conservatives to accuse the NDP of creating a huge revenue hole that could only be filled by spending cuts or new tax increases.
The Conservatives estimate that Mulcair’s plans for a national daycare program, increased foreign aid and other spending leave a gap of $8 billion in the first year. The Liberals estimated the NDP budget gap at $28 billion over four years, not counting unspecified increases for veterans and home care.
NDP candidate Andrew Thomson called the Conservative calculation “deliberately misleading,” inflating the NDP’s housing plan cost by more than five times.
Harper has mainly run on his government’s record, including an increase in the Universal Child Care Benefit and cutting the Goods and Services Tax. The Conservatives estimate their measures have benefited the average family by up to $6,600 a year.