A day before Statistics Canada releases new data that may show whether the economy met the definition of a recession for the first half of the year, Conservative Leader Stephen Harper continued to tout his government’s economic record and urged Canadians to “stay the course.â€
Asked twice by reporters Monday how he would personally define a recession, Harper – who studied to be an economist --
He said he’s been simply laying out “the facts†about the current economic situation, supported by financial analysts and the Bank of Canada.
“We’ve had a contraction that has been focused almost entirely in one particular section of the economy, particularly the energy sector,†Harper said at a campaign stop in Ottawa.
He said 80 per cent of the overall economy has grown, but “we obviously have an impact on our economy because of oil prices.â€
Despite those challenges, Harper said his government was “well ahead†of its fiscal projections for the first three months of 2015.
“I think it’s more important to describe the reality of a situation, rather than labels,†he said, speaking in French.
Statistics Canada will release GDP figures for June on Tuesday, which will show whether Canada had two consecutive quarters of negative economic growth – the common definition of a recession.
Speaking to supporters at an Ottawa hotel, Harper said Canada must “stay the course†in order to weather “global economic uncertainty.â€
He once again touted a recently reported surplus of $5 billion in the first quarter, new child-care benefits and the Conservative plan to introduce income splitting for families.
Harper took aim at NDP Leader Tom Mulcair and Liberal Leader Justin Trudeau, saying his rivals don’t have what it takes to steer the economy through challenging times.
He ridiculed Trudeau’s plan to run “modest†deficits until 2019.
"He's gone from saying, 'Well, deficits don't matter because the budget will balance itself,' to 'Look, we're going to have a deficit, isn't it an awful thing?' and now, 'No, I want to run deficits because they're a good thing,’†Harper said.
"We cannot afford people who are not ready, changing their plan every couple of weeks."
He also said the NDP would “borrow lots of money,†to pay for its election promises, which will raise taxes and “wreck the economy.â€
Mulcair responded by saying that the NDP’s policies are “costed every step of the way.â€
At a campaign stop in Saskatoon Monday, Mulcair said his party would raise corporate taxes and close “tax loopholes†for CEOs, to help lift children out of poverty and support his $15-a-day national child care plan.
Whether Canada is in a technical recession or not, the “NDP has a plan,†Mulcair said.
“Whatever is in that (Statistics Canada) report, it’s not going to change the fact that Stephen Harper’s plan is not working,†he said, accusing Harper of making the economy “less balanced, less diverse.â€
“We’ve got a different approach than Mr. Harper. We’re going to get it done.â€
Trudeau did not weigh in, as he was not campaigning Monday.
Recession definitions are ‘subjective’
Senior TD Bank economist Randall Bartlett pointed out that there is no “official recession-dating body†in Canada, adding that determining whether a recession has occurred “ultimately comes down to subjective judgement.â€
Bartlett said some choose to define a recession as two consecutive quarters of negative GDP growth, but most economists only call a recession if the two quarters of negative growth has also been “diffused†throughout most sectors of the economy.
Bartlett said he believes the economy experienced a recession based on the latter definition.
“We’ve seen a great deal of weakness in the first half of 2015, where most sectors of the economy have actually contracted, as opposed to it just being concentrated in one single sector,†he said.
However, Bartlett said it was a “mild recession†that he believes is already over.
“We’re going to continue seeing pretty steady and positive growth over the next year and a half,†he said.
Not all economists agree there was a recession, Bartlett said, calling it “hotly debated.â€
Bartlett also pointed out that the C.D. Howe Institute’s Business Cycle Council recently offered its and concluded that Canada had not experienced a recession.
The Business Cycle Council defines a recession as a “pronounced, pervasive and persistent decline in aggregate economic activity†while considering “duration, amplitude, and scope.â€
What a recession might mean for the election
Nanos Research political analyst Greg Weston said the true question that needs to be asked is whether people feel they have been “hurt†by an economic slowdown.
“The chances are if an economist has to tell you that there’s a recession, it hasn’t hit most Canadians yet,†Weston told CTV Power Play. “If it goes on for a bit, this could be a real problem and it could, indeed, have a major impact on this election.â€
Strategist Robin Sears, from the Earnscliffe Strategy Group, agreed a recession could be a factor in the campaign, depending on “how angry people are when they go to vote.â€
