POLITICS

Stephen Harper: Economic Downturn Is Only Temporary

08/03/2015 04:41 EDT | Updated 08/03/2015 04:59 EDT

Stephen Harper made an effort on the campaign trail Monday to reassure Canadians about their limping economy, insisting that hurdles like the sliding price of crude oil have caused only momentary ripples in some sectors.

Right out of the campaign's starting gate, the Tories have been trying to sell Harper's reputation as a strong fiscal manager.

But for months, economic indicators have told a different story: the economy contracted the first five months of 2015 and forecasters — including the Bank of Canada — have downgraded their economic predictions for the year.

Despite the dampened expectations, analysts have projected some growth over the rest of 2015 — forecasts Harper has been talking up since the campaign began Sunday.

"Look, these are temporary effects," Harper said Monday as he started the first full day of the Conservative election campaign in Laval, Que., north of Montreal.

"We all knew that with lower oil prices, lower resource prices, there were going to be some temporary effects in some sectors of the economy."

The Tory leader added more reassuring words by insisting Canada remains "head and shoulders" above its G7 partners in terms of long-term economic growth, including on the job front.

He also promised a re-elected Conservative government would spend $60 million a year on increased and extended tax credits for businesses that hire tradespeople.

Some sectors of the Canadian economy are still growing, Harper argued, despite what he described as the outside factors that are to blame for the slowdown.

He pointed a finger — as he has in the past — at the instability in China and Europe as well as the unexpected slow growth in the United States.

"Even through that, we have sectors of the economy that continue to grow," Harper said. "We remain optimistic about the turnaround that everybody is predicting."

Canadians have a "very simple choice" when they head to the polls on Oct. 19 and "instability in the world" is no reason to ditch an economic plan he insists is working.

"Analysts are predicting good growth for this economy into the future as long as we stay on track," he said.

"It is a time to stick to our plan, make wise investments, control our spending, lower taxes and make sure our fiscal situation is balanced and strong."

One expert said it's hard to fact check whether Harper's statements on the Canada's economic growth has been stronger than other G7 countries because he didn't specify a time frame.

Stephen Gordon, an economics professor at Quebec City's Laval University, said in interview that without specifics, Harper's statement sounds more like "very vague and fuzzy, feel-good things."

Gordon said it's also difficult to know just how temporary the current obstacles will be.

On the bright side, he said the U.S. recovery appears to have taken hold and the low Canadian dollar should help boost exports.

However, Gordon added that nobody knows what will happen to the price of many resources, which make up a big segment of the economy.

Harper was hit with more bad economic news Friday when Statistics Canada indicated real gross domestic fell 0.2 per cent in May, due mostly to weakness in sectors including manufacturing, mining and oil and gas.

Despite Canada's low dollar, sectors like manufacturing have failed to pick up the slack following last year's oil-price collapse.

The gloomy economic data of late have opened a vulnerable Tory flank on which Harper's rivals wasted no time capitalizing.

"The economy has shrunk in each of the last five months and many are claiming that Canada is already in another recession," NDP Leader Tom Mulcair — who had no public eventsMonday — said the day before in Gatineau, Que.

"Clearly, Mr. Harper, your plan isn't working."

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