Sharply dropping oil prices and a weakened Canadian energy sector are revealing the limited, ineffectual nature of Stephen Harper's economic policies. Those policies, focused almost exclusively on that one sector, are too narrow. They have rendered Canadians more vulnerable and less resilient. And his government seems out of gas.
Unable to cope with adverse economic developments, Mr. Harper is now retreating to a bunker. Instead of reaching out to Canadians to show leadership and build confidence, he has punted the federal budget, normally delivered in February or March, into April or later. That means Canada will go without a budget for more than this entire fiscal year.
With business and consumer confidence already on shaky ground, failing to produce a budget on time sends a message of further uncertainty and incompetence. Maybe the late Jim Flaherty could have pulled it off, but not the hapless Joe Oliver. One day last week Mr. Oliver was proclaiming low oil prices had already been fully factored into all his calculations, only to swallow himself whole the next day to confess they were not. Making the Finance Minister look foolish is not good government strategy.
Make no mistake, this jiggery-pokery to keep Canadians in the dark about the budget while the books are being cooked -- all to salvage Mr. Harper's Income Splitting scheme for wealthier taxpayers -- is dictated straight out of the Prime Minister's Office. It follows a pattern of economic ineptitude that has coloured Mr. Harper's career.
In Opposition, his most noteworthy policy ideas were the elimination of the Canada Pension Plan and giving Canada a banking system like the one that failed so spectacularly in the United States.
To get elected, he solemnly pledged never to diminish Canada's Old Age Security system and never to tax retirement savings in Income Trusts. Once in office, he did both.
At the start of his tenure in 2006, Mr. Harper inherited (from Liberals) a decade of balanced budgets, an annual surplus of $13-billion, declining debt and taxes, an economy growing at 3 per cent or better every year, 3.5-million net new jobs, strong banks, a sound and secure CPP, and the most robust fiscal position in the western world. In barely two years, Mr. Harper squandered it.
Through reckless spending and bad management, he burned through Canada's fiscal strength in barely two years, putting this country back into deficit again in 2008. That was BEFORE, not because of, the global recession that arrived in Canada that autumn.
Mr. Harper failed to anticipate the storm that was brewing. He denied any deficit. He denied there was a recession. He depicted it as just "a good buying opportunity", prescribed austerity as his only policy, and predicted five more surplus budgets. He was wrong on every count.
At the beginning of 2009, he flip-flopped into a belated stimulus program that was so burdened by his craving for "political credit" that it was largely delivered only AFTER the recession was over. His legacy is $160-billion in new Harper debt -- that's an INCREASE in federal debt of nearly $20,000 for every Canadian family -- and Canada still hasn't recovered from the recession, now more than five years since it ended.
Economic growth under Mr. Harper has averaged a meagre 1.7 per cent. No other Prime Minister has done worse since R.B. Bennett in the 1930s. The job market remains sluggish and inconsistent. Young Canadians especially face recession-like conditions.
In the meantime, led by the F-35 fighter jet fiasco (which the Auditor General and the Parliamentary Budget Officer characterized as incompetent and deceitful), the Harper regime has botched a long list of military procurements. They have neglected returning soldiers and veterans. They have undermined public safety and security. They have jeopardized environmental standards. They have failed to get Canadian resources (both grain and oil) to market. They have made a mess of Temporary Foreign Workers. The list goes on and it doesn't inspire confidence.
With compounding trouble now in the resources sector -- big job losses, collapsing investment plans, a ballooning trade deficit -- this government's "budget-in-hiding" is yet another Harper travesty. But no one should be surprised.
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