So we are heading into another federal election. Much of the Conservative platform has been based on their “stewardship” of the Canadian economy. According to their propaganda, they are the only party that can be trusted to move our economy forward.
Recent statistics have suggested that the Canadian economy is improving under their direction based on an increase in gross domestic product (GDP). Does anyone outside of academic economists understand how GDP is even calculated? Or what it really represents?
We have been conditioned into believing that positive GDP numbers reflect greater prosperity for all of us. Well, most of us anyway. Or maybe only some of us. Or maybe corporate profits that dribble down to the rest of us.
Any other political choice, according to Mr. Harper, would lead Canada into the land of fire and brimstone. I think that it’s time for a reality check.
What effect does the federal government really have on our economy? All economists agree that the direct influence by government on business is twofold: first, what the government charges to do business, through taxes, royalties and incentives; second, what laws, standards and regulations are in place that provide the conditions that allow a business to undertake its activities.
These provide the framework under which economic activity takes place. National standards to conduct business have and continue to evolve in Canada since confederation.
The ultimate influence by the federal government on the national economy? Very small.
Time for a reality check, methinks. Mr. Harper hitched a large part of the national economic wagon to bitumen sands projects in Alberta. Billions of dollars were invested.
Canadian Petroleum Producers (CPP) commercials suggested that the economic benefits transcended provincial boundaries and we would all be rolling in petro-dollars. And the proposed Keystone, Eastern and Gateway pipelines were supposed to provide huge economic benefits to Canada, with unrefined bitumen exported to other countries.
Then the price of high-quality crude oil plummeted to currently about $45 a barrel (bitumen from the tar sands does not fetch a premium price). CPP propaganda appears to have disappeared from the media. And we remain hewers of wood and drawers of water, exporting raw materials with no value added.
Why isn’t bitumen refined in Canada, providing both permanent jobs and secondary value-added products? The economic path that Mr. Harper has led us along, and wants to continue, has provided few advantages for our country.
And now we have the Trans Pacific Partnership. We are assured that it will benefit the Canadian economy “significantly.” No details or even generalities have been provided.
This is typical of Mr. Harper’s approach to political decisions: keep the electorate in the dark, don’t tell us anything, just assume that the Conservatives are looking after our interests. We are expected to believe what we are told.
Not mentioned is that none of the trade deals signed by Mr. Harper have had any economic benefit for Canada. We import more from the signatories than we export. A recent trade deal with South Korea was to benefit both parties. Really? Yes, trade with South Korea has increased: we import almost 10 per cent more from that country since the trade agreement. And we export about 10 per cent less.
Mr. Harper’s Conservatives have a terrible record when it comes to economic development and management. Ultimately it is an issue over which any government has little significant influence. The economy has been used as a distraction over issues that deserve far more attention.
Thomas Heine is a retired geologist who lives in Flin Flon.
