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April 23rd, 2011

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02:06 pm - Harper and the economy
It is strangely ironic watching this current elections unfold. Harper is campaigning on nothing but the economy, insisting that the only way for the Canadian economy to remain stable is to re-elect his government. Surprisingly, none of the opposition parties are hitting him on that issue, basically enforcing the notion that he is better for the economy. Instead they chose to attack certain spending policies without addressing the main point, if conservatives are good for the economy in the first place. So lets analyze what happened in the last 6 years to the Canadian economy. Before the conservatives took power, Canada was the only G8 country with a surplus, all the other nations were running deficits and this is not new, the situation has been the same for years. Add to that a major trade surplus, Canada exports were higher than the imports for many years.
The conservatives also inherited the strongest financial system in most developed countries, with strict rules on lending and guards against mixing insurance, lending and consumer products. On top of everything, the world has been going through a resource based economical cycle, with oil hitting over $100/barrel, gold at record highs and many other resources (e.g potash) being in high demand. Then comes the economic crisis of 2008.
Any credible economist would tell you that despite being tied to the global economy, Canada economy would not have been affected in any major way by the collapse. With a great banking system, an endless supply of natural resources and a booming economy. Instead of using Canada's solid position to move Canada forward, the Canadian government chose to hide, focus on projects that have absolutely nothing with Canada's economical future. But rather with projects that have very localized effect! Construction projects handouts to US corporations and endless list of rural projects. There was also a reduction in GST, which has very little effect on the economy since the GST mostly affects the local economy. Harper keeps talking about the global economy but almost as if Canada is minor dependent on that economy, not a leader. In this global crisis you can probably count on your hands the number of times Harper went on a trade mission, even worse I can count on one hand the times Canada was successful in scoring major deals that Canada would benefit more than the other parties. Lets not mention the whole lumber deal when Canada agreed to a much lesser deal than what the WTO imposed on the trade! Fast forward to today, most countries have recovered from this global economical crises, and Canada returned to exactly where it was, not better not worse. Most people who have no ambition would say that the current government did a good job, I totally disagree, this was Canada's moment to shine. With a great banking system, a local economy that would not be affected by the mortgage meltdown, and immense natural resources we should be heading to the top. Think of any major crises in human history, there was always countries that took advantage and surged ahead to go to the top (Japan post WW2). This time around Canada just stood by and watched. So if we want to talk about the economy, lets talk about the missed opportunities not how well we coped with a crises that would have a negligible affect on us! We lost our moment, and sadly all we have is an economy that is no better than what we already had in 2007.


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