Stephane Dion and Jack Layton Are Here For Votes, Not For Canada

The major candidates (Stephane Dion and Jack Layton in particular) running in the current election (Harper aside) are suggesting the Canadian economy is on the brink of collapse and that real action is needed to save us and our wallets. But politicians can’t generally be trusted, and I am concerned that their inflammatory remarks might be the cause of any economic collapse. It is amazing what happens when people panic, after all, and the candidates in this election are doing everything they can to cause a panic. But how much of this is justified? I decided to see what economists (Harper aside) had to say about the current economic outlook for Canada.

According to an RBC economist:

“The U.S. economy now appears to be in recession with Europe, the U.K. and Japan also sinking fast,” RBC said. “While Canada is in better position with its financial sector less heavily impaired, overall growth will be substantially weaker than previously anticipated.”

“The continued weakness in the U.S. economy is expected to dampen growth in Canada,” said RBC’s chief economist Craig Wright. “However, this pressure on our growth will be tempered by strong commodity prices which are contributing to robust export revenues and providing support to Canadian domestic spending via a boost to incomes.”

Canada has also enjoyed strong growth in national income, which have boosted consumer spending, business investment and purchases of imports and is benefitting from what are still relatively high commodity prices, it said.

Job growth has also slowed and Canada’s housing market is cooling, but it is not expected to suffer a U.S. style meltdown as Canadian mortgage markets did not see the excesses that afflicted the U.S. housing sector, it said.

Words of wisdom from Global Insight, a think tank:

Global Insight, an economic think-tank, also cut its growth projections for Canada while declaring the U.S. is in recession.

“The U.S. economy is forecast to now be in recession,” it said, adding that it’s no longer just a “mild” recession and projecting the contraction in that giant economy will run from the third quarter of this year through the first quarter of next year.

Meanwhile, it cut its forecast for growth in Canada’s economy this year to 0.6 per cent from 0.8 per cent and next year to 0.9 per cent from 1.7 per cent.

However, there will not be two consecutive quarters in which the economy contracts.

“While a recession is most often defined as two consecutive quarters of negative growth, we should not take too much comfort in the ‘no recession’ forecast,” it added. “This is a very weak forecast of economic growth.”

And the International Monetary Fund

… projected that Canada next year will have the fastest growing economy of the G7 major industrial countries, at 1.2 per cent, despite virtually no growth of just 0.1 per cent in the U.S., Canada’s main export market.

Still need proof that this is not a good time to panic and we should all continue to live our lives, business as usual? The World Economic Forum has stated that Canadian banks are the soundest in the world.

Canada’s banking industry, led by Royal Bank, CIBC, Scotiabank, TD Bank, Bank of Montreal and National Bank, was given a rating of 6.8, the best ranking of any banking system in the world.

The top 10 soundest banking countries are as follows:

• Canada (6.8)
• Sweden (6.7)
• Luxembourg (6.7)
• Australia (6.7)
• Denmark (6.7)
• Netherlands (6.7)
• Belgium (6.6)
• New Zealand (6.6)
• Ireland (6.6)
• Malta (6.6)

Really, I think Stephane Dion and Jack Layton ought to be ashamed of themselves – they are trying to spread panic to gain votes and that is appalling. They may be candidates in the current election, but they are still citizens of this country and their current scare tactics will have the opposite effect than would be desired. Stephen Harper, on the other hand, saw the current crisis coming and planned for it. While Layton and Dion can live in Never Never Land dreaming of fairies and mermaids, the rest of us have to live in the real world, and Stephen Harper (I can’t believe I am writing this) seems to be the only one who understands this.