The Canadian economy is on the brink of a recession, spelling trouble for Prime Minister Stephen Harper as he seeks a fourth term in office this year, according to Reuters. Currently, the New Democratic Party is taking the leading over Harper's Conservative Party. Voting takes place in October.
In explaining Canada's economic plight, Harper directs blame on external events, such as low oil prices, a weak Europe and volatility in China. While all of those factors play a role, placing the blame on external issues negates the domestic problems taking place within Canada. For instance, the manufacturing sector has been falling behind, including a lack of job growth and wage stagnation.
Harper is known as a sharp deficit hawk that has reined in spending, but critics note his inability to move the economy forward, and many Canadians share this sentiment. According to polling research, many believe the Conservatives cannot get the economy moving.
To Harper's credit, the economy has been running smoothly during his past three terms as prime minister, but voters are feeling a harsh economic pinch at the worse time for the Harper Administration. Harper still polls well when it comes to national security issues and the government accomplished a balanced budget forecast for 2015-16, but sound budgeting is not on the minds of voters, as many suffer through a sluggish economy with little relief in sight.
Finance Minister Joe Oliver believes any mention of a recession is premature, and he notes that Canada will close the year with a $1.4-billion surplus in the fiscal budget, but many doubt this will become a reality.
According to the Bank of Canada, the economy contracted in the first part of the year, and the central bank cut rates for the second time in 2015, driving down the Canadian dollar. The economy has exhibited consistent negative monthly growth, and a large trade deficit has forced many analysts to adjust growth forecasts for the Canadian economy.
The government remains unified in presenting a positive outcome, but analysts are not seeing the signs, especially Canadian voters. Frustration with the Conservatives was evident back in May, when Alberta voters voted in NDP members, disrupting 44 years of Conservative governance. Oil-rich Alberta has been especially hit hard by low energy prices, and many voters hope a change in party will turn things around. With the left gaining more traction, Harper must present sound solutions that will diversify the economy and boost domestic industry and wages.