The Commons: The prudence of pessimism

by Aaron Wherry

The Scene. Thomas Mulcair had tried to reason with the government.

“According to StatsCan, of the 300,000 people who have lost their jobs since the election, only four out of 10 workers have qualified for EI. Parliament has spoken and called upon the government to reform employment insurance. Today, the conference board repeated that,” he said. “Why is it doing nothing to help?”

“Mr. Speaker, let us not quibble about the statistics that he is citing,” sighed Diane Finley, accusing Mulcair of misconstruing the situation and “playing petty partisan politics with the futures of real people.”

Now, the NDP deputy leader was merely mad, yelling and pointing across the aisle. “Mr. Speaker, in September, the Conservatives were saying there would be no recession and no deficit. In November, it was a technical recession and small surplus. In January, it was a recession and some deficit. In the past 24 hours, both the parliamentary budget officer and the TD Bank are predicting record deficits and a long recession,” he reported. “What purpose is served by continuing to misstate the facts as she just did on the deficit, the recession and unemployment? Start telling the truth to Canadians. Start respecting the votes in the House and we can start implementing resolutions like the EI proposals adopted two weeks ago. Start helping Canadians and stop lying.”

The Conservative side howled at the allegation. The Speaker reprimanded Mulcair. And Jim Flaherty stood to offer a rare response.

“Mr. Speaker, the budget that we presented only weeks ago in this House made economic assumptions that were more pessimistic than the average of the private-sector forecasters,” he said for the sake of self-congratulation. “We are going to have a lot of opinions about the recession and about the rate of negative growth this year. Having said that, all of the economists say they did not see the recession coming. None of them saw the recession coming and that is why we have made assumptions below the predictions of the private sector economists. I understand the member opposite is not familiar with that because he did not read the—”

The Speaker cut him off there, the Finance Minister’s time having expired.

On the matter of what the economists knew and when, Flaherty was at least half right. Indeed, on October 6, 2008—a week before the federal election—Canadian Press reported that the country’s leading banks were predicting not a recession, but “something worse than a recession.”

And, in fairness, not all those identifying themselves as economists were so pessimistic.

On Sept. 15, Stephen Harper had surmised that, “if we were going to have some kind of big crash or recession, we probably would have had it by now.”

Eleven days later, and just one day after TD Bank had warned that the global economy was headed for a “mild recession,” Harper amended his prediction to warn that only Stephane Dion would bring on such a downturn here. “The only way there is going to be a recession is if they’re elected,” he said of the Liberals during a campaign stop in Alberta.

By election day, the Prime Minister was limiting his predictions to that which he could seemingly control. “We’ll never go back into deficit,” he wrote in an op-ed for the Toronto Star.

Little wonder perhaps that Flaherty and the Finance Department were reluctant to trust the more optimistic projections of the so-called economists when writing the budget. But then pessimism is hardly an answer either.

With Kevin Page, the independent officer of Parliament assigned to scrutinize the government’s accounting, was telling a committee yesterday that Flaherty’s projections weren’t gloomy enough—the deficit over the next two years now projected to be a little over $70-billion—Conservative Mike Wallace appealed to the intrinsic hope of humanity. “I believe part of the issue facing Canada and the world is we need some of the positive stuff,” he said. “And when the positive stuff does come out it tends to get discounted immediately.”

As an example, he cited his own life. “I myself purchased two cars these past two weeks. I am doing my share,” he said. “I think there’s some good news stories. It’s not great news, don’t get me wrong.”

The Liberals were apparently unpersuaded by this testimonial. Yesterday they had raised the case of Ted, a father of four with a wife on disability who didn’t meet employment insurance requirements and was now set to lose his home. Today, they came back with other such tales.

Judy Foote raised the matter of Roger from Harbour Breton, who had waited 70 days to hear back from the government on his EI claim. “I ask the minister this,” Foote said to Finley, “how does she respond to her constituents when they tell her they do not have money to buy medication, pay their bills, or put food on the table for their children?”

Scott Andrews raised the matter of Donald, who waited 16 weeks before money arrived. ”I ask the minister this,” Andrew said to Finley, “what do Conservatives say to people like Donald when they are forced by the government to suffer through this ordeal?”

Next to stand was Andrew Kania. “Mr. Speaker, in the Toronto area alone there 207,000 unemployed Canadians not receiving EI benefits. One of those many Canadians is my constituent Dan Troda. He is a 41-year-old disabled Canadian with spinal stenosis. He has three young children, a mortgage, numerous financial obligations. He and his family are very afraid. He has EI approved to him only for re-education funding, not benefits,” Kania explained.

“On behalf of Mr. Troda and all unemployed Canadians, why will the Conservatives not provide the help that is needed now? Mr. Troda is watching right now,” he finished, pointing to a television camera at the other side of the room. “He deserves an answer.”

Finley offered what she could. “Mr. Speaker, we know that these are very trying times for too many people. It is very unfortunate, and unfortunately it is going to continue for a while longer,” she said. “That is why we are investing in additional programs, even for those like Mr. Troda, so that they can get the skills and training they need to get the jobs that will let them take care of their families in the future for many years to come, so that they do not have to rely on the EI system. They will be able to take care of themselves.”

Mr. Troda is invited to drop me an email and let me know if that helped any.

Near the end of Question Period, the government tried to counter all this, and assuage Mr. Wallace, with a question of their own.

“Mr. Speaker, we are all sensitive to the job losses occurring across Canada, but I am hearing from companies in my riding that are hiring,” reported Harold Albrecht, a Conservative from Kitchener. “Could the Minister of Industry please tell us if he has any examples of Canadian companies that are in fact expanding?”

Up came Tony Clement with some happy news.

“Mr. Speaker, over the last months we have had examples of companies expanding throughout the country,” he said. “Just yesterday Associated Packaging Technologies announced it is investing millions into its food packaging plant in Cambridge, which currently employs 130 Canadians and will be considering hiring additional workers. Earlier this month Bombardier announced Lufthansa will be purchasing 30 C series aircraft, with a possible purchase of an additional 30. The contract is for $1.5 billion. Yesterday the city of Timmins confirmed that online services will build a new centre, saving 200 jobs and possibly creating 200 more. Despite the world economic downturn, we are acting and so are—”

The speaker cut him off there, his time had expired. But to the pessimism everywhere else, here was the optimism. The search for realism continues.

The Stats. The CBC and employment, nine questions each. Listeriosis, four questions. Parliamentary budget officer, three questions. The economy, government contracts, forestry and immigration, two questions each. Crime, seniors, tasers, high-speed rail, election financing and the environment, one question each.

James Moore and Diane Finley, nine answers each. Gerry Ritz, four answers. Jim Flaherty, Jacques Gourde, Gerald Keddy and Jason Kenney, two answers each. Rob Nicholson, Peter Van Loan, Keith Ashfield, Jay Hill, Tony Clement and Jim Prentice, one answer each.

The Commons: The prudence of pessimism

  1. “Could the Minister of Industry please tell us if he has any examples of Canadian companies that are in fact expanding?”

    Foreclosure companies perchance?

    • It’s a golden age for the repo business…one that will never end…

  2. Harper did predict that there would be trouble to come. He was off by months. Doesn’t anyone remember December 2007?

    “Harper ready to give us the squeeze. Tells Canadians to tighten their belts as U.S. financial collapse looms” (Ottawa Sun, December 21, 2007).

    “In CTV’s year-end interview with Prime Minister Stephen Harper, he says he’s concerned about the slowdown in the American economy and how it could impact businesses north of the border” (Canadian Press, December 20, 2007).

    “After almost two years of ‘don’t worry, be happy’, the PM has been raising a caution flag, if not an alarm, about the Canadian economy in the year ahead. ‘I think 2008 will be a more challenging year for the country and for the government,’ he predicted during a recent chat with us at 24 Sussex Dr.” (Greg Weston. Whitehouse Star, December 31, 2007).

    “Harper said he’ll be keeping watch on the looming storm on Canada’s economic horizon. ‘We know there is considerable uncertainty in the world economy, in the American economy, and we’ve seen very strong performance from our economy so far,’ he said Monday. ‘So obviously, our wish for the year is we’re able to sustain that momentum and shelter as best we can Canadians from any fallout of global economic problems’” (Canadian Press, December 31, 2007).

    “Prime Minister Stephen Harper expects Canada’s economy to suffer next year, buffeted by turmoil south of the border [...]. In a calculated signal to Canadians, Harper said that 2008 will be “more challenging” for his government and the country. “There remains very serious economic uncertainty in the United States and in other parts of the world, and it’s impossible for me to see how Canada can be entirely immune from those developments,” he said in a year-end interview with the Star.” (Toronto Star, December 21, 2007)

    “Prime Minister Stephen Harper is warning Canadians to brace for fiscal belt-tightening as a looming economic collapse in the U.S. threatens to make waves north of the border. Looking to an uncertain 2008, [his] government will save for rainy days ahead by foregoing sizeable tax cuts and keeping a tight grip on federal purse-strings in the next spring budget. “[...] We didn’t wait for the spring. We were concerned about the American economy and we thought we had to act quickly,” Harper said.” (CN News, December 20, 2007)

    ““The [2008] budget will be a stand-pat budget,” he said. “We will be doing what households and businesses do in a time of uncertainty—concentrating on stability and paying down our debt.” And he is braced for unsettling economic times. “It’s hard for me to see,” he said, “how we can continue to have the kind of uncertainty and potential slowdown in the United States and elsewhere without that having some impact on the Canadian economy.”” (MacCleans, December 28, 2007)

    ROBERT FIFE (Reporter): As the Prime Minister sat down with CTV to reflect on the past year, he has worries about the next. Top of mind, a threatening downturn in the American economy that will be felt north of the border.
    STEPHEN HARPER (Canadian Prime Minister): I believe that 2008 is likely to be a challenging year in terms of the economy… There’s no way we can be completely insulated from what’s going on in the United States or in the global economy (CTV National News, December 20, 2007).

    The Liberals and the NDP in December 2007

    “[John] McCallum said the government is overstating the risks because many experts expect the Canadian economy to grow by up to 2.5 per cent this year, which would leave room for spending and tax initiatives” (Toronto Star, January 1, 2008).

    “McCallum accused Harper of sending a confusing message to consumers by combining talk of a tax cut with a warning the economy could be headed for trouble. ‘This is clearly a triumph of gimmickry over good public policy to announce the GST cut in a store and tell us the cupboard is bare,’ said McCallum. ’I think they’re trying to downplay expectations and then people will be positively surprised’” (Toronto Star, January 1, 2008).

    Stéphane Dion recently admitted that ‘It was difficult for us to write a chapter on a U.S. economic crisis when we were preparing our platform’ (Stéphane Dion, Le téléjournal, October 6, 2008).

    “NDP leader Jack Layton accused Mr. Harper of trying to ‘create a climate of fear’ to justify government plans for the economy, as he said the government has done to gain support for the war in Afghanistan and to avoid joining the global fight against climate change. ‘If the economy is getting into some trouble and the government’s finances are in some trouble, it’s because Mr. Harper has paid no attention to that issue (climate change) at all,’ Mr. Layton said, adding that his party will continue to vote against the government on no-confidence motions” (Ottawa Citizen, December 24, 2007).

    JACK LAYTON: “Well I think he is trying to create a climate of fear, and, you know, that’s been his approach unfortunately on some issues, whether it was the way in which we have gone to war in Afghanistan” (CTV, Question Period, December 23, 2007).

    • All that wonderous forsight by Harper in 07, undone by his election 08 mumble jumble (and Flaherty’s infamous November F.U.) . A shame really.

    • I’m not sure what your point was in posting all of this. We knew toward the end of 2007 that the booming gangbusters of an economy was slowing down. Everybody knew that, you didn’t need to be an economist or a forecaster to see it. What wasn’t clear on the horizon was the credit meltdown, or the housing bust. We didn’t know about that until about early September–sometime in September it was clear we were headed for major financial trouble. Everyone knew it except, apparently, Harper, who continued to believe it was ‘belt-tightening’ time as at the end of 2007. We lost the belt altogether in September 2008.

      As for the opposition comments, all they were saying is you can’t reduce the GST because the government has loads of cash at the same time that you caution all and sundry that we were in for ‘belt-tightening’. Either the government was confident it had the cash it needed (hence the GST cut) or it was concerned it would have to pinch pennies (hence the belt-tightening discussions). The opposition was just pointing out it couldn’t be both at the same time.

      • Curse you and your cold hearted logic

      • would only quibble with “Everyone knew it except, apparently, Harper, who continued to believe it was ‘belt-tightening’ time as at the end of 2007.”

        i am not convinced that just because that is what he said, that is what he believed.

      • Apparently the rationale behind all those ‘lucid’ Harper quotes was to show us that he really isn’t as bad an economist as he appears. It also re-affirms that he is the biggest flimflam man in the history of confederation. Proof well made, sir.

  3. Aaron, you only started blogging halfway into QP today? You missed the best parts! Were you late?

  4. It is downright unCanadian to not buy two cars in this time of need. Thank you Mr. Wallace for showing us the light. You did your part, now we’ll do ours. Once I stop reeling from my monthly overdraft, I will purchase two vehicles myself.

  5. “Mr. Speaker, we are all sensitive to the job losses occurring across Canada, but I am hearing from companies in my riding that are hiring,” reported Harold Albrecht, a Conservative from Kitchener.

    Obviously…having three-quarters of stimulus projects going to Conservative-held ridings can do that kind of thing.

  6. “I ask the minister this,” Foote said to Finley, “how does she respond to her constituents when they tell her they do not have money to buy medication, pay their bills, or put food on the table for their children?”
    She doesn’t.

  7. I personally believe that in the case of economic crisis such as we have now, the first duty of the government is to make EI payments to all those who lose their jobs quickly and for the entire period of the recession. This also helps to stimulate the economy, since such money will all be quickly spent by the unemployed. Unfortunately the Harper government does not fulfill this basic obligation.

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