We’re number… 15?

by Aaron Wherry

Kevin Carmichael checks one of the Harper government’s favourite rallying cries.

While a valid bragging point in the aftermath of the financial crisis, Canada no longer is an economic standout among its peers. The International Monetary Fund identifies 35 countries as “advanced economies,” ranging from Australia to the United States. According to the IMF, Canada’s gross domestic product will expand by a little less than 2 per cent in 2013. That bests only European economies coping with the recession in the euro zone. Australia, Estonia, Hong Kong, Iceland, Israel, South Korea, Malta, New Zealand, Norway, Singapore, the Slovak Republic, Sweden, Taiwan, and the U.S. all are forecast by the IMF to outpace Canada next year…

Mr. Flaherty can accurately say that Canada’s growth is projected to be strong compared to a group of recessionary European countries. He can no longer accurately put on positive spin on Canada’s mediocre economic performance by seeking out favourable international comparisons. At best, Canada is in the middle of the pack.




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We’re number… 15?

  1. Are we treating predictions as reality now?

    • No. We’re treating them as predictions.
      That doesn’t mean we treat them as non-existent.

  2. Yet another thing that our Dear Leader, Stevie Wonder, doesn’t tell the truth about. Like his ‘best in the G8′ boast of a year or so ago.

    • Yes, Harper has been lying all along about the economy.

      A couple of weeks before the 2011 election, the G&M came out with an article titled “We’re No. 10!” (According to a Conference Board of Canada international economic ranking.) Yet during the leaders debate, Harper said (no less than 10 times) “Canada has the strongest recovery on the planet.”

      If one compares GDP growth coming out of the 2009 recession, Canada was not even top of the G8. We had 3.2% and 2.5%. Germany had 3.7% and 3.0%.

      Harper has also lied about government debt saying we have the lowest among industrialized nations “by a country mile.” Again Canada doesn’t rank #1 among G7 countries. According to the IMF: Germany: 82%, UK: 83%, Canada: 85%, France 86%.

      Here’s how Canada actually ranks among other developed countries:

      * OECD productivity (2011): #17
      * OECD productivity growth (2011): #24
      * OECD government debt/GDP (IMF 2011): #25
      * OECD Unemployment rate (2012 Q1): #17
      * OECD GDP growth (2011 CIA): #14
      * OECD trade balance (IMF 2011): #24
      * Inequality-adjusted Human Development Index (2011): #12
      * Conference Board of Canada Economy Rankings (2011): #11
      * WEF Global Competitive Index (2012-2013): #14

      The OECD has 34 countries, including 31 developed nations.

      • And yet nobody calls him on it

        • The NDP are starting to call him on it. My guess Harper’s free ride on the economy is over…

          I think the Liberals really dropped the ball on this one in the last election. Harper was running ads saying his economic action plan turned Canada into an “economic star.” But The Economist article he quoted actually said, “Much of the country’s resilience stems from policies—such as bank regulation and sound public finances—which predate Mr Harper. ”

          Yet the Liberals said and did nothing.

          The fact was the Liberals owned the economy on three key issues: a) public finances; b) banking regulation; c) the stimulus package they forced on Harper (which Harper claimed brought about the “strongest economy on the planet.”) But they handed Harper the economy on a silver platter.

          I hope they learned their lesson. The economy may not be the most important issue among Liberal voters. Yet it is a strong issue and the most important among red Tories. When it comes to defeating the Conservatives, the Liberals need the moderate right-leaning vote.

          • Yeah, I don’t understand that. We had surpluses under the Libs, strong bank regs, we were playing down the debt….and the Cons blew it all, while the Libs said nothing.

            But then again, the Libs were the original free traders….and were then forced to be anti-free trade when Turner was in there.

          • When were the Liberals originally free-traders? At the turn of the 20th century? They were conspicuously non-free-traders during the post-war era. I think they negotiated the Auto Pact which is a good example of fair trade.

            In terms of success, free trade has so far been a dud, to say the least. GDP growth has steadily declined down to a trickle since bringing in free trade deals. Looks like more will make things worse not better.

            The economy is as complex as the weather. Simplistic ideology utterly fails to describe it…

  3. I can’t be bothered crunching the numbers (is there an easy way to see the growth forecast as a percentage?) but who’s forecast is the BEST? If a bunch of countries are predicted to grow by 3% or 4% then that’s something, but if the best is, say, 2.5%, well, is it that that big of a deal comparatively?

    • I did some brief research, after a similar article appeared a few weeks ago. I unfortunately don’t remember which links/websites I found, but my brief unscientific research showed three things:

      1- The top countries were at the top by huge margins. A country like South Korea wildly outpaced countries like the US or France. (However, these countries are usually emerging, or recently-developed economies.)

      2- The middle of the pack is generally very close together. So, if Canada is 15th with 2%, then there were 3 or 4 other countries slightly ahead at 2.1 or 2.2%, and 3 or 4 others slightly behind at 1.8 or 1.9%. The discrepancies between 10th and 15th (or heck, even 20th) place weren’t great. The difference is a lot more insignificant than a headline screaming out that we’re 15th.

      3- Emerging countries, and those with natural resources, did better than the average.

      Here’s a website from the IMF, showing the real GDP growth of countries, dated Oct 2012:

      http://www.imf.org/external/datamapper/index.php

      It’s a fun little map. The average of the “Advanced Economies” was 1.6, while Canada’s was 2.4. Fairly impressive, IMO, despite being ranked “only” 15th.

    • Good point. An economic recovery during the 1980s and 1990s would have GDP growth around 5%. Harper was boasting about GDP growth that amounted to one of the weakest recoveries since the Great Depression (3.2%, 2.5% in 2010-11.) He said “Canada has the strongest recovery on the planet” which was not only a lie, but a joke considering the anemic recovery.

      What’s worse is that Carney now considers 2.5% GDP growth to signify a full economic recovery. This is bad news on many fronts. For one job creation comes last in a recovery, meaning lack luster job creation. Second, debt is measured in debt/GDP. Therefore weak GDP growth means governments will have a harder time managing debt.

      One has to wonder if that is enough growth to sustain a recovery or will the economy peter out and fall back into recession… I think Carney is one of the world’s most overrated central bankers (he got most of the credit for saving Canada from a financial market meltdown, but this was actually due to the Liberals resisting disastrous American banking deregulation…)

  4. 1) Canada is reducing its deficit, and is running a much smaller deficit, unlike most other countries, which lowers economic growth.
    2) The BOC’s interest rate is 1%, which is 1% higher than the US FED, which lowers our growth rate with respect to the United States.
    3) Britain, Europe, the United States, and Japan are all engaging non-standard monetary tools (namely QE in one form or another). Canada is NOT. Which lowers our economic growth.

    Basically, Canada has been trying to extricate itself from the extraordinary measures undertaken to address the global economic crisis. Other countries still having are still injecting themselves with massive amounts of fiscal and monetary stimulus, from massive deficits, to near zero interests rates, and ongoing quantitative easing.

    Canada is still growing modestly, while normalizing its fiscal and monetary policies.

    • This seems reasonable to me (though I still think that there could be a danger in the government (read:Flaherty) being a little too rosy).

      Anyone want to make a cogent argument that this is wrong?

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