Adding insult to injury, the leader of the Liberals, former Harvard professor Michael Ignatieff, failed to win his own seat and was sent unceremoniously into political retirement. This shift in political climate becomes all the more striking when viewed against the political developments that had been taking place concurrently in the rest of the developed world. For a country where an openly avowed socialist party regularly polls in the top three in provincial and federal elections, this is no small feat.
This victory was underscored by the humiliating decline of the Liberals — the country's "natural governing party" — who were displaced by a radical fringe party in their office of Official Opposition in the Canadian House of Commons. Adding insult to injury, the leader of the Liberals, former Harvard professor Michael Ignatieff, failed to win his own seat and was sent unceremoniously into political retirement.
The May 2 triumph of the Conservative Party in Canada's federal election marks a dramatic climax to what has been an unlikely course of political events in a country whose very identity had been inextricably tied to its reputation for being a Liberal stronghold.
This shift in political climate becomes all the more striking when viewed against the political developments that had been taking place concurrently in the rest of the developed world. As Republicans and Democrats pushed America further and further to the left and Europe approached ever closer to its socialist ideals, Canada's political discussion turned from which party could offer the greatest subsidies to the greatest number, to which party's program of tax cuts would be of more benefit to the economy.
For a country where an openly avowed socialist party regularly polls in the top three in provincial and federal elections, this is no small feat.
For perhaps the first time in its history, Canada finds itself at the most pro-market limit of the political spectrum among the world's industrialized nations.
It is not only in this regard that Canada has become an island unto its own. Equally unique to the country is its economic performance subsequent to the financial crisis of and throughout the ensuing alternations between recession and stagnation that has characterized the experience of the greater part of the developed world since.
As the world teeters from crisis to crisis, Canada has proven remarkably resilient in spite of its heavy economic dependence on international trade. Whether there is any significance to the coincidence of these two anomalies will be examined in what is to follow.
By no means is this piece to be taken as an unqualified endorsement of the policies undertaken by the incumbent administration. Despite the overall tenor of the article, this piece could have just as easily been scathing indictment as commendation.
The appraisal to be made varies directly with the choice of benchmark. Measured against examples that more closely approximate the free-market ideal such as s-era Hong Kong and Jacksonian America, Canada falls hopelessly short.
But take the broad index of industrialized countries as a point of reference, and few will debate the strength of Canada's record. It is only in this latter context that anything in the present article is to be taken as a voucher for Canadian economic performance and it is only against the policies of the countries thus referenced that Canadian policy is being demonstrated to be superior.
Performance That Canada has fared considerably better than the balance of countries hit by the financial crisis is commonly accepted. As noted in The Economistby Canada had already been well into recovery from one of its mildest recessions on record while the rest of the developed world was struggling to keep from plunging headlong into economic chaos.
The situation in Europe need hardly be recounted. Now, Statistics Canada reports that the economy added net 7, jobs over the past month, following increases of 28, in June; 22, in May; and 58, in April, and has effectively recouped all the job losses sustained since the beginning of the financial crisis.
In a recent Bank of Canada survey, businesses reported the highest hiring expectations on record amid broad optimism about future demand. A quarter of the Canadian businesses that responded are facing labor shortages. Respondents also indicated plans to increase investment spending — a factor critical to economic productivity that is far too often overlooked in the misguided obsession over consumer spending.
By any conventional metric, Canada's economic performance can thus be demonstrated to have surpassed those of its peers during and subsequent to the recession.
Policy To the extent that economic outcomes are determined by the actions of market participants, and are not exclusively the result of factors beyond their control, it is reasonable to assume that a large proportion of any differences in outcome between two given economies can be explained by the different courses of action pursued by the largest market player in each respective economy, which in virtually all cases is the government.
Having established Canada's economic strength, it is thus well to review the record of government policy in Canada and the ways in which it differed from policy in other developed countries in order to discover the source of Canada's outperformance.
All recessions in Canada since occurred at the same time as the economy of the United States experienced a recession, showing that the two economies are highly synchronized (see Canada-US Economic Relations). However, the extent of a recession in Canada is determined by many factors, depending on which parts of the economy are in decline. It took four years after the recession began for the labour market to recover; three years after the recession, and two years (for both GDP and jobs) to recuperate in the past recession. From August through April , U.S. non-petroleum real imports and exports fell about 27 percent, a much more pronounced drop than occurred in production (Alessandria, Kaboski, and Midrigan, ).
Beginning with the more immediate causes of the divergence in trajectory between the Canadian economy and the others, a logical starting point would be to contrast Canada's response to the financial crisis of with those of its peers.
Sharing the same prospect of economic havoc with the rest of the developed world in the face of the largest financial collapse in recent history, what is unique to Canadian policy during that period lies in the design and execution of its stimulus plan.
While the United States rose to the occasion with their monolithic trillion-dollar stimulus package and the rest of the world followed suit, Canada, as noted by many opponents of the ruling party at the timeall but sat idly by, and what little it did in the way of spending did nothing to contribute to its aversion of disaster, as demonstrated by the Fraser Institute.
All it [did was] cut. As Canada's leading left-leaning policy think tank, the Canadian Centre for Policy Alternatives quite cogently pointed out, the government's stimulus package was "only one quarter the size of the U. In effect it was little more than a clever display of political gamesmanship whereby the appearance of action was maximized, while the action itself was minimized in order to control the damage the stimulus would cause while absolving itself of any culpability in the event of any externally induced shocks.As the world emerged from the – financial and economic crisis, Bill Gross, until recently Pimco’s legendary head of the world’s largest bond fund, U.S.
|Featured Links||Comments In the cacophony of daily news, a useful new analysis has put the recession in historical context:|
|Five years after the financial crisis, Canada’s recovery remains mixed - The Globe and Mail||Comments Five years ago this week, Lehman Brothers collapsed, sparking a global financial crisis and a seven-month recession in Canada.|
|Search Mises Daily||Last Edited October 24, The global financial crisis that began in dragged much of the world economy into recession, and Canada was not spared.|
|How Canada Escaped the Global Recession||As active stakeholders in the Quebec and Canadian economies, you are at the centre of the economic life of the country. Barely three years ago, the financial crisis was a source of major concern worldwide.|
Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound. Business Economics 49, 2. 3.
Is Slow Growth the New Normal for Canada?. The Great Recession was the sharp decline in economic activity during the late s and is considered the largest downturn since the Great Depression.
and the ensuing global recession in They find that back in November , shortly after the onset of the financial crisis, roughly 13 percent of households were in distress and that this fraction increased rapidly by June to about 17 percent where it has remained.
It took four years after the recession began for the labour market to recover; three years after the recession, and two years (for both GDP and jobs) to recuperate in the past recession. All recessions in Canada since occurred at the same time as the economy of the United States experienced a recession, showing that the two economies are highly synchronized (see Canada-US Economic Relations).
However, the extent of a recession in Canada is determined by many factors, depending on which parts of the economy are in decline.
The amount of remittances dropped to $25 billion in , the first decline since the Central Bank of Mexico started keeping track 14 years ago.
In the first nine months of , the Bank reports.