Canadians think the country is in recession, according to a new poll, and a majority supports the idea of the federal government running a deficit to stimulate the economy.
The new Nanos Research poll sheds light on a debate that sprang to the forefront of the election campaign amid this week’s market turmoil, as Conservative Leader Stephen Harper and the NDP’s Thomas Mulcair pledged they would not run a deficit, while Liberal Leader Justin Trudeau refused to guarantee a balanced budget.
But the poll also shows that voters are split on whom to trust to manage the economy, as Mr. Harper’s edge on that score appears to be eroding.
There’s little doubt that the economy will be at the top of Canadians’ minds during the campaign, and they have a dark assessment of how it is performing: 79 per cent say they agree, or somewhat agree, that Canada is in a recession.
And they lean to an interventionist response, rather than battening down the hatches: 54 per cent say they either “support” or “somewhat support” a new round of deficit spending by the federal government to stimulate the economy. That’s compared with 36 per cent who say they oppose it, while 10 per cent are unsure.
That suggests that it’s Mr. Trudeau whose position is in sync with the majority’s mood. The Liberal Leader has refused to rule out running a deficit, arguing he’ll have to see the extent of the “mess” the Conservatives have left in the public finances.
It is the NDP, traditionally to the left of the Liberals, who have launched the most blistering attacks on Mr. Trudeau for opening the door to running a deficit. Under Mr. Mulcair, the New Democrats have sought to allay concerns about their economic policies by insisting they will balance the books, despite the slowdown in the economy.
That has led to sharp orange-versus-red rhetoric this week. The NDP’s Andrew Thomson, a former Saskatchewan finance minister running in Toronto’s Eglinton-Lawrence, argued Mr. Trudeau has been inconsistent on balancing the budget, showing he’s “not up to the job.” The Liberals charged the NDP has taken an “austerity pledge” that would make it impossible for the party to live up to its promises on child care or transit.
Mr. Harper, meanwhile, has charged that both of the “other guys” would run the country into debt – though his opponents counter that his government has posted seven straight deficits and many economists now believe the current budget, presented as balanced, has been knocked into the red, too.
Despite the hot rhetoric, there’s no sign so far that any party’s plans would lead to a near-term bottom line that is, in economic terms, substantially different than the others – whether it is a small surplus or small deficit.
Yet some economists suggest it is time to risk a deficit. BMO Financial Group vice-chair Kevin Lynch, the former head of the civil service under Mr. Harper and deputy finance minister under Liberal Paul Martin, wrote in The Globe and Mail Wednesday that it is time for the government to use its fiscal levers to stimulate the economy, notably with infrastructure spending on things such as transportation, ports, public transit and basic research.
There are, however, still political risks in embracing deficit spending, because opponents use it as an admission of fiscal indiscipline – a knock on economic competence. All three major parties are now fighting to be seen as best on that score, and although Mr. Harper has made economic management the focus of his political brand, his opponents now rival him for economic competence in the eyes of voters, according to the Nanos poll.
On one measure of economic prowess, Mr. Harper’s Conservatives remain on top: More Canadians pick them as the best party to manage the economy. But it is only a slight edge. Thirty per cent chose the Conservatives as the party with the best program to manage the economy, just ahead of the NDP (26 per cent) and Liberals (25 per cent.)
But only 28 per cent of Canadians believe that re-electing Mr. Harper’s Conservatives will have a positive or somewhat positive impact on the economy. That’s down from 32 per cent in July.
More Canadians think Mr. Mulcair and Mr. Trudeau would have a positive impact on the economy – 43 per cent in each case.
The Nanos Research survey of 1,000 Canadians was conducted both by telephone and online between Aug. 20 and 23. The margin of error for a random survey of that size is 3.1 percentage points, 19 times out of 20.Report Typo/Error