Stephen Harper and his Conservatives bill themselves as astute managers of the national economy. It's a flattering self-image, but does it have the additional virtue of being true? Let's grade the Tories based on three tests designed to separate economic stars from also-rans.
Are they better than their predecessors?
The most obvious way to measure Mr. Harper's prosperity-creating prowess is to compare him to the people who came before him.
By that standard, he lags badly. Gross domestic product has grown at a 1.6-per-cent-a-year clip on his watch, far below the pace set by every other post-Second World War Prime Minister.
The economy expanded at a 2.9-per-cent rate under Paul Martin, at 3.5 per cent under Jean Chrétien and at 2.3 per cent under Brian Mulroney, according to Unifor economists Jim Stanford and Jordan Brennan. The champions among prime ministers were Lester Pearson and Louis St. Laurent, who both achieved a 5.4-per-cent growth rate.
Are they better than their counterparts elsewhere?
Conservatives argue it's unfair to compare Mr. Harper's track record to those of his predecessors because a global financial crisis erupted on his watch. That's a reasonable point. So we should also examine how Canada has performed versus other countries facing the same calamity.
On that score, Mr. Harper looks somewhat better. Canada didn't suffer the same level of economic distress as many other developed countries during the financial crisis or its immediate aftermath. Strong demand from China for oil and other resources helped buoy the economy, while the housing market slowed briefly but didn't collapse as it did in several other countries.
However, it's hard to discern any special economic mojo in the Conservatives' recent record. Between 2012 and 2014, Canada's cumulative GDP growth was substantially better than troubled euro-zone countries such as France and Italy, but it lagged slightly behind that of Australia, another resource-rich developed country, and was pretty much in line with the United States, according to World Bank statistics.
The trend is not encouraging. Statistics Canada announced on Friday that GDP contracted in May, the fifth consecutive monthly decline. It now seems nearly certain that Canada suffered at least a mild, technical recession in the first half of this year.
Meanwhile, Canada's jobless rate stands at 6.8 per cent, according to the Organization for Economic Co-operation and Development's harmonized unemployment statistics, which define joblessness in a consistent manner across countries. Our employment picture is better than the situation in France or Italy, but it's worse than in the U.S., Britain, Australia, Germany and Japan.
Call this a draw for Mr. Harper. In comparison to other countries, Canada's economic performance in recent years has been neither disaster nor bonanza. Mediocre about sums it up.
Are they better than their rhetoric?
Yet another way to gauge the track record of the Harper Conservatives is to compare them to their own agenda. While priorities have shifted since Mr. Harper became Prime Minister in February, 2006, the party has always been vocally in favour of smaller government, balanced budgets, debt reduction and lower taxes.
The reality in some of those areas has fallen far short of the rhetoric. According to figures compiled by Royal Bank's economics department, the federal government was spending 12.5 to 13.5 per cent of GDP on program expenses in the years before Mr. Harper came to power. In 2013-14, after years of Conservative management, it was spending – hold your hat – 13.1 per cent, right in line with its predecessors.
Similarly, the federal government's net debt-to-GDP ratio has barely budged. It stood at 34.1 per cent before Mr. Harper became Prime Minister; it now hovers around 32 per cent.
Given the surprise blow from the financial crisis and the need to deliver financial stimulus, this lack of action on the debt is understandable. Still, the Conservatives delivered seven budget deficits in a row from 2008 to 2014, not exactly the stuff of legend from the point of a fiscal conservative.
More impressive is Mr. Harper's record in cutting taxes. Mostly as a result of trimming the GST rate and reducing personal tax rates (not to mention a passel of special tax credits for everything from volunteer fire departments to children's arts programs), the Conservatives have managed to throttle back Ottawa's revenues from about 16 per cent of GDP to roughly 14 per cent. That is the lowest level in decades.
The bottom line
If you want a tax fighter, Mr. Harper is your man, but if strong management means a rapidly expanding economy and low unemployment, he falls short. His government benefited from the boom created by high oil and commodity prices. Now it's feeling the pain as the resources supercycle crashes to earth.
One important test of his leadership remains open. Under Mr. Harper's watch, home prices and household debt soared. To be sure, both trends were in place before he became Prime Minister, but he has done little to reverse their epic arc. Until it's clear how Canada's frothy housing market will resolve itself, the fairest grade for Mr. Harper remains "incomplete."