Economy the key issue in this election?
For the first time in a long time it looks like the economy may be the top issue in this election. With big price increases in food and fuel, house and condo prices dropping, unemployment edging up and incomes stagnant (except for public service executives) more and more Canadian voters are looking for answers and comfort in times of increasing economic uncertainty.
Strangely enough, most Canadians were feeling pretty good about the economy until the summer, even with a severe downturn in the U.S. battering some key Canadian industries.
While big manufacturing industries like automakers and lumber mills have felt a brutal squeeze as U.S. consumers slashed purchases of homes and cars, other parts of the economy picked up the slack because Canadians kept on spending.
They could do this largely because prices remained sky-high for Canada’s resource exports — petroleum above all, but also things like metals, coal and potash, a key component in fertilizers. There was also a boom in the value of grain and other agricultural commodities.
As a result, the cash flowing in from trade kept Canada’s domestic economy much stronger than the GDP numbers suggested. True, manufacturing slashed 67,300 jobs in the 12 months ending in August, but even so, total employment grew by 224,000 jobs in this period, thanks to gains in areas like construction, professions and services.
However, the looming problem for the Harper government was that the gusher of money from exports of high-priced resources tapered off as oil, grains and other products dropped in value by late in the summer. Yet many Canadians continued to feel the lingering impact of food and fuel inflation.
By July, job creation had stalled and gone into reverse, leaving unemployment a little higher than it was last winter. At the same time, July’s inflation rate, at 3.4 per cent, was the highest in five years.
Are you concerned about inflation / deflation / stagflation and is the economy a key issue for you in this election? Do you think that any Canadian politician has the ability to improve our economy while our largest trading partner is going through major financial difficulties of its own and facing ongoing fallout from a burst housing bubble?
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September 24th, 2008 at 11:29 am
Here’s an interesting article from Merril Lynch. http://canadianpress.google.co.....70ArlP703g
Here’s a response by Harper.
http://www.cbc.ca/canada/story.....using.html
September 24th, 2008 at 8:46 am
I’ve said it before and I’ll say it again. BC’s economy is in tip top shape and it’s because of the beach, the rain and rich asians. Condos have a big part to play in the booming BC economy too. Just drive out to the Okanagan and have some wine. We’ve got salmon and crab too. It’s the best place on earth and the economy knows it.
September 24th, 2008 at 7:59 am
Do you think that the canuck real estate bubble is smaller than the US?
No. From The Globe and Mail:
The ratio of house prices to rents is now 25 per cent above the average. The ratio of house prices to incomes is also a troubling statistic: It is now about 4:1, meaning that the average house price is four-times the average household’s annual income. During the previous cyclical peak, in 1989, the ratio topped out at 3.2:1. Even more troubling, the U.S. market topped out at 3.9:1 in 2006, just before doom set in.
RBC has the affordability of major Canadian markets since 1985 here. The following cities have record low affordability:
Saint John
Halifax
Saskatoon
Calgary
Edmonton
Vancouver
Victoria
September 23rd, 2008 at 10:49 pm
Friend of mine just got laid off who works for a company that makes large trucks for the construction industry. They were making 40 trucks a month. Now making 1 a month.
Just sayin.
September 23rd, 2008 at 10:25 pm
thanks patriotz, I didn’t have time to look up the issue of property rights in the US.
Once again, it would be interesting to have some data to compare the two jurisdictions. Alas.
September 23rd, 2008 at 9:56 pm
Gadwin said: Thanks ReductiMat. I wrote most of that post, except for the cited quotes and references. I’m surprised nobody is talking about Credit Default Swaps yet.
Not a big deal though. In time, everybody will learn and will be discussing Credit Default Swaps.
Gadwin, you are ahead of your time.
September 23rd, 2008 at 9:42 pm
From the link in #49:
For the past 25 years we have lived through a glorious party.
We have all — governments, companies, banks and, of course, consumers — lived beyond our means and are paying the price.
There it is in a nutshell. The party is over. And nowhere has the party been more excessive than in BC.
Gordo’s “golden decade” is going to end in the hangover of a lifetime. Think the 80’s were bad? This is going to be a lot worse.
September 23rd, 2008 at 9:33 pm
Economy the key issue in this election?
*Approved immune system*Economy is not bad here *Unemployement rates are more than 30 year low*Child benefits are up*Income tax is down*Student loan is down/*Cdn university to offer free tuition for top students *Gst is down by 2%*Tax rebate for first time buyers is up*Increased amount of basic personal income /*save more by sharing with spouse*Interest rates are low.
When real estate bears complain about insane prices the above bundel is a relief for common people,I am not restricted to any political party but you can read the election result from the bundel above.
And oye that is my opinion so please do not yell at me like angry bear.