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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Bob
Bob
11 years ago

Here's an interesting article from Merril Lynch. http://canadianpress.google.com/article/ALeqM5iZK

Here's a response by Harper.

http://www.cbc.ca/canada/story/2008/09/24/canada-

john
john
11 years ago

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.

Crabman_
Crabman_
11 years ago

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

Brittanny
Brittanny
11 years ago

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.

Anonymous
Anonymous
11 years ago

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.

Anonymous
Anonymous
11 years ago

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.

patriotz
patriotz
11 years ago

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.

Time
Time
11 years ago

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.

Morally bankrupt
Morally bankrupt
11 years ago

People like thumbsucker2 think that this is all a game. It's just numbers and words. But words are powerful, and life is not a game. Numbers represent real money to real people, most of whom struggle in various ways. So thumbsucker2 or whoever you want to call yourself on a given day, take a good look in the mirror and ask yourself "Is this asshole really me?" Maybe it's time to change?

Anonymous
Anonymous
11 years ago

Apocalypse Now?: New world order could have devastating implications for Western nations

http://www.dailymail.co.uk/news/article-1058601/A

greed
greed
11 years ago

Not specifically related to Vancouver market, but Sydney Australia's market is almost a mirror image. Would be good if CBC would arrange a similar interview with decent, unbiased profs/experts to educate the public (although way too late) about this coming bust. Link is below:

http://www.abc.net.au/rn/counterpoint/stories/200

Anonymous
Anonymous
11 years ago

#46 read the date on comment May 20th, 2008 at 8:17 pm

Anonymous
Anonymous
11 years ago

Hey Thunbs:

What's up buddy? Someone's numbers bothering you?

Gadwin
Gadwin
11 years ago

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.

patriotz
patriotz
11 years ago

There was a recent case on eminent domain in the US that suggested that the ‘right to property’ codified in the constitution may not offer protections beyond those found in other anglo-american jurisdictions. Contrary to what a lot of people think, there is no "right to property" in the US Constitution. If you think there is a "right to property", try growing dope in your back yard and see what happens. What it actually says is this (Bill of Rights): "No person shall be… deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation" Which means that (1) the government can seize property as punishment for an offense and (2) the government can take private property for public use provided the owner is paid market value for… Read more »

ReductiMat
11 years ago

Fantastic post Gadwin. It's unfortunate that very few people will take the time to understand this.

One other point I think is a major player in all of this is outlined at The Big Picture.

Hindsight is 20/20
Hindsight is 20/20
11 years ago

Sold2Soon Says:

May 21st, 2008 at 9:13 am

Caught some of the exchange on CKNW this morning. “Booster-Bill” (as Warren labels him) begins incredulously: some are saying real-estate prices will go down “even here”… “especially here!” comes back Garth emphatically.

Some amazement on the longetivity of Harper’s government ensues till Bill comes back to comment on how after he built his home some years ago, his builder commented on how much more it would cost to build if he were to start then (prices of building materials have gone up). Garth replies things can change quickly…Rona profits are down 90%, Linen & Things has gone belly up and Home Depot is hurting.

Sadly, at that point my 15 minute commute was up and so was my access to the radio!

Timeless Stupidity
Timeless Stupidity
11 years ago

# 54 Thums up2 Says: May 20th, 2008 at 8:17 pm To The idiot in-charge, those numbers are not your personal property, you can publish them but if you comment on them that makes you to call some one’s whore you dum head. “Congratulation North Vancouver Prices are up-some time ago” To whom the fuck were you telling all that bs? “Excellent North Vancouver +3%” what the fuck was that? North Vancouver is 3% down oh now what to do? Mother fucking Realtors like you and jeff stand for best filthy idiots on earth.Tell us…. What do you tell to your client as buyers? what do you tell to your clients as sellers? if you know the answer in your mind, you and jeff should figure out properly who the fuck you are? you fucking filthy idiot.Did you ever talk… Read more »

dingus
dingus
11 years ago

"my understanding is that in Canada no private person actually owns anything, basically. It’s all property of the state. " "Think you own that house or condo? Think again, because in Canada, the Crown actually owns all the land. That mortgage you’re paying is just for a leasehold from the Crown." Whoa, nelly! If you own in fee simple, you own. Full stop. The state does not own anything. This is not the USSR. It is not a leasehold. The state cannot arbitrarily take the land back. There is a difference between ownership and having your own little empire, though. You do have to abide by the laws of the state, still. And there may be laws that permits the state to impair those ownership rights, and do things like trespass or expropriate. However, like Dave said, that is true… Read more »

Gadwin
Gadwin
11 years ago

Suppose that the entire world had another Great Depression. But that's not possible, is it? Well, suppose it did happen. Do you think Vancouver real estate will only decline by 50% if we had another Great Depression? Probably not. Vancouver real estate will probably decline by 70% or more if the unemployment rate in BC rivaled levels seen in the Great Depression and the BC & Canadian economy grinds to a halt as it did during the Great Depression. Now how could the global economy rival the Great Depression? In a nutshell, this is what the U.S. Treasury Department, U.S. Federal Reserve, and SEC tried to avoid by bailing out Bear Stearns, AIG, and is now proposing a $700 billion bailout package. Their biggest fear, is the unregulated Credit Default Swap market that has the potential to cause another Great… Read more »

Patiently Waiting
Patiently Waiting
11 years ago

Watching Bernanke and Paulson, made me think of a Ministry song I hadn't listened to in a while:

http://www.youtube.com/watch?v=dG_-rq1ON9Y

"Hey thanks for nothing!

Morals in the dust

Two-faced bastards and syncophants

No trust"

We Canadians shouldn't be too smug. Can the same thing happen here?

jesse
jesse
11 years ago

Two words: exprop riation. The needs of the many and all that Vulcan mumbo jumbo.

womp
11 years ago

There's also a separation of surface and subsurface rights. No landowner automatically has rights to subsurface resources – you must explicitly stake them, or else others will be able to snatch it right from under you, and gain legal access to your land. In BC, staking a claim for mineral or subsurface rights used to have to be done physically, with actual stakes and claim tags. This gave the landholder opportunity to come to an understanding with prospectors, as they would have to physically trespass to stake their claim otherwise.

Recently the BC government changed the staking process so that it could be done 100% online, without even setting foot on the property. This has led to some cases where homeowners get invaded by prospectors and have no real legal recourse.

Moral of the story – stake your own land!

Anonymous
Anonymous
11 years ago

Have to agree with Dave on this one. We inherited a system of land ownership from the UK, enforced (however unfairly) by musket and treaty over the existing aboriginal culture. Fee simple is a type of estate that the Crown can grant to individuals. In the traditional system, fee simple estates were subject to the power of eminent domain.

In that respect, you'd have to look at the empirical evidence to see whether the US offers more protection for property owners vis-a-vis expropriations by the State. There was a recent case on eminent domain in the US that suggested that the 'right to property' codified in the constitution may not offer protections beyond those found in other anglo-american jurisdictions. However, I lack any references to studies on the matter.

alexcanuck
alexcanuck
11 years ago

In contrast, in the US, this is less certain and historic owners may have claims on the ownership of the land.

Ahem. "First Nations". "Native Land Claims".