Weak economy complicates Stephen Harper’s new agenda

OTTAWA—The recovery that never really happened will complicate Prime Minister Stephen Harper’s efforts to put a fresh look on his two-year-old majority government in next month’s throne speech.
 

Ever since the end of the global recession, the Harper government has been expecting economic conditions in Canada to bounce back to post-recession levels.
 

But, though Canada survived the world economy’s swan dive better than most other industrialized countries, domestic growth has fallen short of the expectations cited by Finance Minister Jim Flaherty every year since 2008.
 

To protect Canadians from the global recession, the Harper government in 2009 launched an unprecedented economic pump-priming exercise that has seen Ottawa trying to repair its financial picture — this year it faces an $18-billion deficit — ever since.
 

The Bank of Canada also pulled out all stops to encourage post-recession economic growth, keeping borrowing costs at an historic low for three years. But weak economic conditions in the United States and Europe have gone a long way to nullifying the central bank’s efforts as well.
 

The robust, 2.9 per cent economic growth that Canadians enjoyed the year before Harper moved into 24 Sussex now seems out of reach. In his 2012 budget, Flaherty cited predictions that Canada’s economy would reach 2.4 per cent expansion in 2013. But growth expectations this year have now been chopped to a mediocre 1.7-per cent range.
 

Unemployment, which stood at 6.6 per cent when the Conservatives took power, is now at 7.2 per cent, with 1.4 million out of work.
 

And the outlook is not upbeat as already-strapped consumers ease back on a spending spree that helped shore up the economy but at the same time ran up record levels of debt.

http://www.thestar.com/news/canada/2013/08/23/weak_economy_complicates_stephen_harpers_new_agenda.html