Another recession in store?

This past week, new figures were released by Statistics Canada that show we are on the verge of a new recession in this country.
The April GDP figures came in and they show the Canadian economy shrank for the fourth month in a row.
The definition of a “recession” is two-consecutive quarters of negative growth. With our economy shrinking in the first quarter of the year (January- March) by 0.6 percent, and again in the first month of the second quarter, the outlook is grim.
Given the terrible start to the year, many economists had expected a rebound in the second quarter, however this does not appear to be the case.
Oil and gas prices, of course, cramped investment and activity in the oilsands, but nearly other every sector of the economy (including finance, retail, construction, and manufacturing) shrank, as well.
This is very bad news, of course, but also clearly the product of the policy choices made by this Conservative government over the past decade.
Canada once had a healthy and diverse economy—fishing, farming, mining, manufacturing, finance, forestry, oil and gas extraction, tourism, and services—that was regionally balanced.
But then along came the Conservatives. It was Stephen Harper and his government who decided to pour $2 billion into the pockets of oil companies each and every year since 2006 to “encourage” them to develop the oilsands.
Dumping this money into the oil patch not only was not needed, but it also was money that could have helped the manufacturing sector deal with the high dollar.
It could have helped get the “Ring of Fire” off the ground by building the road and rail lines the project requires. It could have helped farmers hit by alternating floods and droughts.
It could have helped the forestry sector deal with unfair subsidies provided to their competitors in the U.S. by their governments.
It could have done a lot to help keep our economy healthy and diversified, but the Conservatives just kept pumping our cash into the oilsands, where it was needed the least.
As a result of these choices, many sectors of our economy struggled and our national economic growth became completely dependent upon the price of oil.
For our part, New Democrats consistently called upon the federal government to help these ailing sectors survive. We asked for a national strategy to help the forestry and manufacturing sectors because they were exporters who were particularly sensitive the value of the dollar, which soared with the price of oil.
We also pressed the Conservatives to end the ridiculous $2 billion in subsidies to the oil companies since they are among the richest companies in the world.
Why were we giving tax dollars to the most profitable companies operating in just one or two provinces while dozens of other companies that were struggling in every province were left to fend for themselves, and to eventually close up shop and move to another country?
These choices made no sense economically. But as long as the oil sector was booming, no one in this government seemed to notice and/or care. How times have changed.
The people of Alberta, of course, have been particularly hard hit by the collapse of oil prices and weak growth this year. Massive job losses in the oil patch are leading to declining wealth, declining home prices, and declining net worth, and causing huge provincial deficits thanks to lower tax revenue and poor spending choices by a tired Conservative government.
Albertans faced a stark choice this past May: continue down the same “boom or bust” path towards more debt and less wealth, or change things up and find a more stable, fair, and predictable economic path moving forward.
Based on the latest economic data, it seems all Canadians will face a similar decision come October.

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