OTTAWA — If it’s still the economy, stupid, this might be a smart time for Stephen Harper to call a spring election.
Expect ballot-box fever to climb a few degrees Monday when MPs return to Ottawa from their extended Christmas break, but analysts point out there are only two good reasons to pull the plug before the completion of a government’s mandate.
The first is the expectation of a substantial pickup of seats for the party triggering it, and the second that things will only get worse by waiting.
With polls showing the first is unlikely for any of the parties, the prime minister has been adamant in saying he does not want a vote — although he has done his best to sow the seeds for one, flooding the airwaves with attack ads and sending out his troops on stump-style announcement stops.
But the second condition may persuade Harper that this spring is preferable to the next, particularly as October’s mandated provincial election in Ontario likely precludes a fall campaign on the federal side.
Pollster Allan Gregg of Harris/Decima says the economy remains uppermost in voters’ minds, and this spring may be the most advantageous time for Harper to campaign on bread-and-butter issues.
Gregg admits the logic appears counter-intuitive, since only two-and-a-half years ago the prime minister was in mid-campaign assuring Canadians not to worry about a recession — at the precise moment the country was falling into one.
But polls have been consistent in showing Canadians don’t blame the government for what felled the economy. In fact, those polls show voters trust Harper more than any opposition leader by a wide margin to manage the crisis.
“Most people are saying, ’Financially I’m pretty well off, but I dodged a bullet in the last two years, so now is not the time to do anything stupid or imprudent,”’ Gregg explained.
“This worked very positively for (Premier) Gordon Campbell in British Columbia, and whatever Harper’s failings, voters do believe he possesses the qualities to assume that office, that he’s competent, that he’s a good manager, and that he knows something about the economy.”
Even so, the argument for waiting until spring of next year is pretty straightforward if not compelling, says TD Bank chief economist Craig Alexander.
“The Canadian economy will be on much stronger footing, unemployment will be much lower,” he says. As well, the recovery — barring unforeseen events — will have sunk deeper roots with a bigger participation from the private sector.
According to the Bank of Canada, the economy will expand 2.4 per cent throughout this year and by spring 2012 will be on its way toward even more robust growth. Most economists see the unemployment rate edging lower to the seven per cent level by the end of this year, from the current 7.6 per cent.
Fiscally, the bad memory of the record $55.6 billion deficit in 2009 will have lost some of its sting, and Finance Minister Jim Flaherty will likely be able to table a budget showing the upcoming deficit nearing $20 billion.
That should make Canadians feel a lot better about themselves, their economic security and their prospects. And that may be the trouble.
“In good times, what people look for is, ’Who do I like most’ — and that’s Harper’s weakness because there’s not much affection for him,” said Gregg.
In bad times it’s, ’Who do I trust to get me out of this,’ he added. “Harper is on good ground to say the economy is still fragile and now is not the time to fool with an unproven pointy-head academic.”
Economists say another reason an early election may be wise is that the narrative the Conservatives have spun about having steered the country to the softest landing in the G7 during the recession and the biggest bounce during the recovery may be wearing thin.
Friday’s news that — contrary to what Canadians have been repeatedly told since August — the country has not as yet recouped all the jobs it lost during the recession takes some wind from the government’s sails.
But perhaps more important, says Scotiabank economist Derek Holt, is that Canada will look increasingly less stellar compared to the G7 and particularly the U.S. as the year drags on.
On Monday, Statistics Canada is expected to announce the economy expanded at about two per cent in the final quarter of 2010, well below the U.S.’s 3.2 per cent advance reported Friday.
Even the Bank of Canada, which at one time had been bullish on Canadian growth versus its souther neighbour, believes the U.S. will outpace Canada by almost a full percentage point this year.
There are legitimate counter-arguments the Conservatives can and will make. Canada didn’t fall as far and hence doesn’t need as big a bounce, for instance. As well, Canada may not be growing as fast by the time 2012 rolls around, but its overall position will likely still be superior.
But those explanations are likely too complex for a campaign sound-bite, as former prime minister Kim Campbell once remarked, and certainly not as persuasive as being able to shout, we’re number one.
In terms of growth in the spring of 2012, Holt says, the government may only be able to claim Canada is number three, behind the U.S. and likely Germany.
And that is assuming everything goes according to forecasts, adds Bank of Montreal economist Douglas Porter.
Canada has enjoyed solid if unspectacular growth since the fall of 2009, and job creation since July of the same year. That is still an enviable record to run on, considering the still fresh woes in America and much of Europe.
“There are always dangers out there, we are still dealing with some pretty serious risk globally,” Porter points out, “so a bird in the hand may be better than two in the bush.”