World Economy

Canada Careens Toward Recession

Canada Careens Toward RecessionCanada Careens Toward Recession

With the economy looming large in an election campaign only days away, the likelihood that Canada has fallen into a recession deepened Friday with news of below-zero growth for the fifth consecutive month in May.

It was the latest in a string of bad economic results for Prime Minister Stephen Harper, who will be asking Canadians to pass judgment on his record in a national vote on Oct. 19, Yahoo News reported.

A recession is usually defined as six consecutive months of below-zero economic growth, and the NDP and Liberals have seized on the long stretch of recession-like conditions to accuse the government of mismanaging its most important file—the economy.

“The economy is suffering and Stephen Harper’s government is more concerned about wasting taxpayers’ money with an early election call,” NDP finance critic Nathan Cullen said. He was referring to expectations Harper will on Sunday officially launch the Oct. 19 election, setting in motion a longer-than-usual campaign that will likely cost Canada tens of millions of dollars more than the estimated $375 million.

“The Conservatives’ poor economic record is proof that their priorities aren’t in the right place,” Cullen added.

Word from Statistics Canada that economic output fell by 0.2% in May is part of a drastically changing picture caused by the oil-price slump. The Bank of Canada has halved its growth projection and Parliamentary Budget Officer Jean-Denis Frechette has concluded the federal government is unlikely to achieve its long-promised goal of balancing Ottawa’s books in 2015.

Harper has acknowledged Canada is in an economic “downturn” as a result of the slump in the global economy. But he has brushed aside the PBO conclusion about a likely budget deficit in 2015.