The numbers for the first 3 months of 2008 are in, and they've sent a chill through the economic sector. Generally economists had expected a minuscule first quarter growth of just under one/half of one percent.
What Statistics Canada reports instead is negative growth of about one/tenth of one percent. It is the first time Canada's economy has contracted in five years. If weak or weaker readings occur in the 2nd quarter which ends on June 30, ours will be an economy officially in Recession! No wonder then that today's "Ottawa Sun" web-poll suggests 70% of readers think Canada is headed in that very direction despite the best assurances of the Federal Finance Minister, Jim Flaherty.
Mr. Flaherty says the economic fundamentals are strong and in his view the country's troubled automotive and forest sectors which are blamed for the first-quarter losses will improve. New car sales in Canada are setting a record pace, but in the USA where the numbers really matter, auto sales are expected to dip by 2-million units this year from 2007. Ontario's massive manufacturing sector, Canada's growth engine, is fuelled by the American automakers.
In the latest "Mood Of The Nation" survey carried out by Harris-Decima in the third week of May about 57% of Canadians felt the Government of Prime-Minister Stephen Harper could be doing a better job on economic growth..and that was before this week's StatsCan negative numbers.
A Recession and perhaps its resulting dip back into deficit financing for the government is the ruling Conservatives' biggest threat going into the next several months. It could also be the opposition's best chance at forcing an election...that is if the Federal Liberal's moribund leadership can rise to the challenge.
The public's overall satisfaction with the government's integrity, accountability and the aforementioned economic stewardship of the country shows a drop of about 13% for Mr. Harper's forces in the last 4 months. Those numbers were surveyed before the firing of the blunder prone Foreign Affairs Minister, Maxime Bernier, on Monday, May 26.
Most Liberal leadership hopefuls in waiting have now sheathed their daggers. We may be witnessing the development of the Party's "perfect storm" against the government. Despite a strong cadre of front benchers, Bob Ray, Michael Ignatieff, Ralph Goodale to buttress the attack: I sense that many Canadians remain sceptical about Stephane Dion's leadership abilities.
Despite the current rocky status of our ship-of-state, now back from Europe and surely at the helm, I'll bet the Prime Minister will be mounting a number of vigorous initiatives, including a mid-summer course correcting Cabinet shuffle, to even the odds. The Conservative minority government's survival is in jeopardy until the economy, here and down south of our border, begins to show signs of improving. The Americans are paying attention, but until they settle their bitter Presidential election in late fall, Canada may be left on its own to fight-off the evils of a recession. This has the potential to lead to a long sweltering summer of home grown discontent.