The federal government must take an activist role to counter financial crisis and stimulate economic investment, even if it means going into deficit, say more than 80 leading economists.
In an open letter released Wednesday, the mostly left-leaning analysts say there are "worrisome weaknesses" in the Canadian economy that have been laid bare by wider global troubles.
"Complacent expressions of faith in our 'fundamentals,' and other varieties of economic denial, will not protect Canadians from the coming storm," they warn.
That appeared to be a shot across the bow of Conservative Leader Stephen Harper, who has repeatedly assured voters that the economic fundamentals are strong and that Canada need not fear the kind of turmoil gripping the United States.
The letter is a product of the Progressive Economic Forum, a group that describes itself as promoting "alternatives to conservative economic theory and policy."
It was signed by 85 people, including forum chairman Marc Lee, noted consultant Arthur Donner, Mike McCracken, president of Informetrica Ltd., and a range of university economists.
The signatories also included two men with overtly political backgrounds — Doug Peters, a veteran federal Liberal and former junior minister of state for finance, and Rodrigue Tremblay, who served as Parti Québécois industry minister of Quebec in the 1970s.
It's the third open letter to be published in as many days as the federal election campaign comes down to the wire.
On Monday, some 230 academic economists spoke out in favour of a carbon tax as the best way to address climate change. On Tuesday, 120 leading climate scientists urged the public to vote "strategically" to protect the environment.
Both those interventions were welcomed by Liberal Leader Stéphane Dion and Green Leader Elizabeth May, who took them as helpful to their campaigns.
The economists who signed the latest letter cite a "deepening global financial crisis, the decline in world commodity prices and the growing possibility of global recession" as signals that Canadians can't ignore.
On the domestic front, they note that "macroeconomic performance has weakened dramatically" since the Conservatives took office in 2006.
They point to job losses in the manufacturing sector, stalled economic growth, declining productivity and heavy consumer debt.
Until now those problems have been masked by booming commodity prices and a housing bubble, but both those trends are ending, they say.
"The dramatic events of recent weeks have destroyed the idea that markets are best left to their own, unregulated devices," says the letter. "Government and its financial institutions must now show leadership and play a more active role."
The economists call for measures to stimulate investment and job-creation, including spending on infrastructure and projects to reduce greenhouse gas emissions, as well as initiatives to spur construction of affordable housing and ease the credit crunch.
They also say Ottawa must strengthen income-support programs, in particular by beefing up employment insurance.
They note the federal budget is barely in balance at this time and say there's a danger it could slip into deficit — but insist that would be preferable to doing nothing.
"It is far better to maintain public programs to support employment and incomes, even at the cost of a cyclical deficit."