Campaigning through an economic minefield

Last Updated Sept. 7, 2008

By Christopher Waddell

Christopher Waddell is the first occupant of the Carty Chair in Business and Financial Journalism at Carleton University in Ottawa. Waddell has a Ph.D. in history from York University and has served as Parliamentary bureau chief for CBC Television news, a senior editor with the Financial Post, a reporter with the Report on Business, and as Ottawa bureau chief, associate editor and national editor for the Globe and Mail. He writes for CBC News Online on topics of interest in Canadian politics.

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It's time to throw the traditional links between economics and politics out the window.

Both the Conservatives and Liberals are embarking on revolutionary campaigns. By all normally understood rules of the relationship between the electorate and the economy, the two parties are happily choosing to saunter through a minefield.

For the Conservatives, the banner headline across the top of the front page of the London Free Press on Labour Day weekend was sobering. "Layoff anxiety worsens" tells a story that has largely escaped national media attention in its self-absorbed election frenzy.

The Free Press lists more than 3,500 manufacturing jobs lost in the London region alone in recent weeks and the communities — including Stratford, St. Thomas, St. Mary's — that are affected. Automotive parts production, for example, is now at 1996 levels.

The story doesn't even mention Guelph, where a federal byelection set for Sept. 8 will be short-circuited by the Conservative government's election call. The city's homegrown success story, Linamar Corp., Canada's second-largest autoparts maker, announced 800 layoffs on Aug. 28.

Southwestern Ontario is the heart of the region the Conservatives need to win if they hope to be re-elected with the prospect of turning their current minority into a majority, but a slowing economy should make that tougher.

The Liberals have set themselves a different challenge. Leader Stéphane Dion must persuade Canadians to vote for a new carbon tax they will pay, offset in part by income tax cuts, to benefit the environment and reduce greenhouse gas emissions. It's not the normal kind of tax policy parties campaign on.

Defying election gravity

So what is the likelihood either attempt to defy traditional election gravity will succeed?

Let's start with the Conservatives.

Stephen Harper has some things going for him. His electoral base in Western Canada is strong thanks to its booming energy and agricultural economies. As Statistics Canada reported last month, second quarter farm income almost doubled from the year before. Even a cooling of commodity prices will leave the west well off for the foreseeable future.

As well, the Conservative leader can argue plausibly that the manufacturing decline of Ontario isn't the result of his government's policies.

Central Canada is paying the price for high energy prices, delayed restructuring by manufacturers sheltered for too long by a low Canadian dollar and the growing fallout from what started as the subprime mortgage mess in the United States. There's no evidence that Canadians blame the Conservatives for any of those. For instance, despite all the media noise this year about high gasoline prices, the biggest surprise has been the lack of public demands for government action as gasoline hovered around $1.50 a litre.

The New Democrats and the union movement have tried to force the Conservatives to respond to the decline of the U.S. former Big Three automakers but there's no public pressure for that either. Ford, Chrysler and General Motors lost that battle for public support long ago. Just walk through any shopping centre parking lot and count the number of vehicles not made by them.

Conservative vulnerability

For Harper, "It's not my fault" isn't much of a campaign slogan, although the Conservatives will benefit from the lack of any credible high-profile Liberal spokesperson on economic issues. They also know the next U.S. administration will have to address a fiscal mess. The pain of dealing with that will inevitably hurt Canada as well, so better to have the election now.

The Conservatives are vulnerable, though, if campaign dynamics heighten demands for a federal response to the layoffs. To try to head that off, the Conservatives at the last minute announced cash for Ford but there’s not a lot of room to do much more without dipping into deficit. The tax cuts introduced over three Conservative budgets, even if Canadians did like the GST cuts, have almost eliminated the surplus, leaving little money for short-term economic support.

Interprovincial rivalries could also cause problems for Harper. The Conservatives must win more seats in Quebec as well as in Ontario. It's hard to imagine, for instance, that a rumoured federal contribution of up to $600 million to rebuild Montreal's port will play well in Ontario.

Dion has his own challenges and is getting no help from the environment itself.

A temperate summer in central Canada and the lack of extreme weather on any coast or in the usual forest fire hotspots have taken climate change concerns out of the daily lives and discussions of most Canadians.

Looking beyond the national media, commentary about the Liberal carbon tax plan has been largely negative. It has concentrated on the politics of the plan rather than its substance or the broader debate about how to respond to climate change. Last-minute tinkering with details of the program gives ammunition to criticism the plan wasn’t well thought-out in the first place.

As well, there has been no success for instance in highlighting how isolated Canada is on this issue. Canadians are living in blissful ignorance while climate change and carbon pricing are now central to public policy debates in much of the rest of the world.

Alone on climate change

Despite that, there are reasons to think Dion, like Harper, could defy traditional political thinking.

First, the Liberals have the climate change field to themselves. Trade union support for the New Democrats has left the party opposing the carbon tax, with a climate change policy that is apparently out of step with many of its traditional environmental backers.

The Green party is a marginal player on the issue. It won't be in a position to implement whatever it advocates and needs a miracle to win enough seats to be influential should the election produce another minority Parliament.

A focus on climate change in the U.S. presidential campaign could also help Dion by drawing public attention in Canada to the issue, where he has a clearly defined plan.

Dion's greatest asset, though, is the passion and conviction he brings to the climate change issue. There is no question that he believes in what he is advocating.

By comparison, it is hard to identify anything Harper believes in to the same depth. That's why pre-election Conservative television ads are trying to build empathy between the Conservative leader and middle-class voters, suggesting they share the same values.

The challenge for Dion is to maintain that passion and emotion through the ups and downs of a 36-day campaign. That's hard enough to do by itself let alone trying to use it to sell Canadians on complicated changes to the tax system, including using carbon tax revenue for social programs in an uncertain economy.

If the election simply produces another Conservative minority, the real surprise may be how little impact the economy, despite its troubles, ended up having on the outcome after all.