Shock decline in Canada’s GDP reveals how Trudeau has weakened and hollowed out the Canadian economy, creating an opening for both the Conservatives & NDP as Trudeau’s policies are discredited.
Already reeling from a backlash against his vanity election, his willingness to divide the country, and his rampant dishonesty, the Trudeau Liberals are facing a much closer election than they expected.
The debacle in Afghanistan – with many Canadian Citizens and those who helped Canada still trapped in the country after being abandoned by the Liberal government – has also led many Canadians to appreciate the importance of serious, competent leadership, something Justin Trudeau clearly doesn’t provide.
As a result, a big Liberal lead in the polls over a Conservative Party that once seemed to be collapsing, has now turned into a neck and neck race, with some surveys even showing the CPC well out in front.
Trudeau had certainly intended to campaign on the COVID response and the economy.
While he has failed miserably on both – having downplayed COVID early when it could have been mitigated outside our borders and then restricting the rights of Canadians while flights full of infected people kept entering our country – and having run up massive amounts of debt even before the crisis, Trudeau and the Liberals seem to have believed the massive amounts of money they’re spreading around would keep their popularity high and keep the economy growing.
After all, it is usually possible to increase GDP temporarily by injecting a bunch of government money into the economy, something that governments love to do ahead of an election, since the inevitable decline, and the consequences of running up debt, are often only realized after people have voted.
Yet, in a massive and shocking miss by economists, Canada’s economy actually shrank in Q2, with GDP down a full 1.1% between April & June.
Economists had predicted GDP growth of 2.5% in that time.
Here’s what BNN Bloomberg said about it:
“Adding to the disappointment, economic growth fell a further 0.4 per cent in July, according to a preliminary estimate.
It’s a worse-than-expected result that may prompt analysts to reconsider how quickly the nation’s economy will be able to fully recover from the pandemic, heightening worries about growth just as the country braces for a fourth wave of Covid-19 cases. Bank of Montreal economists immediately cut their forecasts for 2021 growth, while the Canadian dollar fell.
“It seems that the Canadian economy wasn’t on as strong a footing as we had believed,” said Royce Mendes, an economist at Canadian Imperial Bank of Commerce. “
They also note the political implications:
“The GDP report is also poised to become an election issue, potentially opening Prime Minister Justin Trudeau’s economic record to criticism and fueling demands for more government spending. Canadians are headed to the polls Sept. 20.
“This could change the tenor of the campaign,” Andrew Kelvin, senior Canada rates strategist Toronto-Dominion Bank, told BNN Bloomberg television. He said the figures “would raise the possibility that we could see more promises of fiscal stimulus in the latter days of the campaign.””
Personally, I think these numbers could have the opposite effect. Rather than calling for even more spending, many Canadians will look at the massive government spending we’ve already seen from Trudeau and conclude that a return to lower tax rates and more restrained government spending is what our country needs to actually generate real private sector growth.
Just as likely, this shock economic decline will boost both the Conservatives & NDP, for very different reasons.
Voters who stuck with the Liberals due to some sort of perceived strength on the economy will now look for alternatives, having seen that Trudeau’s policies have resulted in failure.
Some will move to the right, seeking lower taxes and lower government spending.
Others will move to the left, seeking even greater state spending, something the NDP provide.
Both the CPC & NDP have the advantage of being untainted by the perception of corruption that surrounds the Trudeau Liberals, as Trudeau is seen as favouring the well-connected elites over the Canadian People when it comes to the economy, and how the government acts overall.
Canada’s economic decline could deepen Trudeau’s trust woes
Beyond the economic numbers, Canada’s economic decline also demonstrates Justin Trudeau’s dishonesty.
He has been repeatedly claiming his economic approach will work, and attacked both the Conservatives and NDP on the economy.
Yet, all of his claims and all his words on the economy are revealed as empty and dishonest.
Turns out, his approach isn’t working.
Turns out, his high-tax, elitist-driven, massive spending, massive debt scheme isn’t even resulting in growth, as our economy falls.
Just like everything else he says, Trudeau’s message on the economy has been revealed as false, a lie designed to try and gain power.
Poilievre rips Trudeau’s economic failure
On Twitter, Conservative MP Pierre Poilievre – who has long been warning of the danger of Trudeau’s economic policies, commented on these latest numbers:
“BREAKING: GDP shrinks in 2nd quarter as deficit spending weights down the economy.
Trudeau said the economy would come “roaring back”. Instead it’s snoring back.
Time to unleash free enterprise to move from debts to paychecks.”
BREAKING: GDP shrinks in 2nd quarter as deficit spending weights down the economy.
Trudeau said the economy would come “roaring back”. Instead it’s snoring back.
Time to unleash free enterprise to move from debts to paychecks.
— Pierre Poilievre (@PierrePoilievre) August 31, 2021
“The “experts” at the Bank of Canada predicted 2% GDP growth for 2nd quarter. We got a 1.1% contraction.
Money printing doesn’t boost the economy. It just boosts inflation.”
The “experts” at the Bank of Canada predicted 2% GDP growth for 2nd quarter. We got a 1.1% contraction.
Money printing doesn’t boost the economy. It just boosts inflation.https://t.co/vt3VAKbCFP
— pierrepoilievre (@PierrePoilievre) August 31, 2021
“Freeland asked Trudeau, “pick your poison: high inflation or high unemployment or labour shortages or massive deficits or shrinking GDP?”
Trudeau: “What the heck; let’s have ‘em all!””
Freeland asked Trudeau, “pick your poison: high inflation or high unemployment or labour shortages or massive deficits or shrinking GDP?”
Trudeau: “What the heck; let’s have ‘em all!”
— pierrepoilievre (@PierrePoilievre) August 31, 2021
Canada literally can’t afford this
There is only one way to justify continued, long-term debt increases:
If GDP is increasing even faster.
That’s what the whole focus on the debt-to-GDP ratio is supposed to be about.
It’s similar to how if someone goes from making $50K in a year and is $20K in debt, and then makes $100K a year with $30K in debt. Sure their debt has gone up, but their income is up proportionally more, making the situation sustainable.
But what we are watching in Canada is the worst of all possible worlds:
Our debt is surging, while our economy weakens.
Simply put, our country literally can’t afford this.
Justin Trudeau’s economic policies have failed, and his approach on the economy is discredited.
For Canada’s economy to recover, and for our nation to avoid a debt crisis, Justin Trudeau must be defeated.
Spencer Fernando
Photo – YouTube
***
If you value my independent perspective, you can make a contribution through PayPal, or directly through Stripe below. Your support is always appreciated!
[simpay id=”28904″]
