September 10, 2010

Canadian economy tanking, Harper looking for a scapegoat

CANADA - Canada's economy is heading back into a recession (the dreaded double dip recession) and Stephen Harper is looking for a scapegoat for his bad economic policies.

Canada's unemployment rate jumped to 8.1% in August, new evidence that Canada's economy is slowing and may grind to a halt. Job numbers fluctuate in June and August due to contract educational workers, but when you ignore/discount those numbers then the Canadian economy has lost over 30,000 jobs in August, according to Statistics Canada.

Its also important to note student unemployment during the summer months was exceptionally high, 16.8%, a full 3 points higher than 2008, which means Canada's economic recovery is far from over.

The unemployment rate is still as high as it was during the 2008-2009 slump and needs to drop anothe 2% to reach pre-recession levels. Most new job gains in the last year have been part-time jobs and very few full-time jobs have been created.

The Canadian manufacturing sector lost another 26,000 jobs in August.

Meanwhile Stephen Harper is looking for someone else to blame for Canada's tanking economy. And while he is at it he is also slashing employment insurance benefits to make it even harder for the recently unemployed to get back on their feet.

Harper is cancelling the extra 5 weeks of regular EI benefits and axing a program that provides up to 20 extra weeks of benefits for older, longer serving workers. The changes will effect the vast majority of Canadians currently on EI and will damage Canada's economic recovery even further.

The average benefit over five weeks is approximately $1,768. EI claims are based on 55% of a person’s income. Over 20 weeks, the average person on EI receives $7,072.

In combination with the recent Bank of Canada interest rate hike to 1% it seems like the Harper administration is jumping the gun and trying to pretend Canada's economy has already recovered when the reality of the situation is that we're still far from it.

Indeed storm clouds are on the horizon as the Canadian real estate market is on the verge of a bubble bursting, which will mean huge losses to the construction industry and cause a ripple effect which will hurt manufacturing and the service sector.

Harper's program of only giving stimulus money to Conservative ridings (and only handing out cheques stamped with the Conservative Party logo on it) has only proven to be disastrous for the Canadian economy.

A wise man would have used the stimulus money in Canada's poorest communities, boosting the economies and creating jobs where they are most needed. Instead Stephen Harper frivolously spent all the stimulus funding only in communities which voted Conservative during the last election... and according to recent documents released to the public, 20% of the stimulus money was withheld until there was a photo opportunity with a big cheque decked out with the Conservative Party logo.

With the Canadian economy heading into the dumps its become obvious that Harper's economic policies were so shortsighted and deliberately partisan that he really doesn't care about average Canadians, he only cares if you vote for him.

The $47 billion stimulus program over the past 1.5 years was a Liberal Party idea, but the Conservative Party decided to pervert the spending on infrastructure and make it only in Conservative ridings and conditional upon photo ops. It all stinks of Conservative Party corruption and nepotism. Eventually this stimulus plan will run out of funding on March 31st 2011 and our economy will be left out to dry.

Meanwhile we (the Lilith eZine) have been promoting the idea of a permanent stimulus program to eventually ERADICATE the unemployment rate or lower it to below 1%. See our 2008 article "Creating Jobs in Canada" which came out a few months prior to the recession in the USA. Our idea was to use approx. $10 billion per year to create 300,000 new public sector jobs, doing everything from road works, building public parks, employing young Canadians, teaching immigrants, etc. The boosted public sector economy would create approx. 690,000 spinoff jobs in the private sector in terms of services and manufacturing. The end result would be an unemployment rate below 1% and the Canada's economy would be seen as being as strong and worth investing in. Best of all the Canadian government would get most of the investment back in taxes over the long term anyway and would bring back an era of rampant job creation and multi-billion dollar government surpluses. It is a win-win-win scenario for everyone.

Furthermore when the economy is good people are more able and more likely to buy more expensive products made locally instead of cheap imports. This in turn boosts the Canadian economy more because it lowers our demand on imports (which is essentially sending our money overseas to a sweatshop factory).

Our idea also calls for: More jobs for young people who need experience and have difficulty finding work due to lack of experience (the Ol' Catch 22). More desk / managerial jobs for older workers who want to cap off their pensions before they retire. This way when the babyboomers start retiring there will be younger people with more experience who are ready to fill holes in the job market because they've gained the experience, skills and confidence to do the job properly.

We are not alone in our criticism of Stephen Harper either. Have a look at what some of the provincial premiers are saying:

“A hike in EI premiums. . . at this point in time – not forever but at this point in time – I think runs counter to what we need to do in order to ensure that people regain more confidence every day about a growing economy,” says Ontario Premier Dalton McGuinty.

“This is a very uneven recovery,” says Nova Scotia Premier Darrell Dexter. Nova Scotia's unemployment rate is hovering above 9%. “In Nova Scotia we have a forestry industry that was heavily affected by the housing downturn in the United States. That market has not recovered anywhere near to what it was pre-October 2008.”

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