If you look at the economic data it is very clear that the Trudeau era is the weakest of the last five pre-recessionary periods. That is one of the conclusions from a study by the Fraser Institute which took the four year period before the current COVID-19 recession and measured it against comparable four year periods prior to the last four recessions, which also covered the last four Prime Ministers.
One of the authors, Jason Clemens, says their study shows, across the board, weakness in the Trudeau economy compared to other comparable time periods in recent history which includes data from labour markets, business investment and income growth, “I think there was certainly some unrest in 2018 and 2019 and certainly I think the election results showed that the Liberal government went from a majority to a minority, in fact it was a historical decline, if you look at the history of the country. That said, I think all of that discomfort and dissatisfaction with the government’s performance, has now been, pardon the analogy, it’s been masked by the crisis that we’re in with respect to COVID and the recession.”
Clemens says concern for many economists, including himself, is the decline in business investment which he feels is border-line crisis and points out that its not a case of weak growth but that business investment is shrinking. Unfortunately he believes that the federal government is not only not acknowledging this problem, but is signalling it is not doing anything to encourage business investment and entrepreneurs.
Clemmons describes it as a broad based problem saying the decline in business investment is not limited to the energy sector, in fact two-thirds of Canada’s industries, over the four year period up to 2018, experienced declines in investment. He quoted the former Liberal Finance Minister, Bill Morneau, “we’re not going to get the jobs or the economy we want if businesses aren’t investing.”
And if the Trudeau Liberal government was interested in doing anything that could improve business investment he suggests reducing business tax rates, cutting the capital gains tax rate, looking at some national regulations particularly that affect large infrastructure projects. He says businesses across the country have indicated that the new policy regime and the new regulations that the federal government has imposed, have essentially made it impossible to undertake large infrastructure projects.
Jason Clemens says what is interesting, in part, is that the strongest economic period among those prior governments used as a comparison, is another Liberal government. That would be 1997 to 2000 under Jean Chretien and the weakest period was the Trudeau Liberal government from 2016 to 2019.
Clemens also says while the unemployment rate was among the lowest in the Trudeau era it is misleading because the private sector job growth was amongst the weakest due to a shrinking labour market, largely because of an aging population.
The study was authored by Jason Clemens, Executive Vice President of the Fraser Institute; Milagros Palacios, Associate Director, Addington Centre for Measurement, Fraser Institute; and Niels Veldhuis, President Fraser Institute.
