Conservative leader Stephen Harper gathers Hindu children around him for a photograph during a campaign stop Friday, August 7, 2015 in Richmond Hill, Ont.Paul Chiasson/The Canadian Press
Conservative Leader Stephen Harper is sidestepping questions about whether he believes the Canadian economy is in a recession, a point he appeared to concede during a televised debate with three other party leaders.
The declaration of a recession is an issue that could be written off as semantics. But with the economy the current focal point of a long election campaign, it could have a significant impact on Mr. Harper's ability to laud his own record and to sell voters on his preferred path to prosperity.
During the Thursday night debate, NDP Leader Thomas Mulcair accused Mr. Harper of trying to deny Statistics Canada data that show the Canadian economy shrank over the first five months of 2015. Six months of decline in the GDP is considered a recession.
"We are one month away from a technical definition of recession but, according to a lot of observers, we're already in a recession," Mr. Mulcair said.
Mr. Harper responded by saying: "Mr. Mulcair, I'm not denying that. What I am saying is that that contraction – "
At which point, the NDP Leader interrupted him to say: "You're not denying that we're in a recession. That's good."
Mr. Harper went on to explain that the losses were "almost exclusively" in the energy sector and that the rest of the economy was growing. It was a message he continued to run with on Friday when asked by a reporter during a campaign stop in Toronto to clarify whether he believes that Canada is in a recession.
"I have been very clear," replied Mr. Harper, who chose not to answer the question directly. "Look at the numbers. Eighty per cent of the Canadian economy is healthy and growing. We have a contraction in the energy sector that everybody knows is because of low oil prices. The question is what do you do? We say you stick on the low-tax plan that has had us as world leaders in terms of jobs and growth over the long haul and will continue to do so."
In fact, when the statistical data revealed that the economy shrank another 0.2 per in May, the oil patch was only partly to blame. There were also declines in three out of five goods-producing industries and in 11 out of 15 service industries – to the point that Douglas Porter, the chief economist at BMO said that "what's notable is the breadth of weakness."
On the other hand, the jobless rate has been holding firm at 6.8 per cent, and Canada has not seen the large losses that are normally equated with a recession. And analysts are predicting that the June numbers for GDP, when they are released, will be positive.
Stephen Poloz, the Governor of the Bank of Canada, said in July that the economy was going through a "mild contraction" and he found the debate about whether the country has entered a recession to be "unhelpful."
But Mr. Harper's challengers are naturally paying more attention to the downturn.
"Stephen Harper has the worst jobs record since the Second World War," Mr. Mulcair said Friday in an e-mail to The Globe and Mail. "He has overseen eight deficits in a row, he has added $150-billion to our national debt and, yesterday, he admitted that Canada is heading to a second recession under his watch. With incomes stagnant and skyrocketing household debt, Canadians can't afford four more years of Stephen Harper."