Last week, Finance Minister Joe Oliver released the fall economic update and it provided an overview of Canada’s finances and the projections for the coming years. Canada is in a strong position. We are on track to have a balanced budget next year with a small surplus. As promised, we are using some of the surplus to provide support for Canadian families and to keep federal taxes low.
See: Department of Finance Canada/Government Releases Economic and Fiscal Update
The fall economic update also serves as an excellent example of what can be accomplished with a prudent approach to long-term planning for Canada. Canada’s strong position did not come without a solid plan and the resolve to follow through on a plan. Think back to 2008 and the start of the worst global recession since the Great Depression. The causes of this Great Recession were rooted in the United States and Europe, but Canada was not immune from its impact. The Great Recession led to Canada’s first Economic Action Plan, which was the government’s plan to navigate the crisis. In a special budget delivered in January 2009, the late Finance Minister Jim Flaherty outlined the goals of Canada’s Economic Action Plan when he said “today we present Canada’s economic action plan. It is our plan to protect Canadians during the global recession, to create new good jobs for the future, and to equip our country for success in the years ahead.”
Over the next few years, Canada’s Economic Action plan moved swiftly to deal with the impact of the Global Recession. Financial support was provided to General Motors and other areas of the ailing auto industry in Ontario. This was done to secure as many of these jobs as possible and stabilize the Ontario economy. Employment Insurance eligibility was expanded to give more Canadians some extra support and flexibility during the most challenging months of the recession. The government intentionally ran large deficits for several years with targeted spending on large infrastructure projects and with small programs like the household renovation tax credit to help stimulate both the national and local economy. What our government did not do, despite the large deficits and challenging times, was raise taxes. We knew that Canadian households were weathering the Great Recession in their own way and it was up to the government to focus its spending and plan a path back to balanced budgets without raising taxes.
The Economic Action Plan started in 2009 and continued with our successive budgets and has worked remarkably well. The Canadian economy is one of the strongest in the developed world. Our Gross Domestic Product (GDP) – the best measure of the overall economy – is now well above pre-recession levels and is the strongest in the G-7 group of nations. Over 1.2 million jobs have been created since the depths of the recession with the vast majority of these being well-paid, full-time jobs in the private sector. In fact, small to medium sized businesses have been thriving across the country and this has helped employment rebound. Many of our efforts, including the New Hire Tax Credit and the Small Business Job Credit, have been critical for these smaller businesses to make the move to hire more people.
It is reassuring to look back at the words used by my friend Jim Flaherty because the goals of the plan he launched have been met years later and Canada is stronger because of it. Strong planning for the economy and job creation are the hallmarks of our government and something that really distinguishes Prime Minister Harper from the other leaders.
