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PM’s economic narrative is slowly unraveling

Photo: Stephen Harper, CC, flickr.com

Conventional Canadian political wisdom dictates that the economy is the only issue that really matters, and Prime Minister Stephen Harper has never been shy about trying to capitalize on this mentality.

Of course, the state of fiscal, monetary, and trade policies should be important to Canadian voters, but our obsessive focus on the economy has allowed Harper to survive several political scandals that would’ve easily sunk more qualified prime ministers. From the “deathbed” prorogation of Parliament in 2008 to regular violations of the Canada Elections Act, Canadians have overlooked persistent abuses of the country’s basic constitutional and democratic norms in favour of Harper’s allegedly steady hand on the “national tiller.”

Extra pocket money, it seems, is the sole point of concern for contemporary politics in Canada. We’ve reduced everything to a question of balanced budgets and lower taxes, and Harper is the Harper is losing his grip of the ‘national tiller’ PM’s economic narrative is slowly unraveling William Wilson Contributor mastermind behind this narrative. We could be actively discussing the need for a public inquiry into the disappearance of aboriginal women, or the true nature of Canada’s role in the war against ISIS. Instead we’ve opted to wait patiently in line for the next round of tax cuts.

It’s under this rudimentary understanding of Canadian politics that we approach the next federal election. Harper will make his third bid for Prime Minister on the promise of balanced budgets and lower taxes, and the opposition parties will be forced to react within the narrow confines of this narrative.

However, there’s a critical flaw in this strategy that doesn’t bode well for Harper’s re-election hopes: the economic narrative no longer resembles the economic reality.

The recent sharp drop in international crude oil prices will undoubtedly affect federal tax revenues and hurt employment figures in the oil-producing provinces. We might see a corresponding improvement in the Ontario and Quebec economies where the manufacturing sector benefits from low fuel costs, but this could take years to develop.

All of this has led TD Bank and the Bank of Canada to fret over the future health of the national economy. Federal deficits will likely remain a harsh reality for the immediate future, and service cuts may once again take the place of tax cuts.

I have no reason to doubt the next federal budget will be magically balanced in time for the election. After all, this is the same government that turned a legitimate constitutional option into a messy “coalition crisis.” Beyond that, all bets are off.

We’re now at a point where the distance between the economic narrative and the economic reality is becoming increasingly unbridgeable. While Canadians may be tolerant of Harper’s tricks at the ballot box, they’re unlikely to tolerate him playing tricks with their wallets.

Harper has built up a powerful political persona that’s tied almost exclusively to the health of the national economy. As it unravels, he’ll almost certainly unravel too.