Tax Cuts Aren't the Solution, CAW Economist Says
September 4, 2008, 12:16 PM EST
The Canadian economy is mired in its worst economic slowdown in 17 years and the Harper government's mantra that tax cuts are the only solution has clearly failed, CAW Economist Jim Stanford says.
Recent Gross Domestic Product (GDP) statistics for Canada show that real GDP is lower than it was nine months ago and it's only an arithmetic fluke that allowed Canada to avoid an "official" recession, Stanford said. (GDP is a measure of national economic growth).
The federal Conservative government has tried to claim that its tax cuts would allow Canada to avoid following the U.S. into recession, but the August 29 GDP statistics and recent U.S. data confirm the contrary: Canada is actually leading the way into recession.
"The terrible July employment numbers in Canada suggest that the bigger recession may just be beginning now," Stanford says. "If that employment trend continues, then GDP will clearly decline in the third quarter of this year, and at a much faster pace than in the first quarter."
For the month of July, Statistics Canada reported that Canada lost 55,000 jobs, one of the worst monthly job loss rates in the last 15 years. Of that July total 32,000 jobs were wiped out in the manufacturing sector alone.