How canada escaped the global recession
Four months ago, Canadians emphatically renewed the ruling party's conservative mandate, handing Stephen Harper and the Tories the country's first majority government in over a decade. This victory was underscored by the humiliating decline of the Liberals — the country's "natural governing party" — who were displaced by a radical fringe party in their office of Official Opposition in the Canadian House of Commons. Adding insult to injury, the leader of the Liberals, former Harvard professor Michael Ignatieff, failed to win his own seat and was sent unceremoniously into political retirement.
The May 2 triumph of the Conservative Party in Canada's federal election marks a dramatic climax to what has been an unlikely course of political events in a country whose very identity had been inextricably tied to its reputation for being a Liberal stronghold. This shift in political climate becomes all the more striking when viewed against the political developments that had been taking place concurrently in the rest of the developed world.
As Republicans and Democrats pushed America further and further to the left and Europe approached ever closer to its socialist ideals, Canada's political discussion turned from which party could offer the greatest subsidies to the greatest number, to which party's program of tax cuts would be of more benefit to the economy. For a country where an openly avowed socialist party regularly polls in the top three in provincial and federal elections, this is no small feat. For perhaps the first time in its history, Canada finds itself at the most pro-market limit of the political spectrum among the world's industrialized nations.
It is not only in this regard that Canada has become an island unto its own. Equally unique to the country is its economic performance subsequent to the financial crisis of 2007 and throughout the ensuing alternations between recession and stagnation that has characterized the experience of the greater part of the developed world since. As the world teeters from crisis to crisis, Canada has proven remarkably resilient in spite of its heavy economic dependence on international trade. Whether there is any significance to the coincidence of these two anomalies will be examined in what is to follow.
By no means is this piece to be taken as an unqualified endorsement of the policies undertaken by the incumbent administration. Despite the overall tenor of the article, this piece could have just as easily been scathing indictment as commendation. The appraisal to be made varies directly with the choice of benchmark. Measured against examples that more closely approximate the free-market ideal such as 1980s-era Hong Kong and Jacksonian America, Canada falls hopelessly short.
But take the broad index of industrialized countries as a point of reference, and few will debate the strength of Canada's record. It is only in this latter context that anything in the present article is to be taken as a voucher for Canadian economic performance and it is only against the policies of the countries thus referenced that Canadian policy is being demonstrated to be superior.
That Canada has fared considerably better than the balance of countries hit by the financial crisis is commonly accepted. As noted in The Economist, by 2010 Canada had already been well into recovery from one of its mildest recessions on record while the rest of the developed world was struggling to keep from plunging headlong into economic chaos.