The federal election campaign was already largely centred on the economy, but news that Canada experienced a recession earlier this year brought the issue into sharper focus, providing a range of statistics that were selectively seized upon by the party leaders to fit their political messages.

The economic data, nonetheless, placed Stephen Harper on the defensive over his stay-the-course approach, as the Conservative Leader argued the economy is starting to bounce back after being hit by low oil prices.

A bump in growth for June after five straight months of decline, however, wasn’t enough to change the fact that the economy shrank for the second consecutive quarter, according to Statistics Canada Tuesday, thereby meeting the technical definition of a recession.

As the campaign for the Oct. 19 vote stretches into a second month, all three major parties are making the economy a key plank of their platforms, and their ability to seize the issue is of outsized importance as Canada grapples with the slide in oil and now evidence of a recession.

On fiscal matters, the Conservatives are promoting their budget plans to balance the books and cut taxes while the NDP says it also can balance the books and deliver new programs by scrapping recent tax breaks and hiking corporate taxes. The Liberals are advocating major new spending on infrastructure that would be paid with three years of deficit spending.

NDP Leader Thomas Mulcair said Tuesday that Mr. Harper’s time as Prime Minister now includes two recessions.

“We know that Stephen Harper’s plan is failing,” Mr. Mulcair said at a campaign event in Vernon, B.C.

Conservative Finance Minister Joe Oliver had said in July that the government did not believe that Canada was in a recession. The government’s April budget forecasted economic growth of 2 per cent in 2015, yet private-sector economists and the Bank of Canada now expect the economy will grow only by about 1.1 per cent for the year as a whole. Throughout the campaign, Mr. Harper has argued that the current economic challenges are due to external factors, particularly the drop in oil prices.

Speaking at a manufacturing plant in Burlington, Ont., the Conservative Leader avoided the word recession and contended that economic troubles are now in the past given that the economy did grow in June.

“It is good news,” said Mr. Harper, who was highlighting his party’s efforts to boost manufacturing on a day when he faced opposition criticism for being overly focused on Canada’s troubled energy sector. Forecasts by economists for growth in the second half of the year were also used by Mr. Harper to dismiss proposals from the opposition.

“Thank God we didn’t use a couple of months [of] weak data to go out and commit this country to three years of deficit spending and huge tax increases like the other guys,” he said.

Recession is an emotionally charged word and economists are careful to toss it around out of concern that such talk may spook the public and make things worse. A group of eight economists operating as the C.D. Howe Institute’s Business Cycle Council rely on a broader definition of recessions, ranking them on a scale of one to five in terms of severity. The council won’t deliver an official ruling for months on if, in fact, there was a 2015 recession, but some of its members were split Tuesday over whether the latest data would fit the definition of a mild recession, particularly given that the data is often revised.

University of British Columbia economics professor Paul Beaudry, who is a member of the council, said the data does show Canada is in a no-growth environment. He said “weak” is the only way to describe the Canadian economy given the numbers.

“It can’t be interpreted as great,” he said. “It’s not disastrous, but it’s certainly weak news for the economy.”

Liberals argue that the data support the party’s view that a sluggish economy requires an ambitious plan to boost economic growth. Leader Justin Trudeau announced last week that he would double spending on infrastructure over the next 10 years and – unlike the Conservatives or the NDP – would be willing to run deficits until 2019 to pay for that spending.

Speaking in Gatineau, Mr. Trudeau criticized Mr. Harper’s characterization of the numbers.

“Stephen Harper is completely out of touch with the reality that Canadians are going through across this country,” he said. “Regardless of the technical definitions and what Statistics Canada is saying, Canadians have known for a long time that his economic approach is not working for them. People are struggling. People are worried and Mr. Harper is right now refusing to invest in the kinds of growth that Canadians desperately need.”

Ottawa — The Globe and Mail
Published Tuesday, Sep. 01, 2015 11:16AM EDT
Last updated Wednesday, Sep. 02, 2015 12:00AM EDT