April 25, 2011 | In: Opinion
Canadian Elections and the Stock Market
One of the funniest lines about Canadian Elections was from a Canadian standup comedian: “What? Elections? Now? Well at least let put my pants on.” This line fully describes Canadian elections, they just throw it at you. It’s not like every X number of years as in some countries (or never as in some other countries), Canadian elections happen when the opposition topples the government (when it’s a minority government).
Anyway, in this election, there are 3 major players:
- The conservatives: Who are trying to win a majority government (half the MPs + 1 ).
- The liberals: Who are trying to form a government, any government!
- The NDP: Who are slowly but surely building up popularity and gaining seats by telling the people that they represent the real change.
For the last couple of elections, I have been watching the NDP, as it was growing from strength to strength! Why not? Canadians genuinely believe that the NDP represents the real change, that they will give them better health-care (which is currently a mess), more jobs. They are also promising lower taxation from small businesses and more control over large corporations. That’s exactly what over 90% of the Canadians want.
As for the conservatives, I think they did well leading the country through the financial meltdown in 2008-2009, they also did very well when it comes to simplifying the immigration procedures. What I think they did wrong was the following:
- The dispute with the United Arab Emirates: In case you don’t know about this, Canada had a very large dispute in late 2010 with the United Arab Emirates. The dispute started when the UAE wanted to land more Emirates flights on Canadian soil. The conservatives refused, stating that Air Canada’s interests in the far east routes will be disputed. The UAE retaliated by closing a military base (called Camp Mirage) in Dubai. The UAE waited for a Canadian response, but there was none. The UAE then retaliated by forcing strict visa requirements on Canadians visiting or working in the UAE. The government still did not back down. I think that the Canadian goverment made a big mistake by denying more flights to Emirates: If Air Canada cannot compete with international airlines, then it’s Air Canada’s problem, not Canada‘s problem. The Canadian government should have allowed Emirates to operate the additional flights. There are 20,000 Canadians in the UAE, that’s 0.067% of the whole Canadian population! I think, in the eyes of the Canadian government, these people should take priority over Air Canada’s corporate interests.
- The Americanization of Canada: Canada is not an American state, period! Canada has its own (much more peaceful) culture, and is very ethnically diverse. Canada says, bring your differences, live with us, let us learn from you, learn from us, and become one of us. The US says, leave your differences where you’re from, and then be one of us.
- The wars: I’m paying taxes, and I don’t want my taxes to be spent buying or building arms to fight countries or regimes that have never (or will never) threatened us directly. If a country has an internal problem, then I’m sure the people of that country, if they really want to get it solved, will get it solved. True democracy cannot be forced, it cannot be exported! True democracy can only be made from within.
Now let me focus on what the conservatives did right since their election:
- Stable economy: Canada was, as far as I know (and from what I’ve read), the only G8 country that navigated through the financial crisis of 2008-2009 with the least possible injuries. Canada, compared to the US, had a much more stable economy. People from the US started to immigrate to Canada during that period, which says a lot!
- Lower taxes: If I’m going to vote for the conservatives (I’m saying only “if”), then it’s because I’m sure they will never ever raise taxes. In fact, the conservatives have lowered taxes considerably since they went to power, and they have created many tax incentives so far. Some say that they had a surplus of money from the liberals era, maybe this is right, but I’m almost sure that if the liberals were in power, they would have raised the taxes.
- Faster immigration process: Because of the previous bureaucracy (back from the liberals era), the immigration process to Canada was taking (back in 2009) up to 6 years. Imagine, you apply to immigrate to Canada when you are 24, and you get to go to Canada when you’re 30. In these 6 years you would have made substantial changes to your life (they are probably the most important years in anyone’s life). Would you now give up all this and go to Canada, and start from scratch all over again? I think the previous system was unfair. Under the new system, immigration applications are now processed in one year or less (I’ve heard of cases processed in a couple of months), which makes all the difference, and will get quality applicants who are eager (and more importantly, not hesitant) to come to Canada.
- Transparency: I have to say that, compared to previous liberal governments, Harper governments were very transparent (probably because they were always under scrutiny from the media). There was a scandal or two, but nothing really major.
Now let’s move to the liberals, I think the liberals currently have some serious issues that they need to address before they even think about forming a government:
- Weak leadership: Stephane Dione beat Michael Ignatieff a few years ago, but apparently he was not a leader (I know, this is on the conservatives’ website, but it reflects the opinion of many Canadians, including the liberals). If Dione did beat Ignatieff, what does that tell us about Ignatieff’s leadership? I saw the debate a couple of weeks ago on TV, and I have to say, the between Jack Layton, Stephen Harper, and Michael Ignatieff, I felt that the latter was the weakest of all 3. All his arguments were based on attacks on the Harper, and all of what he’s saying was assumptions (like when he said that the Canadian people don’t trust Harper).
- Questionable alliances: The liberals allied themselves with the Bloc Quebecois, a party with a main objective of seceding from Canada (while we know that they can’t and won’t do this, equalization payments, anyone?). Shall I say more?
- Higher Taxes: Although Ignatieff said that he will not raise taxes, he said it in a way that raises a bit of skepticism: He said it while responding to Harper, who said that the liberals will raise taxes. I think this is a bit scary, because every Canadian relates liberals to higher taxes, so probably the first thing on the liberals’ agenda should have been “We will not raise taxes”. I think they will lose a lot of votes because they failed to do so.
- Quebec is sick with the liberals: The liberal party in Quebec has been in power for ages now. Just look at the roads (I took this picture yesterday while jogging, sorry but I’m not a professional photographer, but you see my point)!
…and please don’t tell me that this is because of the snow, it snows everywhere else in Canada, yet this is the only place where roads are that pathetic (once you cross the Quebec border the roads are completely different). The infrastructure generally sucks in Quebec, and, the liberals, just to balance their budgets, have increased the PST (provincial taxes) by 1%, and this will go on until the year 2013. An excellent way to drive away investors and entrepreneurs!
On the bright side, the liberals will most probably address all the problems that the conservatives created including the Canadian-UAE dispute because of Air Canada. I think resolving this dispute is critical to Canada’s interests in the Middle East (everyone is trying to gain more friends there, including the US, why are we creating enemies?)
I personally think that the biggest winner will be the NDP, and, it’ll be either the conservatives with another minority government (which will deal a serious blow to the liberals), or a liberals party controlled by the NDP. We shall see.
Now how does this relate to the Canadian Stock Market? Here’s how I see it:
- Conservatives win (majority): The market will go up.
- Conservatives win (minority): No change.
- Liberals win (minority): Minimal change, on the down side.
- Liberals win (majority): Will never happen, not under this leadership.
- NDP win (minority): Will never happen, but if we want to just entertain the idea, the markets will go down.
- NDP win (majority): Will never happen.
- Block Quebecois win (minority): Will never ever happen.
- Block Quebecois win (majority): Will never ever ever happen, but if it will ever happen, the Canada that we know will cease to exist!