Governments in times of economic decline do not fare well at the ballot box

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Parliament is scheduled to rise this week, returning in late January. Over the course of the summer and the fall sitting, Pierre Poilievre’s Conservatives have established a large lead in the polls.

Is that lead permanent? The answer is probably yes, for a simple but virtually ironclad reason: Hard times bring down the government of the day.

The times we live in are pretty hard, even though we have low unemployment.

Economists predict little growth for the Canadian economy in the first half of next year. Some believe the country may slip into, or already be in, a recession. Inflation is expected to stabilize, but most of us have already felt its impact – prices have gone up faster than incomes, contributing to an overall decline in the standard of living.

The Bank of Canada’s overnight rate sits at 5 per cent – during the pandemic it bottomed out at 0.25 per cent – and will only come down slowly. Many people face sharp increases in payments as more mortgages come up for renewal. To prepare, they’ve cut back spending to pay down debt, further dampening economic growth.

As for housing prices, they’ve doubled in the past 10 years. Rents have also gone through the roof, making it much harder for young people, particularly, to find a place to live.

The Liberals are to blame for some of this economic bad news. Deficit-fuelled spending arguably contributed to inflation. But much of the hardship was generated by events outside Canada’s borders or the government’s control.

None of that matters in the least. Governments that preside over economic decline do not fare well at the ballot box.

The downturn that followed the First World War helped defeat the Conservative-led government of the day, bringing Liberal leader Mackenzie King to power in 1921.

The onset of the Great Depression led to King’s defeat in 1930. The same Great Depression brought down his successor, Conservative prime minister R.B. Bennett, in 1935.

Progressive Conservative Prime Minister John Diefenbaker’s large majority government was reduced to a weak minority in 1962, and then defeated the next year, in part because of two recessions that occurred on his watch.

A severe recession in the early 1980s contributed to then-prime minister Pierre Trudeau’s decision to leave politics and to the Liberals’ defeat in the next election. Brian Mulroney’s PCs presided over another severe recession in the early 1990s, which brought Liberal Jean Chrétien to power in 1993.

Hard times are hard on incumbent governments.

The Liberals will be hoping for a return to growth in the latter half of 2024 and robust growth in 2025. That isn’t likely to help much. People will be stuck with the higher mortgage payments. Higher grocery prices are baked in.

Would Liberal fortunes improve if Mr. Trudeau were to step down? Again, history doesn’t offer encouragement. Arthur Meighen replacing Robert Borden did nothing to help the Tory cause in 1921. John Turner could not rescue Liberal fortunes in 1984 nor Kim Campbell save the Progressive Conservatives in 1993.

The Economist recently interviewed former Bank of Canada governor Mark Carney, who certainly sounded like someone testing the political waters. “We can be leaders … or we can be followers,” he told the magazine. “The nature of this country in the past has been to be a leader. We should be again.”

But if the job does come open, and if he wins it, Mr. Carney could end up as opposition leader, which would be no fun at all.

Liberal supporters may point to Mr. Poilievre’s erratic performance this month as a sign that Conservative fortunes could soon be on the wane. His decision to filibuster in the House of Commons to highlight his party’s opposition to the Liberal carbon tax led to the Conservatives voting against support for Ukraine, a foolish move.

But most voters don’t focus on parliamentary theatrics. They only pay attention if Ottawa does things that affect the quality of their life. The Liberals will say that new dental care and coming pharmacare programs do exactly that. But most Canadians are covered already through workplace or government plans.

History does not always repeat itself, or even rhyme. Mr. Trudeau could pull off a comeback. But if he does, it will be against all odds.