We're a silly country with petty leaders.

In this column, I will not discuss the bizarre state of Parliament. I will not discuss the government's tactical blunders or the opposition's aggressive response. I will have nothing to say about Stephen Harper's folly, Stéphane Dion's hubris, Jack Layton's ambition, or how surreal it is that Gilles Duceppe, a man who wants to detach his province from the Canadian state, may soon be the most powerful man in that state.

Instead, I will discuss the latest economic indicators from Statistics Canada.

On Monday, StatsCan announced that "real gross domestic product increased 0.3 per cent in the third quarter, after remaining essentially flat over the first half of the year." Admittedly, that is not the most thrilling sentence ever written. But it is important.

It means the Canadian economy is not in recession.

I apologize if the reader is now suffering severe cognitive dissonance. After all, the news is saturated in economic gloom. Pundits and politicians like to say we are embroiled in "the worst economic crisis since the Great Depression."

But the Canadian economy is not in recession.

And no, that GDP number is not some freakish anomaly. The value of building permits issued in September -- the latest reporting period available -- was up 2.3 per cent on the year before. Housing starts were down 6.3 per cent, but that's a pretty modest decline coming off a good year. The latest data also show the value of new orders for manufacturing were up 6.1 per cent on the year before, while retail trade was up 5.8 per cent.

StatsCan also noted on Monday that "corporations recorded strong profit growth in the third quarter (+5.7 per cent), on top of the robust pace set in the second quarter (+8.6 per cent). This represents the largest back-to-back quarterly growth since 2004."
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Now, I don't want to be a Pollyanna. StatsCan's summary of the latest economic indicators is decidedly mixed. A one-third decline in the Toronto Stock Exchange, for example, is definitely not good news.

It's also important to acknowledge that these data, like all data, lag a little. Economists agree that things are worse in the fourth quarter. Modestly negative growth is expected.

This is in line with an OECD projection released recently. It shows the Canadian economy going into a recession that will last until the third quarter of 2009. Unemployment is expected to rise to 7.5 per cent by 2010 -- which is pretty good when you consider that unemployment in Canada has been 7.5 per cent or higher for 24 out of the last 32 years.

Put all this together and it's a portrait of a resilient economy that's entering a rough patch. It will be tough. But it will not be a disaster movie.

The contrast with the United States underscores the point. While the Canadian economy grew at an annualized rate of 1.3 per cent in the third quarter, StatsCan noted on Monday, there was a 0.5-per-cent decline in the U.S. economy. Also on Monday, the U.S. National Bureau of Economic Research reported that the American economy actually slipped into recession as far back as December, 2007.

Now, add to this the dramatically different state of the financial systems on either side of the border. And don't forget the dramatically different state of government books in Canada and the U.S.

Add it all up and it's very clear that while both countries face an economic crisis, the nature and severity of the crisis is very different. Yes, we are tied into the American economy and we will suffer as a result of American suffering. But still, the differences are real and significant. And that suggests the two countries' policy responses should be also be different.
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Now, remember that the fiasco on Parliament Hill started with the government's economic statement. The opposition was enraged by proposals to eliminate public financing of political parties -- which was entirely to the Conservatives' advantage -- and to temporarily strip public sector workers of the right to strike.

But there were also complaints -- that grew into the official rationale for the creation of the coalition -- that the government wasn't planning sufficient economic stimulus. This is a crisis, the opposition said. Now is the time for something big -- something on the scale of what the Obama administration is preparing to deliver.

That is a reasonable position. But it's also reasonable to argue that Canada's situation isn't as dire as it's made out to be, and that the $50 billion in corporate tax cuts scheduled to take effect is plenty of stimulus for now. It would be a little odd, for example, if the government were to borrow huge sums to spend on public works at a time when, as Laval economist Stephen Gordon noted, unemployment among construction workers is so low it would be a struggle to hire people to do the work.

If Canada were a mature democracy with responsible leadership, this is the debate we would be having right now.

But we're a silly country with petty leaders, so we're yammering about Stephen Harper's folly and the rest of the wretched little drama unfolding on Parliament Hill. The economy is treated as, at best, a secondary matter -- nothing more than grist for partisans, who repeat hype and spin and whatever factoids suit their momentary interests.

We Canadians are a fortunate bunch. Whether we deserve that good fortune is another matter.

You can contact Dan Gardner at the Ottawa Citizen.
E-mail: dgardner@thecitizen.canwest.com

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