Canadians expect a severe economic downturn lasting into 2010 rather than a mild recession ending by the summer of this year. A majority of Canadians also support federal and provincial governments going into deficit to stimulate the economy, with infrastructure spending and personal tax cuts being the preferred course of action to jump start the economy. There is very little support in the country for industry bailout programs.
These are the principal findings of a Nanos Research poll conducted exclusively for Policy Options in a random telephone survey between January 3 and January 7. The margin of error, in the sample of 1,003 Canadians, is plus or minus 3.1 percent, 19 times out of 20.
The poll clearly reflects a deepening pessimism in the country about the prospects for economic recovery in the near term, as well as a consensus that governments should prime-pump the economy, even though there is no great enthusiasm for a return to deficit spending.
In our poll for Policy Options, 57.8 percent of respondents expect a more severe downturn lasting into 2010, while only 34.1 percent of Canadians expect a mild recession ending this summer (question 1). A recession is defined as two consecutive quarters of negative economic growth. The pessimistic mood on the prospects for an early recovery is shared in all regions of the country, though it is least prevalent in the Atlantic (47.5 percent) and most apparent in Quebec (61.7 percent), possibly because Premier Jean Charest has just sought and received an electoral mandate to deal with the coming economic crisis.
While Canadians support (33.1 percent) or somewhat support (23.5 percent) deficit spending to stimulate the economy, that still adds up to only 56.6 percent, while 25.4 percent of Canadians oppose deficit spending and another 12.5 percent are somewhat opposed, for a total of 37.9 percent (question 2). This is a lukewarm endorsement of deficits as a necessity in the current economic emergency.
In terms of fiscal stimulus, we asked Canadians to indicate their first and second ranked options from a menu of four items (questions 3a and 3b). There is strong support for infrastructure and public works programs (the first choice of 39.6 percent of Canadians, and second choice of another 24.5 percent). Three Canadians in four support infrastructure spending as their first or second choice.
The next preferred option is personal tax cuts to stimulate consumer spending, the first choice of 23.4 percent of Canadians, and the second choice of another 27.2 percent. Half of Canadians like the idea of personal tax cuts.
Canadians’ third choice from the menu offered by Nanos Research was investment tax incentives for industry to create jobs, the first choice of 19.8 percent of respondents and the second choice of 26.9 percent. That’s an idea that finds approval with nearly half the population.
The least popular option, by far, is rescue packages for industries such as the auto sector, which is the first choice of only 12.8 percent, while another 17.8 percent put it as their second choice. In other words, only 3 Canadians in 10 support industry bailouts of the kind Washington and Ottawa have approved for the North American auto industry.
Support of rescue packages as a first choice is actually weakest in Ontario, home of the Canadian auto industry, with only 11 percent of respondents favouring rescue packages. In other words, only 1 Ontarian in 10 favours government coming to the aid of the most important industry in their own province as their first choice for addressing the economic crisis.
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