# US Election Prediction Project

I'm going to make an attempt at predicting the outcome of the US presidential election. This is the first time I've done this, and a lot of what I'm doing is an experiment, as far as I'm concerned.

Instead of reinventing the wheel, as many other sites already aggregate polls, I've decided to aggregate the aggregators. I use the state polling averages from FiveThirtyEight, Princeton Election Consortium, Votamatic, PollyVote and HuffPost Pollster. Some of the sites include third parties; others do not. I use the state averages for the third parties from FiveThirtyEight. For the sites that don't have third party averages, I use that average. The two-party average that they have, I divide out proportionally among the remaining percentages.

So, for example. If PollyVote had a Republican:Democratic vote share of 52:48 for, say, Arizona and FiveThirtyEight had a 10% for Johnson, my model calculates that since there is only 90% of the vote left after Johnson is accounted for, the remaining R:D vote has to be divided among it. So the Republicans get 52% of 90%, or 46.8%. The Democrats then get 43.2%. It isn't perfect, but it allows for averaging of all the sites. And, more importantly, what matters in the model is the margin of the Democrats over the Republicans, not so much the specific percentages.

The model also considers the average variance in the polls since 1980 from the current month to election day to add another level of uncertainty into the model. As the election gets closer, this uncertainty will diminish. The deviation in the averages will come from the inherent variation in the state polls (where available), as well as the variability in the Democratic-Republican margin in each state in the last four elections. Finally, I also add a measure of uncertainty in the polling accuracy based on history. Generally, polls have been within +/- 2% of the final vote share for the winner.

I then run 1000 random simulations with the Democratic margin and the standard deviation in that state based on all the levels of variability, and determine the likelihood of the Democrat winning each state.

In the map below, the 3 red categories are likely Republican, either "Safe Republican" (the darkest red), "Likely Republican" or "Leaning Republican". The yellow states are considered a toss up at this point. The 3 blue categories are "Safe Democrat" (the darkest blue), "Likely Democrat" and "Leaning Democrat".

If you hover your mouse over any of the states it will tell you the state name, number of electoral college votes in that state and the projected probability of the Democrats winning that state.

See the pie chart to see the likely electoral college totals predicted for each party.

Finally, there is a chart showing how the chances for Clinton have changed since she was at the peak of her post-convention bounce in August, as well as the most likely electoral college vote outcome. This is the mode, not the average. That is, in the 1000 simulations, the most frequent electoral college vote total that occurs.

The day before the election, I will post a final prediction for each state including vote percentages, a measure of my certainty in my prediction for each state, and the overall national vote share as well.

# The Alberta Heritage Fund: What Might Have Been

In my original post on this topic, some time ago now, I talked about the squandered opportunity that is the Alberta Heritage Fund, particularly when compared to Alaska’s Permanent Fund. Norway’s sovereign wealth fund is obviously a shining example of well managed resource wealth. But Norway is its own sovereign nation. Alberta, like Alaska, is a smaller jurisdiction within a larger union. As such, I consider it a fairer comparison. Both the Alberta Heritage Fund and Alaska’s Permanent Fund started in 1976. Alaska’s fund is currently worth roughly \$68000 USD per Alaskan, while Alberta’s is worth \$3380 USD per Albertan.

Following the NDPs first provincial budget, in a second post I looked at how reliant our finances are on resource revenue, and how, sadly, that does not seem to be changing any time soon under the NDP. In fairness, right now would be a tough time to implement any major changes to the way we save resource revenue in the Heritage Fund. My sincere hope is that once our provincial finances are back in balance, this government, or a future one, will look at what could’ve happened with prudent use of the Heritage Fund, and decide there is no better time than now to make sure the future looks as good as the fictional past I’m about to present.

I’m going to look at three scenarios. First, just for comparison purposes, I’ll show various figures as they apply to the actual state of the Heritage Fund and Alberta’s use of resource revenues since 1981.

Second, I will show what those figures would’ve looked like had we implemented a hybrid of the Lougheed system (saving 30% of resource revenues in the Fund) and the Norwegian system (withdrawing 4% of the balance per year into government revenues).

Finally, I will present a rather radical concept and one sure to elicit gasps in Alberta. Resource revenue as a percentage of total revenue is at an all time low. With reports that oil is continuing to fall, and possibly headed for \$30 a barrel, maybe it’s time to consider no longer relying on resource revenue at all. If we completely eliminated resource revenue in general government revenue, by depositing it in the Heritage Fund, we would only add slightly over \$2 billion to the current deficit. That could be more than erased by implementing….wait for it….a PST!!!! GASP!!! I’ll show where we would be now if we had done something similar in 1987, when resource revenue was also at a relative low for the time period.

# What Actually Happened

For the following tables, foregone revenue means resource revenue that was contributed into the Fund, as it is revenue that cannot be spent on government programs. Regained revenue is revenue withdrawn from the Fund. Revenue balance is regained revenue minus foregone revenue. \$ Assets per \$ CRR is the value of the accumulated surplus (deficit) plus the value of the Heritage Fund divided by the cumulative resource revenue. It is essentially the dollar value of assets the Alberta government has been able to accumulate per dollar of resource revenue, or the value accruing to Albertans from a resource that belongs to them. The accumulated surplus (deficit) is the surplus in fiscal year ending 1981 with the surplus or deficit of every following fiscal year added on to that.

## Actual Historical Figures

Measure Total \$ Figure Per Capita \$ Figure
Heritage Fund Balance \$14.961 billion \$3,609
Foregone Revenue \$10.5 billion \$2,539
Regained Revenue \$37.5 billion \$9,040
Revenue Balance \$27 billion \$6,501
Accumulated Surplus (- Deficit) \$30.6 billion \$7,373
\$ Assets per \$ CRR \$0.20 N/A
Value of 4% Withdrawal in 2015 \$598 million \$144.34

As you can see, the Heritage Fund balance, accumulated surplus, revenue balance and assets accumulated per dollar of resource revenue have all been stagnant or declining in the last decade. With the exception of the surplus, there has been little change since the mid 90s, if not outright decline.

## Scenario 1

Now on to the revisionist history. It starts in fiscal year ending (FYE) 1981. The rates of return on the Fund will be the same for the theoretical Fund as for the income or loss reported here. The actual returns reported in the annual reports differ from these slightly, but the 10-year rate of return reported in the FYE 2014 annual report, 7.5%, compares to a 7.1% rate of return with my figures. So if anything, my figures are on the conservative side.

One thing we must consider about any savings fund is that If there were never any withdrawals from this fund, it would only represent a loss of spendable revenue. Norway handles this in a clever way.

They withdraw up to 4% out of the fund each year into the government's general revenue. This is essentially their budget balancing fund. The rule is that the non-oil structural deficit cannot exceed 4% of the current value of the Fund.

The Norwegian fund is currently valued at \$882 billion USD. For the sake of demonstration, let's say it's \$900 billion. 4% of \$900 billion is \$36 billion. So in their budget they could have expenses exceeding non-resource revenue by \$36 billion. The withdrawal from the fund would happen, and then the budget is balanced.

That's how I'll approach the first alternative history. First, I withdraw 4% of the balance of the fund for that year. Then I contribute 30% of actual historical resource revenues for that year to the fund. I then apply the historical rate of return to arrive at the new balance for the following year, and repeat the process.

## Scenario 1 Figures

Measure Total \$ Figure Per Capita \$ Figure
Heritage Fund Balance \$100 billion \$24,126
Foregone Revenue \$62.9 billion \$15,174
Regained Revenue \$62.5 billion \$15,072
Revenue Balance -\$424 million -\$102
Accumulated Surplus (- Deficit) \$3.2 billion \$769
\$ Assets per \$ CRR \$0.45 N/A
Value of 4% Withdrawal in 2015 \$4 billion \$964.79

In this scenario, essentially what happens is that resource revenue is shifted from accumulating a massive surplus to socking it away into the Heritage Fund. The Heritage Fund is larger by around \$85 billion. Now, this obviously represents a loss of immediately spendable revenue, but that revenue is regained over time, almost precisely one to one, just from withdrawals from the Fund. As well, as an example of why an approach like this is prudent, a 4% withdrawal from the fund this year would almost completely eliminate the \$6.1 billion deficit projected for 2015-16 in the latest provincial budget.

And unlike an accumulated surplus, which is just on paper, the \$100 billion in assets in the Heritage Fund would continue to grow and provide for future Albertans. Finally, this approach leads to \$0.45 per \$1 of resource revenue gained by Albertans in the form of assets. That is more than double the actual figure of \$0.20.

This scenario, in my opinion, represents a moderate, middle-of-the-road approach. We do not sacrifice large amounts of revenue while at the same time building up a significant amount of assets that grow over time, assets which we can sustainably access to level out the revenue fluctuations inherent in our non-renewable resource reliant economy.

## SCENARIO 2

Now onto what would surely represent a radical change in Alberta’s approach to handling resource revenue. Personally, I think the time is right to consider this, but I am extremely skeptical that the current government, or any government for that matter, has the political will to do so.

Many of Alberta’s problems stem from our reliance on resource revenue as a substantial component of total government revenue. This creates a cycle of excessive spending and excessive cutting whenever there is a boom and bust, respectively. If our revenue was more stable, as is the case in most other provinces, we could better plan government programs and services, as well as any changes to personal and corporate taxation. As well, we could more consistently work toward meeting the needs of a fast growing province, particularly with regards to health, education and infrastructure spending.

Most years it would be impossible to suddenly eliminate resource revenue as a budgeted revenue item. It simply accounts for too large a percentage of total government revenue. However, in the current fiscal year, resource revenue is expected to account for less than 10% of government revenue. Eliminating resource revenue from general revenues would only eliminate roughly \$2 billion. It would mean slightly more borrowing for now, but in the long run we’d come out ahead.

However, we could completely eliminate the need to borrow by boldly doing what many economists suggest we should: implementing a provincial sales tax. As written above, it’s suggested this would generate \$5 billion in revenue for the province. Even eliminating the resource revenue, we’d still be \$3 billion ahead, thereby cutting our current projected deficit in half. At that point, we could mandate that 100% of resource revenue is simply deposited into the Heritage Fund, and a maximum of 4% of the balance is withdrawn every year to bring the structural deficit to balance, the same as is done in Norway.

This is what I did in scenario 2. In fiscal year ending 1987, the resource revenue as a portion of total government revenue was also relatively low, albeit not as low as now. It would’ve been conceivable to start at that point weaning ourselves off of resource revenue. We could’ve planned to gradually increase the portion of resource revenue going into the Heritage Fund over 5 years, increasing by 14% every year, until we were at 100%.

At the same time, to ease the transition into a new tax, a PST of 1% would be implemented in 1987, and increased each year by 1% until it hit 5%. So that is precisely what I did in scenario 2. To estimate how much revenue PST would generate, I took the \$5 billion figure from above and adjusted it for population and inflation. It is likely to be off somewhat, but should suffice for the sake of demonstration. I also continued to withdraw 4% of the Heritage Fund balance each year into general government revenues. Up to 1987, I kept the figures precisely as they were in real life.

## SCENARIO 2 FIGURES

Measure Total \$ Figure Per Capita \$ Figure
Heritage Fund Balance \$209.7 billion \$68,933
Foregone Revenue \$186.7 billion \$45,022
Regained Revenue \$213.7 billion \$51,545
Revenue Balance \$27 billion \$6,522
Accumulated Surplus (- Deficit) \$30.7 billion \$7,403
\$ Assets per \$ CRR \$1.39 N/A
Value of 4% Withdrawal in 2015 \$8.4 billion \$2,757

The beauty with this scenario is that we end up with almost the exact same revenue balance and accumulated surplus as we actually did. The difference is that we now have a Heritage Fund worth almost \$210 billion, instead of just below \$15 billion. We gained \$1.39 in assets for every \$1 in resource revenue. And we could safely withdraw \$8.4 billion from the fund this year, thereby completely wiping out the projected deficit AND still leave us with \$2.3 billion to put toward measures to boost our lagging economy.

Imagine this was a year in which our budget was balanced. We could budget for an \$8 billion structural deficit and balance the books. This would give us \$8 billion of fiscal wiggle room. We could use that money to invest in infrastructure, health, education or any number of other government programs and services.

For those favouring small government, we could instead use that money to reduce the tax burden on individuals and corporations. The PST would remain, as economists widely agree it is a better form of taxation. They favour increasing revenue from consumption taxes and reducing that received from income taxes. If you wanted, with this \$8 billion, you could completely eliminate corporate taxes and still have almost \$3.7 billion left over. Taking that off of personal tax revenues would fully eliminate almost a third of the personal income tax burden in Alberta. Conversely, you could use the entire \$8.4 billion and cut ⅔ of the existing personal income tax.

## HOW THEY MEASURE UP

Measure in 2015 Actual Scenario 1 Difference Scenario 2 Difference
Heritage Fund Balance \$15 bn \$100 bn \$85 bn \$210 bn \$194.7 bn
Foregone Revenue \$10.5 bn \$62.9 bn -\$52.4 bn \$186.7 bn -\$176.2 bn
Regained Revenue \$37.5 bn \$62.5 bn \$25 bn \$213.7 bn \$176.2 bn
Revenue Balance \$27 bn -\$424 mn -\$27.4 bn \$27 bn \$0
Accumulated Surplus (- Deficit) \$30.6 bn \$3.2 bn -\$27.4 bn \$30.7 bn \$100 mn
Heritage Fund Balance + Accumulated Surplus (Assets) \$45.6 bn \$103.2 bn \$57.6 bn \$240.7 bn \$195.1 bn
\$ Assets per \$ CRR \$0.20 \$0.45 \$0.25 \$1.39 \$1.19
Value of 4% Withdrawal in 2015 \$598 mn \$4 bn \$3.4 bn \$8.4 bn \$7.8 bn

## CONCLUSION

What is clear from comparing these scenarios is that the PCs abandoning their own plan to prudently save resource revenue represents a missed opportunity of substantial magnitude. Even continuing with their own plan would have been a substantial improvement of the current situation. Having taken bold leadership in the late 1980s by gradually implementing a PST and gradually eliminating reliance on resource revenue would have put us in a fiscal situation that would be the envy of any province in Canada and likely most jurisdictions in the world.

The current NDP government should seriously consider such a bold move for the betterment of future generations. It would likely be political suicide, but with a strong majority, now is the time to do what is right for our province, which may not always be the same as what is popular. In order to ensure the program can’t be undone by future majority governments, the NDP could also take the bold step of implementing proportional representation electoral reform, thus ensuring future Legislatures represent the diversity of Alberta and work toward policies that benefit the many instead of the few.

One can dream…

References

1. Fiscal figures. RBC Canadian Federal and Provincial Fiscal Tables.

2. Budget figures. Provincial Budget 2015/16.

3. Resource revenue figures. Alberta Department of Energy. Resource Revenue History

# Alberta NDPs First Budget OR The Sky is Falling

In a previous post, I looked at the history of the Alberta Heritage Trust Fund under 43 years of PC governments. The initial plan to put 30% of resource revenue aside for future generations was abandoned after only 11 years, at which point resource revenue allocations stopped, and have not restarted since.

What if that were not the case? What if the PC party had followed their own plans? Where would we be now?

I’ll address that in part 2 of this 2 part series, but I first want to address some criticisms addressed to the Notley government regarding their recent budget.

1. The budget is widely unpopular.
The vocal criticism online is not necessarily matched by broader public sentiment. Mainstreet Research did a poll shortly after the budget was released.

The NDP is clearly not as loathed as the ferocity of social media commentary would have one believe. Their vote intention support is currently in a dead heat with that of the Wildrose, and only 4.6% below what they received in the May provincial election.

As for the budget, it is not a complete flop. Mainstreet was very wise in asking the general question about the budget first. It was worded "From everything you have seen, read or heard, do you approve or disapprove of the new budget released by the Alberta government this week?" 43% of respondents said they disapprove. However, a full 26% of respondents said they weren't sure.

When Mainstreet asked respondents about specific items contained within the budget, the responses were different, which could be an indication that those who answered "disapprove" in the general question, were unaware of what was in the budget, except what they garnered from negative social media commentary. Once it was laid out for them, they weren't nearly so disapproving.

41% said the deficit was not big enough or just right versus 37% who said it was too big. 49% approved of the capital spending plan vs 41% against. 55% disagreed that the government should cut capital spending vs 29% who agreed. 46% approved of borrowing for operational spending and public sector compensation while 35% disapproved. 71% support the job creation incentive program. 59% approve of the increase in "sin taxes" on alcohol and tobacco. On the plan to run deficits for four years before getting back to balance, 40% disapprove and 29% approve. Yet, 52% DISapprove of the government balancing the books sooner, even if it has to raise taxes or cut services.

It is clear from this that the top line headline that 43% disapprove of the budget is a gross oversimplification. They disapprove of what they saw, heard or read of the budget before they took the survey. When presented with what the budget actually contains, they don't disapprove nearly as strongly, and more approve than disapprove on most measures. And although they disagree with the government's plans on deficit financing and borrowing, they don't want the government to change that plan, because they recognize the reality of the solution: tax increases or service reductions.

From that poll, if it is an accurate assessment of overall public opinion in Alberta, I'd say the NDP did the best they could with the fiscal and economic situation they inherited.

2. This is the largest budget deficit in Alberta's history
That is untrue, unless you are okay comparing 2015 figures to 1980s figures without adjusting for inflation or the size of the economy. Generally for the sake of comparison these figures are compared as a percentage of the provincial GDP. On that measure, this is the
8th largest budget deficit in Alberta since fiscal year ending 1981. All 7 others occurred in the late 80s and early 90s under PC premiers Peter Lougheed and Don Getty.

3. They are putting us into reckless levels of debt akin to Greece
Uh, no. They have set their debt ceiling at 15% of GDP, which is well below the provincial average in Canada, and higher than only Saskatchewan. Keep in mind, they are not actually projecting they will be there, merely stating that should oil prices go further south, that is the highest they’d push borrowing. They project they will only reach
10% of GDP by fiscal year ending 2018. Greece's debt to GDP is around 175%. The NDP would have to borrow almost \$600 billion to reach that level. That is almost the entire accumulated FEDERAL net debt.

4. Alberta has an enormous spending problem
We don’t have an out of control spending problem. Below I compare the 2015-16 budgeted figures to those of the other nine provinces, as a % of GDP. The median for all the provinces for both expenses and revenue (incidentally) is ~19% of GDP. Alberta is considerably lower on expenses at 15%, but even further back on revenue at 13.2%. We don’t have an expense problem. We have a revenue problem.

The NDP has made early attempts at addressing this by raising corporate taxes a meagre 2% (to levels that existed during Ralph Klein’s time in office) and introducing some progressivity into the income tax system. They’ve also raised some taxes on tobacco and alcohol and some insurance premiums. There may be future measures coming in the form of resource royalty changes, but that remains to be seen. And they didn’t do one thing that could’ve completely eliminated the deficit, introducing a provincial sales tax, because it’s a political poison pill. It’s estimated that each percentage point of PST would raise \$1 billion in revenue. So even if they matched the 5% federal GST rate, that would take \$5 billion off the deficit.

The fact of the matter is, no matter what the Wildrose Party says, we can’t have it every way we want it. If you want the government to balance the budget then you need to accept that taxes will have to increase or programs will have to be cut, or both. And if you want to cut programs, consider the options. Our expenses are already well below the median for other provinces. And consider what \$6.1 billion represents. Anything above 100% means you could cut the entire department, and still not have saved \$6.1 billion.

Department/Service % of Expense Represented by \$6.1 Billion
Post-Secondary Institution Compensation 179%
Entire Public Service Compensation 173%
Human Services 142%
Teacher’s Wages 109%
Physicians and Drug Costs, in Both Community and Hospital 91%
Education 80%
Total Alberta Health Services Compensation 80%
Health 31%

The next time you hear the Wildrose tell you they would’ve balanced the budget without raising taxes, ask them which of these services they would’ve cut. A common assertion of theirs is that our public service is bloated. Even if you fired every last person in the public service, you’d still have a \$2.6 billion deficit.

The fact of the matter is, we are in this situation for two reasons. First, our revenue and fiscal balance is very tightly tied to resource revenue, which is mainly determined by oil prices, something over which we have no control. Not coincidentally, the resource revenue shortfall in this budget is ~\$6 billion. Go figure.

Consider this graph showing our fiscal balance as a % of GDP and resource revenue as a % of GDP. They are very closely related.

And as you see from this, there is an almost perfect relationship between change in resource revenue as a % of GDP and change in fiscal balance as a % of GDP.

This graph, done by Trevor Tombe for Maclean’s Magazine, shows how our inability to accurately predict future resource revenue is a big source of the fluctuations in fiscal balance.

Since 1981, resource revenue has made up, on average, roughly 25% of total government revenue. This ranges from a low of 14.08% in 1998/99 to a high of 40.55% in 1980/81. It is at 6.3% for the current budget year, rising up to 9% by FYE 2018. That is one way to deal with the problem. Find other sources of revenue so we are not so reliant on resource revenue.

5. The NDP is scaring away investment
This gem returned in earnest with the budget day announcement by Shell that they had decided to close their multi-billion dollar Carmon Creek project in northwestern Alberta. First of all,
Shell themselves have put this notion to rest, stating that the NDP government’s budget and royalty review had nothing to do with their decision. Second, a quick look at Alberta’s history of non-residential capital formation (a measure of business investment) shows it is very closely tied to the price of oil, which makes sense, given the oil industry constitutes about a quarter of our economy, and it is a capital intensive industry.

You see that the Alberta investment figures here track closely to the price of oil, whereas capital investment in Quebec and Ontario do not. The relationship between oil price and business investment in Alberta is very strong.

It is clear from all of this that the NDP have been handed a difficult fiscal and economic situation. They've dealt with it in a manner they think best. Time will tell if their approach is prudent or not. It certainly would be nice to see more emphasis in the budget on what measures we are implementing to ensure a future with lower reliance on resource revenue and a greater commitment to saving during boom years so we can cushion the blow during bust years. But given we are in the midst of a significant bust, it will be hard to do that until things pick up again.

In the next post I'll look at one way we could do that, by recommitting to regular contributions of resource revenue to the Heritage Fund. Specifically, I'll look at how different ways of contributing that revenue and withdrawing it later would have left us had it been done since 1981.

References

1. Fiscal figures. RBC Canadian Federal and Provincial Fiscal Tables.
2. Budget figures. Provincial Budget 2015/16.

3. Resource revenue figures. Alberta Department of Energy Resource Revenue History
4. Capital formation figures. Statistics Canada, CANSIM Table 384-0038:Gross domestic product, expenditure-based, by province. Alberta. Business gross fixed capital formation, Non-residential structures, machinery and equipment.
5. Oil price history. US Energy Information Administration, WTI Average Annual Price
7. USD/CAD 2007 currency exchange conversion

# My Final Election Prediction

Here is my final election prediction. Just like for the election prediction contest, I'll put down my predicted national popular vote for each party, as well as the seats I believe they'll win in each province and territory. I'm putting it in graph form as it is easier to envisage that way. If you float your mouse over the graphs, it will show you the individual values. If you are interested in more detail, my riding-by-riding projections are here.

At the bottom of the page, I've given a list of 81 ridings that are expected to be won by a margin of less than 5% of the vote. It is embedded in a window but if you want a version you can maybe print, just go here. They will be interesting ridings to watch as the coverage unfolds tomorrow night.

# Seat Projection: E-7

Well, there's only a week to go, and things are really heating up now. If the polls are accurate, the Liberals have the momentum going into the home stretch and the NDP are fading fast, with the Conservatives continuing to hover around 30%.

I am going to post a final seat projection the night before the election or the morning of.

As a note, if the seat projection seems a little different from last time in terms of the Conservative increase, it's because I played around with my model a bit. I added an incumbent advantage to the ridings the Conservatives currently hold. Incumbent advantage is well documented in the literature and usually amounts to a 3-5% bump for the incumbent. That's why the Conservatives are a bit higher than last time.

# The Map for Change

If you want my rationale behind this map, go here. How'd I make it? Go here.

The main point is I want to encourage people to vote strategically this election. Not because I think everyone should dislike the Conservatives and so should boot them out. But because I think our system needs changing, and they are the only major party who has come out in opposition of electoral reform. The Liberals, NDP, and Greens all state that should they form government, this will be the last election under our current voting system.

The map is simple. Find where you live by zooming in (if you live in a city, zoom really far in as your city may be surrounded by one colour, but your local riding may be another).

If you're surrounded by red, vote Liberal. Orange, vote NDP. And green, vote Green.

I did not include the Bloc Quebecois in Quebec. Although they are important to many Quebecers, their main goal is sovereignty for Quebec, not reform of the existing federal system.

If a riding is light red, light orange, or light green, it is because there is very little chance any candidate but the Conservative candidate will win, even with strategic voting. However, I wanted to give people an idea of who the top ranked second place candidate is, at least as far as the seat projections go.

If you click on any area of the map, it will tell you the riding name and which non-Conservative party has the highest likelihood of success.

Below the map I've included a table that will show what the House of Commons would look like if this system played out perfectly versus how it would play out as currently projected by polls if there is no strategic voting.

Share as far and wide as possible, particularly on Facebook as it has the broadest reach.

Thanks!

In case the embedded map below does not work, here is the direct link.

Conservative Liberal NDP Bloc Green
Non-Strategic 98 183 44 11 2
Strategic 59 221 56 0 2

# Map For Change: Methodology

What is the Map For Change? See here.

Why change? See here.

How'd I make it?

1. I use the current aggregated polls at The Signal, by the Toronto Star. It is done by Vox Pop Labs, makers of the popular CBC Vote Compass. Their methodology seems impressive and their presentation is second to none, in my opinion.

2. I then take those poll numbers and punch them into the Canada Simulator over at Too Close to Call, another poll aggregating site done by Bryan Breguet. The main reason I chose it is because I can easily copy and paste the results into Excel.

3. Now I have the projected result in every one of the 338 ridings in Canada in the upcoming election. If the Liberal candidate is projected to win, it's a red riding. NDP candidate, orange, and so on.

4. If a Conservative candidate is projected to win, I had to determine whether strategic voting could defeat them. I believe many voters who vote NDP and Liberal will vote for that party regardless. They are not NDP-Liberal swing voters. Research I've seen from Greg Lyle at Innovative Research led me to assume that about half of stated NDP voters are core NDP supporters. Their vote will not move. The same for Liberal voters. So to be realistic, I only assumed 50% of the vote from each party could move to the other party.

So, if the second place candidate is projected as a Liberal, I take their projected vote and add 50% of the projected NDP vote. If that number is higher than the projected Conservative vote, I rank that a red riding. And similarly for projected second place candidates who are NDP.

That's it!

# Just This Once

In the 2011 federal election, only 61% of Canadian voters cast a vote. It was the second lowest voter turnout in 65 years, beat only by the previous election in 2008.

If you were one of those who didn't vote in the last election, consider voting JUST THIS ONCE. Why should you vote THIS TIME, and what makes 2015 different than any other election in which you decided not to vote?

In short, non-voters are THE SINGLE MOST POWERFUL voter bloc in Canada. And, if they come out in this election in a strategic fashion, they can change our democracy for the better, so that in the future, every vote matters and our Parliament works for all Canadians, not just the small proportion who elected the party in power.

Index
1. Why should I vote?
2. How can non-voters change elections?
3. Why is this time so important?
4. Won't electoral reform mess up our country?
5. I don't know who to trust.
6. Which change candidate is most likely to win in my riding?
7. Voting seems so daunting. How do I do it?

1. Why should I vote? Isn't my vote just wasted.

It is clear from the last 65 years that more and more Canadians don't feel their vote matters. Voter turnout has declined steadily over time. In fact, if you consider voter turnout and vote percentage won, Stephen Harper's majority Conservative government elected in 2011 has the lowest percentage of support of any majority government in Canadian history.

And you are somewhat right to think that your vote is "wasted". In our voting system, arguably the only votes that count are the ones needed to put the first place candidate ahead of the second place candidate.

If candidate one gets 20000 votes and candidate two gets 2000 votes, really only 2001 votes meant anything. The 2000 votes for candidate two are "wasted" because they don't get into Parliament. And the 17999 excess votes for candidate one are "wasted" as well, because they weren't necessary to elect that individual.

# If you look at the 2011 election in this light, over 70% of votes cast went to candidates who never won or were votes in excess of those needed for the first place candidate to win.

No wonder 40% of eligible voters in Canada felt like staying home.

There are other reasons Canadians choose not to vote, but most of them have to do with feeling their vote doesn't matter or that those we elect simply don't speak to what matters to voters most.

Source: Macleans.ca

2. But if my vote is wasted, how can non-voters possibly change this election?

Allow me to explain. Non-voters could be the deciding factor in this election, if they come out to vote JUST THIS ONCE.

In the last six elections, if there was a party called the Non-Voters Party (we'll dub them the NVP), and all non-voters cast a vote for that party, it would've formed government.

I also analyzed the 2011 election, as it was one of the closest elections that nonetheless resulted in a majority government. I didn't consider ALL non-voters, because even in countries like Australia where it is mandatory to vote, voter turnout is still only 95%. I used a noble yet realistic goal of 85% turnout, which many European nations like Belgium, Denmark, and Germany frequently attain.

Using that figure, I looked at every one of the 308 ridings in the 2011 election, and asked whether if all the non-voters cast their votes for the second place candidate, whether the result would've changed.

# If non-voters all voted for the second place candidate in each riding in 2011, the result would have changed in 253 of 308 ridings. That's over 80% of the seats in the House of Commons.

This is what the House of Commons looked like after the 2011 election.

## Actual Seat Count in 2011 Federal Election

This is what it would've looked like had non-voters come out in force for second place candidates.

## Alternative 2011 Election Seat Counts

The parties don't necessarily matter. What matters is that the composition of Parliament dramatically changed, and the Conservatives would not have won a majority.

Even if just one specific group of non-voters, those aged 18-34, turned out in larger numbers, the change in result would be dramatic.

# If 18-34 year old voters turned out in the same proportion as the highest turnout age group (65-74 year olds), and they all voted for the second place candidate in their riding, they would've changed the result in 95 ridings.

In our system that's the difference between a Conservative, Liberal, or NDP government and between a majority or minority government.

3. Okay, so non-voters can change the result. But why this time?

Because this time, two of the three parties in contention to form government are committed to changing our electoral system. Both the Liberals and the NDP have said in their election platforms that if they form government, this will be the last federal election in Canada under our current voting system, a system that distorts minority support into majority power and wastes the vast majority of votes cast.

The specific system chosen would be decided at a later date, but it would be a proportional system of some type, where the percentage of seats in the House of Commons is close to the percentage of votes cast for that party. In those systems, nearly every vote counts, and the House of Commons would represent the diversity of public opinion not only in its composition, but in its legislation.

Think about it. Our current system works one of two ways.

1. A government is elected with a majority of seats, by well less than 40% of eligible voters.

Since Confederation in 1867, the average majority government was voted in by 32% of eligible voters (popular vote X voter turnout). So a majority government can spend four years implementing policies and legislation that appeal to around 1/3 of the population. For four years the other 2/3 feel ignored. A new election happens, and if a different party wins they spend four years partly undoing what the last government did, and partly appealing to their 1/3 of voters.

2. A government is elected with a minority of seats.

What ensues is a power struggle whereby parties attempt to avoid triggering another election too early, but after a short period of time, start posturing for the next election so they can secure a majority.

Our system is all about majoritarian rule. Because if you have it, you can pass any legislation you want (within reason of course; the courts can always overturn it if it's too ridiculous). The only way to ensure this system changes is reform. And the only way to ensure reform, is to vote for any party but the Conservative party, as they're the only party that has explicitly stated opposition to any type of electoral reform in Canada.

4. But I heard a proportional representation system would turn us into Italy, with never ending gridlock and perpetual elections.

That is a common misconception not supported by empiric evidence.

In a large study of proportional systems, a political scientist named Arend Lipjhart found:

• Voter turnout is higher
• Government policies are more representative of voters
• Citizens were more satisfied with democracy
• More women were elected

Most importantly for some voters though, PR systems have only been shown to marginally increase the number of political parties (and with 6 in our latest Parliament at dissolution, we aren't exactly a two-party system; Finland, Sweden, and Norway all have 8 with PR systems).

And they don't reduce stability in government.

In a study that compared elections between 1945 and 1998 comparing systems like ours to PR systems, countries like Canada averaged 16.7 elections and PR countries averaged 16. I compared Canada in this regards to some western nations with PR systems.

## Number of Elections Since 1945

The New Zealand electoral system has often been put forth as an option that may work well in Canada. What has their experience been, given that they just adopted PR in 1992?

## Average No. Of Yrs Between Elections

Yeah. I know. They're basically identical. Almost every inter-election period in New Zealand since 1946 has been 3 years, except 1949 to 1951. That's it. And that hasn't changed since PR was introduced in 1992.

5. Okay, I like the sound of this. But I'm not sure I trust Thomas Mulcair (NDP) and I just don't know if Justin Trudeau (Liberal) is ready.

I get it. I do. The beautiful thing about the system I'm about to show you is that it will give majority status to neither. Under the system of strategic voting I'll describe, it would be a Liberal led minority government, with a strong NDP contingent. Both Mr. Trudeau and Mr. Mulcair have said there are no circumstances under which they would form a coalition with Mr. Harper. So to avoid another election, they'd have to work together. And although they disagree on many things, they agree on the need for electoral reform.

6. Sounds great. But how do I know who to vote for in my riding? Which candidate who supports change is most likely to win?

I'll show you. Simply access the map here. But if you simply want to choose which candidate to vote for in your riding, find your residence on the map.

If the area around your home is red, vote Liberal. Orange, vote NDP. And green, vote Green.

I did not include the Bloc Quebecois in Quebec. Although they are important to many Quebecers, their main goal is sovereignty for Quebec, not reform of the existing federal system.

What if it's blue? Well, you live in a riding that with almost complete certainty will be won by the Conservative candidate, no matter how many non-Conservative supporters vote for another party. Encourage your friends and family in other ridings to strategically vote. For you, if you want to take your chances, go here. Whichever party has the second highest projected vote in your riding, vote for them.

7. But voting seems so daunting. And I've heard the identification rules are more strict this time.

It's true identification rules are tougher, but for the vast majority of people, voting should still be a breeze, at least from a process perspective.

First of all, by federal law, your employer MUST give you three consecutive hours off to vote, if needed, on election day.

Election day is October 19. Polls are open different hours in different areas of the country. Check elections.ca to find out more.

If you want to avoid the election day rush, attend the advance polls on October 9, 10, 11, or 12. They are often open for 8 hours on each of those days so that is lots of time to do it.

Where to vote? Go here. Enter your postal code. It should find your polling station for you. Don't trust the voter card if you got one. There have been numerous errors coming from Elections Canada. If you aren't sure, call Elections Canada directly. The number to your local returning office should show up on the site.

What do I need to vote?

If you have a government issued photo ID WITH YOUR CURRENT ADDRESS ON IT, that will suffice. A driver's license is best.

Or, TWO PIECES of ID, one of which MUST HAVE YOUR CURRENT ADDRESS. A mailing address does not suffice, unless you're already on the voters list. You can check if you are on elections.ca. Of note, if you're a rural voter and not already on the voter's list, one piece of ID must have your physical address on it, not your mailing address on it.

If all else fails, if someone else who lives in your area is already registered and is willing to attest to your physical address, you can take an oath.

Share this with as many people as you can, preferably on Facebook, as it has the greatest ability to go viral on Facebook. I truly believe in the power of voters, and if we come together to vote for change, we can change the nature of our democracy in Canada for the better for us, and for all future voters.

# How We Compare with Other Advanced Economies: Distribution, Debt, and Overall

Finally we get to measures of distribution and debt. These are measures of how wealth and economic activity is distributed to the population of nations, how governments and households accumulate debt, and how government distributes expenses and revenue. The biggest difficulty with this set of data was it was incomplete for quite a few countries, so you will see for some of the data that there are as few as 21 countries with complete data.

At the end, I'll conclude by looking at Canada's overall performance on all of the indicators studied in the three posts.

Annualized Change in Real Net Income Per Capita

This measure was difficult to come by but I found a dataset in the OECD that looked at net income. It basically takes per capita income and then subtracts taxes and other deductions but adds back in benefits and social transfers. They had two categories, single earners and married couples. I took the average of the two categories.

Canada did well here, 8th overall in the OECD and top of the G7.

Best Country: Sweden   Worst Country: Greece   Top G7: Canada      Bottom G7: Japan

Annualized Change in Real Net Disposable Income Per Capita

This is a similar concept to the first measure, but measured a bit differently, on a broader basis. It essentially takes into account all income available to citizen's to spend or save. It includes income generated by the economy, transfers from government, etc. The European statistics agency has a decent definition you can take a look at.

Canada did well here also, 9th overall in the OECD and second in the G7, behind Germany. I looked at both measures only because it was hard to know which one was a better indicator of income distribution to the population overall, and they do compare quite closely. Of note, the data was much too incomplete on inequality measures like how much wealth the top 1% holds versus the average population. It was only available for some countries and only available for very few years.

Best Country: Slovak Republic   Worst Country: Greece   Top G7: Germany Bottom G7: Italy

Annualized Change in Government Social Benefits and Transfers Per Capita

This essentially looks at how much citizens get back from their government in the form of social programs and monetary transfers. Now, there may be disagreement on what constitutes "good" on this measure. Fiscal conservatives may argue that government benefits should decrease over time. But because it is often used as a measure of distribution to citizens, I'll consider that growth in benefits and transfers per capita is a positive.

Of 28 countries, Canada places 16th overall. So whether you consider it good or bad (wherein we would place 12th) we are pretty middle of the road. As we are in the G7.

Best Country: Italy   Worst Country: Japan   Top G7: Italy    Bottom G7: Japan

Cumulative Change in Central Government Net Debt as % of GDP

Now we move into measures of debt and deficits. Although deficits and surpluses can vary over time, a more important measure in the long run is how much debt a country has as a portion of their economy. I looked at central government debt because otherwise provincial government debt would be added in. As well, I used net debt because that is what Canada usually reports as our debt.

There were only 23 countries in this dataset, but of those 23, Canada ranks 9th, and 2nd in the G7. Our net government debt increased over time, but in fairness, only 6 of the 23 countries managed to decrease their debt.

Best Country: Norway   Worst Country: Ireland   Top G7: Germany    Bottom G7: Japan

Cumulative Change in Government Fiscal Balance as % of GDP

This basically looks at whether a nation ran surpluses or deficits over time and, if so, how large they were. A positive figure means they grew their balance in the surplus direction over time and a negative figure means they grew their balance in the deficit direction over time.

Canada placed 14th of 29, 4th in the G7, moving more toward a deficit position as a portion of our GDP over time. Eight countries were able to improve their fiscal balance over time.

Best Country: Germany   Worst Country: Spain   Top G7: Germany    Bottom G7: Japan

Annualized Change in Household Debt as a % of Disposable Income

If growth in prosperity is based on ever increasing levels of personal debt, eventually, as was seen in the 2008 US housing crisis, the cracks in the foundation will start to show. This measure is important because it looks at debt as a portion of disposable income. Basically, how much debt do you have compared to how much money you have to service that debt.

There were only 21 countries in this data set. In that group, Canada ranks 15th and we are second last in the G7. Our household debt has increased substantially over the last 10 years.

Best Country: US   Worst Country: Slovak Republic   Top G7: US    Bottom G7: Italy

Average Rank for Distribution and Debt Indicators

Again, as with the other indicator sets, Canada is middle of the road. We are 15th of the 29 OECD countries and 3rd in the G7.

Best Country: Estonia   Worst Country: Slovenia   Top G7: Germany   Bottom G7: Japan

Overall Rank and Final Words

In all of the indicators studied, Canada did relatively very well in some, and relatively very poorly in others. When it comes down to it, we are consistently average. Overall, we place 15th overall and 3rd in the G7.

If you get past the rhetoric of the Harper Conservatives, this makes sense, particularly our place in the G7. Germany and United States consistently outperformed Canada over this period, and they are very strong economies, as they have been for much of the post-Cold War era.

Combine this middling performance of Canada under Stephen Harper with his dismal performance compared to other post-war Canadian Prime Ministers, and his claim as an exceptional economic manager holds no weight. On only two of the indicators studied was Canada top of the G7, yet Conservative MPs and Stephen Harper himself repeat the phrase "top of the G7" countless times.

As is often the case when you evaluate claims of superiority by the Harper Conservatives, rhetoric once again does not match reality.

# How We Compare with Other Advanced Economies: Production Indicators

Production measures many different factors, but mostly looks at economic growth. Overall, Canada does better in this category than on labour indicators, but are noticeably underperforming specifically in export and trade variables.

Annualized Change in Real GDP

This represents total economic growth in countries, and Canada performs well here. But it is important to note that the real GDP does not take into account population growth. That will come later.

Canada performed relatively well here, besting 22 of the other 28 countries. And we were top of the G7 on this measure, the only measure studied for which Canada came out on top in the G7.

Best Country: Israel   Worst Country: Greece   Top G7: Canada Bottom G7: Italy

Annualized Change in GDP Per Capita

GDP per capita is often used as a surrogate measure of overall living standards. It is the total economic activity of a nation divided by the population of that country.

When population is taken into account, Canada fares worse than we do in the total GDP figures, but still relatively well. We place 9th overall, but of note, we are outpaced by our G7 partners in the United States, Japan, and Germany.

Best Country: Estonia   Worst Country: Greece   Top G7: Germany Bottom G7: Italy

This measure is obviously very important for the health of an economy. The dataset used is private non-residential capital formation. So it is basically expenditure in the economy that is not spending by households and it is not spending by government. It is companies spending money in the economy. The Harper Conservatives like to tout themselves as a government "open for business" that encourages business investment. Does their record hold up to that?

Here we're 7th overall, beat in the G7 only by the UK.

Best Country: Australia   Worst Country: Iceland   Top G7: UK Bottom G7: Italy

Annualized Change in Productivity

The influential publication The Economist states that productivity is "probably the single most important indicator of an economy's health. It drives real incomes, inflation, interest rates, profits, and share prices". It is a measure of how many dollars of GDP are produced in the economy per hour of labour worked, which as it increases presumably leaves room for improvements in living standards and increased leisure time.

Here Canada falls behind, down to 14th in the OECD. The United States surpassed Canada in this category in the G7.

Best Country: Korea   Worst Country: Norway   Top G7: US     Bottom G7: Italy

Annualized Change in Volume of Exports of Goods and Services

One thing Stephen Harper repeats over and over again is how many trade agreements he has supposedly finalized. If those trade agreements paid off over his time in office, we should see a substantial increase in exports of Canadian goods and services. As trade is so important to an economy's health and because the Conservatives promote their record on trade, the last three indicators of production focus on trade.

On this measure, Canada is abysmal compared to OECD partners. We are second last out of 29 advanced economies and last in the G7. So the rhetoric that we've improved our trading activity in Canada under Stephen Harper is simply false.

Best Country: Korea   Worst Country: Norway   Top G7: US     Bottom G7: Canada

Cumulative Change in Goods Trade Balance as % of GDP

The trade balance in goods would be the value of goods we export minus the value of goods we import. If we are exporting more, it is a positive balance. It is measured as a % of GDP to allow for fair comparisons between countries.

Again here Canada fares poorly. Our trade balance in goods as a portion of our economy has actually declined since 2006. We place 24th overall and 5th in the G7, ahead of the UK and Japan.

Best Country: Iceland   Worst Country: Luxembourg   Top G7: Italy     Bottom G7: Japan

Cumulative Change in Current Account Balance as % of GDP

The current account balance is a broader measure of Canada's economic interaction with the rest of the world. It is basically our exports of economic activity minus our imports of economic activity. If it is positive, we are net lenders to the world and if it is negative, we are net borrowers from the world.

Once again, as with trade balance, we fare poorly. Our current account balance as a portion of our economy has also declined since 2006. We place 24th overall and 6th in the G7, ahead of only the UK.

Best Country: Iceland   Worst Country: Norway   Top G7: US     Bottom G7: UK

Average Rank for Production Indicators

This is a tough one. If we look strictly at GDP, GDP per capita, business investment, and productivity, we average a rank of 10 out of 29. If we just look at the trade variables we average 25th out of 29.

Overall when you combine all of them, we average 14th out of 29.

Best Country: Korea   Worst Country: Greece   Top G7: US     Bottom G7: Italy

Conclusion

Overall, Canada's performance on economic growth over the last 10 years has been better than average, but not superlative. What is concerning is our lagging position in productivity and our incredibly poor performance in trade and economic activity with the world economy. Canada has often been touted as a "trading" nation. If that was once the case, the strength of that definition has certainly diminished under the Harper Conservatives.

# How We Compare with Other Advanced Economies: Employment Measures

As I mentioned in my introduction to this series, I'll be looking at Canada's performance compared to 28 other OECD advanced economies. In the first part, I'm going to evaluate our performance on a variety of employment measures. Voters talk about the economy, but the most personal and often most important issue to voters is jobs.

For all of the below graphs, Canada is in red, and the G7 nations are in green. All others are blue. If you click on the graphs, it will pull up a larger version.

Annualized Change in Total Employment

Total employment is simply the number of total jobs in the country. It doesn't account for population growth, but it is the number used by politicians when they talk about "total jobs" created.

Canada performed relatively well here, besting 20 of the other 28 countries. We were bested in the G7 by Germany. As we'll see from other measures, much of Canada's performance on this measure was due to population growth.

Best Country: Israel   Worst Country: Greece   Top G7: Germany   Bottom G7: Italy

Cumulative Change in Employment Rate

Employment rate is the number of people actively employed as a percentage of the working age population.

Canada performed poorly on this metric, with the employment rate dropping 1.5 points over the Conservatives time in government. In the G7 we were bested by the UK, France, Japan, and Germany. So even though total jobs increased better than many nations, the percentage of people in the working age population who were employed actually decreased over time.

Best Country: Germany   Worst Country: Greece   Top G7: Germany   Bottom G7: US

Cumulative Change in Unemployment Rate

The unemployment rate is not as straightforward as some might think. It's not the percentage of the population not working. To be counted as unemployed, you must be out of work, have actively looked for work in the last month, AND be available to work. So if you are of working age but are retired early, for example, so you aren't actually looking for work, you won't be counted as unemployed. So it is only those who wish to be working, but aren't currently, as a percentage of the working age population.

For this measure, obviously a decrease over time is better, which is in contrast to the other measures.

Best Country: Germany   Worst Country: Greece   Top G7: Germany   Bottom G7: Italy

Canada is in 11th, with a very slight increase in our unemployment rate over time. It has remained essentially unchanged since before the Conservatives formed government in 2006. We were bested in the G7 by Germany and Japan.

Cumulative Change in Labour Force Participation Rate

To understand participation rate, we need to first define what the labour force is. Statistics Canada defines it as the number of individuals over 15 who were employed or unemployed at a given time.

So labour force participation rate is the number of people who are either employed or without work but who are actively looking for work as a percentage of the working age population. It is the portion of the working age population who are participating in the labour market.

Best Country: Estonia   Worst Country: US   Top G7: Germany   Bottom G7: US

As you can see, Canada is in the bottom half on this metric. The size of our labour market as a portion of our working age population grew substantially less in the last 10 years than most other OECD nations and less than all G7 nations except the United States.

Cumulative Change in Under-25 Employment Rate

This is the same as the employment rate, but only expressed as a proportion of the population aged 15-24. This is an important metric because it shows how well new workers are being integrated into the workforce.

Best Country: Germany    Worst Country: Spain   Top G7: Germany   Bottom G7: Italy

This is just a bad picture overall. In the time period studied, only 5 OECD nations managed to grow the proportion of 15-24 year olds who were employed. Canada fell in the middle of the pack and fourth among G7 nations.

Cumulative Change in Full-Time Employment as a % of Total Employment

Full-time employment tends to be more stable employment and contributes to the overall job quality in a country.

Best Country: Norway    Worst Country: Greece     Top G7: US      Bottom G7: Italy

Again, the OECD as a whole fares rather poorly, with only 5 nations managing to increase full-time employment as a portion of the total over the last decade. Canada placed 11th and was behind 3 of our G7 counterparts. No data was available for Japan on this measure.

Cumulative Change in Permanent Employment as a % of Total Employment

Permanency of employment also adds to the job market quality in a country, as temporary work is by its nature precarious.

Best Country: Spain    Worst Country: Netherlands     Top G7: Japan   Bottom G7: France

Canada is in 12th, behind Germany and Japan in the G7.

Overall Rank

Finally, we'll look at the overall ranking of each nation for labour measures. Here all I did was averaged the rank of each nation within each of the 7 indicators. I then ranked those averages in ascending order. An average of 1 would be the best, as it means they were first in every single category. An average of 29 would be the worst, as it means they were last in every single category.

This allows us to get a picture of the consistency of each country's performance. If a nation is first in unemployment rate change, but last in everything else, that will show. Whereas if a nation is consistently in the top 5, it will likely rise to the top.

Best Country: Germany    Worst Country: Ireland     Top G7: Germany     Bottom G7: Italy

Canada placed 17th overall out of 29 OECD advanced economies and 3rd in the G7, behind Japan and Germany. Germany was the most consistent nation overall, being in the top 10 in all but one indicator, change in full-time employment.

Some will claim that our performance was hampered by the Conservatives being in a minority government, and that under the majority government of Stephen Harper from 2011 to present, our record has improved. Those people would be wrong. Our average rank would change by 1 point, which would still keep us in the lower half. And our position in the G7 remains unchanged.

Bottom Line

This shows that Canada's labour performance is not as strong as the Conservatives oft repeated "1.3 million net new jobs" statement would have one believe. On no measure was our performance over the period studied at the top of the G7. And overall, we rank in the bottom half of 29 nations. Yes, we've added lots of jobs. But given that the proportion of the working age population that have jobs has stagnated or declined, most of that is due to population growth. Youth employment has particularly suffered under the Conservatives, as has the permanency and full-time share of jobs.

Add that to the poor record of the Harper government compared to other post-war Canadian prime ministers, and rhetoric doesn't match reality.

# How We Compare with Other Advanced Economies: Intro and References

Much has been made of a study released by Unifor looking at the economic record of all post-WWII prime ministers. The conclusion was that Stephen Harper has the worst economic record of all prime ministers since WWII. This report was well done, although should be viewed with a critical eye, given Unifor is a large union, and not typically a group supportive of Harper.

In a future post here, I will review a similar study I did but with different measures than Unifor. I came to a slightly different conclusion. Basically Mr. Harper ends up middle of the road. The award for worst record won't surprise you.

Anyhow, in discussing this Unifor paper with some people on Twitter, a challenge was laid down by Aaron Wudrick of the Canadian Taxpayer's Federation. He argued (and it's a fair point) that it's unfair to compare prime ministers who ruled during different time periods. Instead we should evaluate how Canada fared under Harper compared to other countries. I decided to take up the challenge.

Mr. Harper frequently states that there was no better place to be in the last decade than Canada. To determine whether this is true, I used the same factors that Unifor looked at. The reason for this is twofold. First, it is a broad look at not only economic growth but productivity, employment, and debt. Second, the data is readily available through the OECD and IMF.

Instead of comparing us just to the G7 countries, I looked at all OECD members who are also classified as advanced economies by the IMF. Why? Two reasons. First of all, the G7 as a whole hasn't performed all that great in the last 10 years compared to many other advanced economies. But, and I think this is more important, technically, based on the percentage of the world economy, Canada is no longer in the top seven. We are now eighth behind Korea.

As well, the G7 as a whole represents 32% of the world economy, whereas this group of 29 advanced economies represents 41%. Focusing on the G7 only also leaves out some advanced economies that have GDP per capita similar to or higher than Canada, including Norway, Switzerland, Ireland, Netherlands, Sweden, Austria, Denmark, Belgium, and Finland.

But, just to avoid claims that I'm hiding data, I will also report the best and worst in the G7 for each data set.

Finally, with few exceptions, the comparisons will be based on change over time, as the raw figures aren't fair to compare. It isn't fair to compare Canada's raw GDP to that of the US, for example. As well, where it's applicable, the data I use is adjusted for inflation, in a common currency (usually USD) and, if available, purchasing power parity. This ensures that the comparison is a fair comparison between nations.

I'll release the comparison in three parts and wrap it all up into a summary in part three. Here are the indicators I'll evaluate.

1. Employment Indicators: Total employment, employment rate, unemployment rate, labour participation rate, under-25 employment rate, % full-time employment, and % permanent employment

2. Production Indicators: Real GDP, real GDP per capita, business investment, exports, and productivity

3. Debt, Deficit, and Distribution: Real net income per capita, real national disposable income per capita, social benefits and transfers in kind from central government, government debt-to-GDP, household debt, and government fiscal balance.

If you want more info on the specifics, including the references, see below. If not, check back over the next three days for each part. I hope it helps clear up for you how we've performed compared to our global partners since 2006.

References

Here is the list of 29 countries that I studied. Where a data set has less than 29 countries in it, I'll make note of it.

Australia Germany New Zealand
Austria Greece Norway
Belgium Iceland Portugal
Czech Republic Israel Slovenia
Denmark Italy Spain
Estonia Japan Sweden
Finland Korea Switzerland
France Luxembourg United Kingdom
Netherlands United States

Below is a list of all the data indicators as they are named in either the IMF or OECD databases. As well, I will talk in each post about Canada's average rank for each set of indicators. What I do here is I add up the ranks of each country for each separate indicator. So there are 7 labour indicators. Say Canada was #1 in each (which it isn't). The total score would be 7. All the countries are added up and then ranked from lowest to highest, lowest being the best. Their position in that ranking out of 29 countries is the score I give Canada. So if the total score of 7 was the lowest of 29, Canada would get a score of 1, because it is 1st out of 29.

As well, of note, I evaluated the annualized or cumulative change from 2005-2014. 2005 is the starting point in that it's the year I compare the 2006 numbers to in terms of change over the previous year. The Conservatives were in power in January of 2006, so I think it's fair to evaluate how that year compared to the previous year that they weren't in government.

Name Given Measure Data Set Source Countries Included
Total Employment Annualized Change Employment, Persons IMF 29
Employment Rate Cumulative Change Employment Rate, 15-64, All Persons OECD 29
Unemployment Rate Cumulative Change Unemployment Rate, 15-64, All Persons OECD 29
Participation Rate Cumulative Change Labour Force Participation Rate OECD 29
Under-25 Employment Rate Cumulative Change Employment Rate, 15-24, All Persons OECD 29
FT Employment as % of Total Cumulative Change Incidence of FTPT Employment OECD 27
Permament Employment as Share of Total Cumulative Change Incidence of Permament Employment OECD 26
Real GDP Annualized Change GDP, Expenditure Approach, Constant Prices, Constant PPPs, USD OECD 29
Real GDP Per Capita Annualized Change GDP Per Head, Constant Prices, Constant PPPs, USD OECD 29
Real Non-Residential Capital Formation Annualized Change Economic Outlook, Private Non-Residential Gross Fixed Capital Formation, Volume OECD 29
Volume of Exports of Goods and Services Annualized Change Volume of Exports of Goods and Services, Percent Change IMF 29
Labour Productivity Annualized Change GDP Per Hour Worked, USD, Constant Prices, 2010 PPPs OECD 29
Real Net Income Per Capita Annualized Change Net Income, Average Annualized Change of Single Persons and Married Couples OECD 25
Disposable Income Per Capita Annualized Change Net National Disposable Income, Constant PPPs OECD 25
Social Benefits and Transfers Annualized Change Social Benefits and Transfers in Kind, Per Capita, Central Government OECD 28
Net Debt as % of GDP Cumulative Change Central Government Net Debt, % of GDP IMF 23
Household Debt as % of Disposable Income Annualized Change Household Debt as % of Disposable Income OECD 21
Fiscal Balance as % of GDP Cumulative Change Revenue % GDP minus Expenses % GDP IMF 29

# E-15 Seat Projection

Here is my updated seat projection, current for trends up to October 4. There was significant movement in the polls again this week, with the Liberals trending upward, the Conservatives slightly down, and the NDP significantly down.

# Why Are We Selling Arms to Saudi Arabia?

The issue of Canada's selling of arms came to light in the French language leaders debate held last week on Radio-Canada. Bloc Quebecois leader Gilles Duceppe asked Stephen Harper why we don't stop selling arms to Saudi Arabia. Good question.

Saudi Arabia has a consistently poor human rights record. There are two specific cases currently raising eyebrows. Raif Badawi, an outspoken blogger, was sentenced by the Saudis to 1000 lashes and 10 years in prison for "insulting Islamic values and promoting liberal thought". Ali Mohammed al-Nimr was a protester in the Arab Spring protests in 2012, when he was 17 years old. He has been sentenced not only to beheading, but crucifixion as well.

When questioned on this, Mr. Harper essentially said that even though Saudi Arabia has a terrible human rights record, we won't cancel a \$15 billion arms deal with them because it would cause job losses. Not to mention that there are no assurances that Canada has monitored Saudi Arabia's human rights records appropriately nor whether we obtained assurances that the vehicles we are selling to Saudi Arabia will not be used against civilians.

As well, the contract was contingent upon the government not revealing too many details of the deal. The discomfort with this secrecy being breached was a possible deal breaker, so the prime minister himself wrote to Saudi Arabian leaders to assure them that aspect of the deal would be fulfilled. Secrecy in exchange for money in exchange for weapons.

There is an irony to Harper talking about the atrocities committed by ISIS and how we must fight against it, while turning a blind eye to the human rights atrocities committed by Saudi Arabia in order to do business. For example, Saudi Arabia beheaded more people up to August of this year than ISIS did. But is this just a one off deal with a nation with a poor human rights record, or is this a shift in foreign policy under the Harper Conservatives?

For this I turned to the Stockholm Peace Research Institute, which tracks movement of arms around the world. I looked at the sales of arms to countries by Canada from 1999 to 2013. Sales figures were adjusted for inflation to 2013 dollars.

Arms Sales to Countries by Human Rights Record

For this I went to the International Human Rights Rank Indicator. It ranks nations by their human rights record, with the 1st place country having the best record and the last place country having the poorest record. I broke all the nations into four quartiles. So the 1st quartile has the best overall human rights record and the 4th quartile the worst. I compared sales from 1999-2005 to sales from 2006-2013. This would be comparing sales under the Liberals to sales under the Harper Conservatives.

Arms sales have increased disproportionately under the Conservatives to the two quartiles of countries with the worst human rights records and have DECREASED to those nations with the best human rights records.

Arms Sales to Countries by Terrorism Risk

AON, an international insurance company, ranks nations in terms of the risk of experiencing a terrorist attack. They rank the risk from negligible to severe, which I numbered from 1 to 5. So 1 is the lowest possible terrorism risk and 5 is the highest possible terrorism risk.

So as you can see, under the Harper Conservatives, arms sales to nations with the HIGHEST terrorism risk have increased the most, whereas the nations with the lowest terrorism risk have seen declines in arms sales from Canada.

Arms Sales to Countries by Region of the World

The Middle East is currently unstable, at least the region in which Canada is engaged in a fight against ISIS. And the vast majority of Canada's arms sales still go to our NATO allies. But have we been increasing sales to our NATO allies or to nations in the Middle East, where we are joining in fights against security threats?

So under the Conservatives, in real terms, we have decreased our sales to our NATO allies and dramatically increased them to Middle Eastern nations.

Percentage of Total Sales

Now, to be fair, the problematic nations mentioned above (those with poor human rights records, high terrorism risk) still make up a small percentage of our total sales. Just to demonstrate this, I'll compare the percentage of total sales in each time period by category of country.

This gives a slightly better idea of the scale of the change. But it is still clear from this that sales of arms under the Conservatives have shifted significantly to certain nations, with human rights records that should concern us because of how those arms may be used and terrorism risks that should concern us because of the dynamic nature of global arms movement.

To get a sense of just how dynamic the flow of arms is around the globe, check out this map.

As mentioned above, there has been little confirmation from the Canadian government that they are taking the proper precautions and ensuring the arms we sell Saudi Arabia will not be used in the process of them violating human rights. Even if there were assurances, how do we confirm that they hold to that?

We could have been part of an international effort to do just that, but we decided to sit on the sidelines. The international Arms Trade Treaty was developed to establish criteria used to ensure that any exported arms are not used for human rights violations or war crimes. The Conservative government decided not to sign on to it, defending the decision on the grounds that it may impact lawful gun owners in Canada. But the United States, which has a gun lobby orders of magnitude larger and more powerful than Canada's, signed onto the treaty.

75 nations have ratified and signed the treaty. Another 50 have signed it and are awaiting ratification. 63 nations have done neither, and Canada is one of them.

In what kind of company is Canada by refusing to sign this treaty? Here are a few.

Afghanistan, Algeria, China, North Korea, Democratic Republic of Congo, Egypt, Ethiopia, Iran, Iraq, Jordan, Pakistan, Russia, Saudi Arabia, Somalia, South Sudan, Sudan, Syria, Uganda, Venezuela, and Vietnam.

Only SIX of the 63 nations are ranked as free nations by Freedom House. The vast majority are ranked as NOT free, with the remainder being classified as partly free.

Is this a group of which Canada wants to be a part?

Arming the Enemy?

Finally, the other reason we should be critical of this increase in arms sales to problematic areas of the world is because of the unpredictable and dynamic nature of arms movement in the world. Some may argue the Conservatives are justified in moving more arms to areas of the world with high terrorism risks (although that still wouldn't excuse our business with human rights violators). But that argument is predicated on the assumption that we can predict with 100% certainty where those arms end up and how they'll be used.

A few news stories demonstrate how tenous that assumption is.

1. Years ago, Qatar and Saudi Arabia sent funding and arms to Syrian rebel groups, with the ultimate goal of eliminating Bashar al-Assad. One of the groups receiving support in the past is now known as ISIS. A similar issue occurred when Saudi Arabia funded the Taliban to fight the Soviets in the 80s.

2. Problems continue even after they realized their mistakes. Saudi Arabia and Turkey have been providing support to a group that includes Jabhat al-Nusra, "an extremist rival to ISIS which shares many of its aspirations for a fundamentalist caliphate".

3. A large survey of ammunition fired by ISIS found that it came from multiple countries around the world, including roughly 20% of the shells originating in the US.

4. Another issue is the unpredictability of events in the region. The United States was backing the Yemeni president, Abed Rabbo Mansour Hadi. But then chaos broke out when a rebel group toppled the government. In the process the Pentagon stated they "lost track" of \$500 million in military equipment, including over a million rounds of ammunition.

5. ISIS has been found in the possession of sophisticated military equipment originating from both Saudi Arabia and the US. In some cases it is unclear how they obtained it, but in other cases it was likely taken when they overtook a region held by Iraqi forces, who are supplied by the US.

6. Then there is the omnipresence of corruption. The Atlantic reported that American arms were finding their way onto the black market and into the hands of ISIS via corrupt individuals in the Iraqi army.

If Canada is engaged in a fight with ISIS, in which our military is involved, why is OUR military not using the weapons manufactured by Canadian companies? If we are truly committed to this fight, why are we not equipping our forces to engage? Forces that we know and trust as some of the highest trained and most professional in the world?

Instead we are selling weapons to Saudi Arabia and other nations with deplorable human rights records for the sake of business. For the ability to campaign around Canada as a defender of Canadian jobs and the Canadian economy.

Stephen Harper boasts about his credentials on protecting Canadians security. But what if, through these massive arms deals and shipment of sophisticated military equipment to nations we can't trust, to a region with future events we can't predict, and into a conflict where today's Western supported rebels become tomorrow's ISIS, he is actually diminishing Canadian security?

There is a place for Canada in the fight against ISIS and what it represents. But that place should be alongside our allies with respectable human rights records, allies we can trust. As David Axe eloquently stated in an article on this matter, arming nations like Saudi Arabia in an effort to defeat a common foe "can be like sending weapons straight to the enemy".

(Update: This morning, there was a story in the National Post about Unifor, one of Canada's largest unions, telling the NDP to keep the Saudi Arabian arms deal "under wraps". Hopefully the NDP doesn't heed their advice. Where do we draw the line?)

# Seat Projections: E-20

20 days to go, and there appears to be some movement in the polls finally, albeit small.

The NDP seems to be dipping in Quebec, with the BQ and Conservatives picking up some support there. Time will tell if this movement continues to grow, or if we regress back to the mean over the next few days.

The Munk Debate on Foreign Policy took place last night and it was excellent. But it's hard to tell how many watched it or even heard about it. We should know by tomorrow with the Nanos daily tracking from tonight, whether it had an impact on polls. The last debate of the campaign is this week as well, the French language debate on the popular TV network in Quebec, TVA. By next Monday, the picture should be much clearer as to what we can expect over the final two weeks.

So, for what it's worth, with the above as a caveat, here are seat projections for this week. I've left the Greens off. I'm currently only projecting 1 seat for them, so when scaled against the other bars, you can't even see it. As well, this week the BQ is projected to obtain 1 seat.

# Seat Projections: E-29

29 days to go, and things are still clear as mud as far as polling goes.

The only discernible trend is a very gradual, yet persistent, upward trend for the Liberals. For the most part though, polls are just swinging back and forth within the margin of error. That is why I am basing my seat projection on trends, not what the polls say at a single point in time.

So, for what it's worth, with the above as a caveat, here are seat projections for this week. I've left the Greens off. I'm currently only projecting 1 seat for them, so when scaled against the other bars, you can't even see it.

# A Taxing Issue: Part 4

What are we getting for our money?

All I've written prior to this (here, here and here) is based on the assumption that lower taxes are better. That is not a universal opinion by any means. After all, taxes are necessary to pay for the services we receive. However, even if someone thinks that lower taxes are better, they most certainly would agree that getting more services for every dollar we give to the government is a good thing.

So I decided to look at that. First I looked at just direct program expenses and direct transfers to persons. I calculated how many dollars of those the government spent for every dollar of personal income tax and sales tax revenue it took in. Basically, for every dollar we give the government, how much do we get back?

As you can see, over time we've been getting less back from our government in programs and transfers for every dollar in tax we give them. Stephen Harper ranks higher only than Paul Martin and Jean Chretien (higher presumably being better because we get back more than we pay).

But what about direct transfers to governments? We can assume that if the federal government transfers money to a provincial government, we eventually benefit from that money. That is captured in the government's "Total Program Expenses" figure.

The pattern is much the same here, with us only getting more for our tax dollars under Harper than under Martin and Chretien, but still less than under previous prime ministers.

So what does all of this mean?

1. It is patently false that the Harper Conservatives are the lowest total tax federal government in Canadian history.

2. It is true that they are the lowest total tax federal government in the last 50 years, only if you measure total tax revenue as a percentage of GDP.

3. Corporate tax revenue has increased at a much slower pace than personal tax revenue.

4. We are getting less from our government for our taxes now than we have under each prime minister since 1967 except Paul Martin and Jean Chretien.

4. We are headed in the wrong direction. Allow me to explain.

When Stephen Harper lowered the GST in 2006, economists denounced the plan. It was dubbed a triumph of politics over economics. Why? Because data suggests that shifting the tax burden onto income taxes and away from consumption taxes has a negative effect on economic growth. If Harper was serious about growth and not just implementing policies that keep him in power, he would've raised the GST further, and reduced personal income taxes by the same amount.

Why not corporate taxes? The OECD paper I linked above does say that shifting the burden of taxes onto corporate income tax is likely the most deleterious to economic growth. However, we can't go much lower. We already have one of the lowest corporate tax rates in the OECD, bested only by Switzerland and Ireland.

If we raise the GST and bring personal tax rates down by the same value, the percentage of total tax revenue coming from personal taxes would draw closer to the historical average, and we can gain the economic benefits that economists suggest comes from shifting the tax burden away from income taxes and toward consumption taxes.

Finally, what this all says about Stephen Harper's tax record is really up to each individual. If you think the lower the taxes the better, no matter what, and you are happy with that reduction being measured as a percentage of the economy, versus how much each person pays, then he's your man. If you think corporations should pay a bit more and individuals less, he's probably not.

But hopefully it gives you more insight into this incumbent government's record on taxes than the oft repeated soundbite.

# A Taxing Issue: Part 3

We've already seen that Harper's government hasn't had the lowest personal or corporate tax revenue as a % of GDP. And we saw that their record of lowest total tax revenue as a % of GDP was mostly due to a decline in sales tax and customs import duties. But does the average Canadian voter care about what percentage of the economy their tax revenue represents? How much tax revenue is each person contributing to government coffers?

Obviously, as the economy has grown over time, there has been more revenue per person generated. So saying that every post-war Prime Minister except Paul Martin had lower per capita tax revenues than Stephen Harper isn't really fair. What is most interesting about this chart though is how much each type of tax has increased over time.

## Annualized Change in Tax Revenue Per Capita in 2013 \$ Since FYE 1949

Which brings us to our next point. How have governments differed in terms of what mix of tax revenue is collected? Over time, the portion of tax revenue coming from personal taxes has risen substantially, while the portion coming from corporate tax revenue has declined.

Since after the war, personal taxes have gone from making up 25-30% of total tax revenue taken in by the government, to making up almost 60% now. Corporate taxes, on the other hand, have gone from 20% of total tax revenue, to 16%.

On this, Harper fares poorly. He is tied with Jean Chretien for the prime minister under who personal taxes made up the largest average portion of total tax revenue.

But maybe there's been a consequent increase in government services per capita. That is to where we will turn our focus next.