As Canadians are becoming all too aware, the spectre of a recession, no matter the definition, looms large during an election campaign. Despite such prominence, the recent debate made it abundantly clear that none of the candidates understands why the economy stopped growing in the first half of the year and they have even less of an idea of how to foster future growth.

The roots of Canada’s economic problems (and thus any solutions) won’t be found in infrastructure spending, fiscal management or corporate taxes. Instead, the next government will have to contemplate what to do about a huge misallocation of capital that’s arguably unprecedented in the country’s history. Canada has put far too many of its eggs in the wrong basket – gambling on the massive development of a high-cost oil resource the rest of the world doesn’t need or want. Not long ago considered by the Harper government to be the engine of economic growth, oil sands production is no longer commercially viable in today’s glutted oil market. Tomorrow’s emissions constraints will make that even more true.

Oil sands operators have already shelved billions in planned investment. Indeed, the oil sector’s rapid implosion in spending is the principle cause of the oil-inspired downturn that’s caused the much-discussed economic contraction we’ve seen so far this year. And that doesn’t even take into consideration the future of the two million barrels a day of oil sands production that currently exists. The billions spent on that output is already gone and the jobs that depend on it may follow shortly.

It’s a reversal of fortune that’s already showing up in a broad array of fiscal and economic indicators from housing prices to provincial budget balances. Alberta, which until recently was accustomed to enjoying a string of multibillion dollar surpluses, is now facing a $6.5-billion deficit. In contrast, Ontario and Quebec, which saw deficits balloon, will see the clouds part and the sun begin to shine on their economies with a warmth that hasn’t been felt in years.

Whether the country’s shifting economic fortunes will end up being the deciding factor in next month’s election remains to be seen. Regardless of the outcome, however, it’s certain that the party forming the next government will end up presiding over a very different Canadian economy than the one the Harper regime spent the last decade trying to mould.