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Harper Majority Threatened by Layton Surge in Canada Polls

Canada's New Democratic Party Leader Jack Layton
Jack Layton, leader of the Canada's New Democratic Party. Photographer: Norm Betts/Bloomberg

Voting has ended in most of Canada in today’s general election, the fourth in seven years, in which Prime Minister Stephen Harper is seeking his first majority government and New Democratic Party leader Jack Layton aims to ride his surging popularity to become the leader of the opposition.

While Harper’s Conservatives have led every poll since the vote was called March 26, their support flattened in the past week while the NDP has risen at the expense of the Liberals and Bloc Quebecois. That increases the possibility that Harper will again be denied the majority that eluded him in 2006 and 2008.

Canada’s dollar fell against 13 of 16 major currencies in April amid concern the NDP may end up with a share of power, or create gridlock for a Conservative minority government. At stake are tax reductions worth C$6 billion ($6.3 billion) annually for businesses such as Toronto-based Bank of Nova Scotia, which both the NDP and the Liberals have pledged to reverse.

“The uncertainty is the wild card,” said Craig Wright, chief economist at Toronto-based Royal Bank of Canada. “The range of outcomes is pretty wide.”

Polls suggest the likeliest outcome is that Harper, in power since 2006 and leader of his party since 2003, will win his third consecutive minority government. The Conservatives had 37 percent support among decided voters, according to a CTV/Globe/Nanos tracking poll published May 1. That’s down from a campaign high of 42 percent on April 4.

Campaign Moves

The NDP had 32 percent support, a gain of 12 percentage points from the first poll of the campaign. The Liberals had 21 percent, down from 29 percent. The Bloc Quebecois, which supports separation from Canada and only runs candidates in the French-speaking province, fell to 5.7 percent from 9.1 percent. The telephone poll, taken April 30 and May 1, surveyed 1,200 eligible voters and has a margin of error of 2.8 percent.

In the 2008 election, the Conservatives won 143 seats with 38 percent of the vote, the Liberals took 77 seats with 26 percent of the vote and the NDP won 37 seats with 18 percent.

A Harper majority is possible if NDP support softens and the Conservatives do better than predicted in Ontario, the largest province. Rising NDP support can help the Conservatives in Ontario, where their main rival in most districts is the Liberals. It can hurt Harper’s party in western provinces such as British Columbia and Saskatchewan where the NDP is the main opponent.

As his poll numbers plateaued and the NDP’s rose in the past week, Harper turned his focus to Layton’s party, saying its economic policies offered the clearest reason why Canadians should elect a majority Conservative government.

‘Lot of Destruction’

Harper has said the NDP’s platform, which promises C$68.9 billion of new spending, will create a “lot of destruction” for the economy because it would increase corporate tax rates and implement a cap-and-trade system for carbon that would boost the price of gasoline.

“What is the alternative, what exactly would an NDP government look like?” Harper told supporters at a rally in Prince Edward Island yesterday. “An NDP government means higher gas prices, smaller paychecks and a weaker economy.”

Harper, 52, oversees the fastest growing economy with the lowest deficits among Group of Seven nations. The currency has been the strongest in the G-7 over the past two years. Government bonds have returned 5.5 percent over the past year as of April 30, according to Bank of America Merrill Lynch index data, compared with a 2.9 percent average for the G-7.

Won’t ‘Unnerve Markets’

“If the Conservatives stay in power I don’t think it will unnerve markets,” Royal Bank’s Wright said.

Harper finished his campaign today in Calgary, where the constituency he represents in Parliament is located, after travelling across the country from Prince Edward Island to British Columbia yesterday.

Layton, 60, who closed his campaign in Toronto today, has defended his economic policies by saying he would provide a stable environment for business. He also has had to fend off attacks that he would threaten the independence of the Bank of Canada after Reuters reported him as saying he wanted the central bank to keep interest rates low.

As well, Layton had to respond to newspaper reports that police cautioned him after he was found naked in a massage clinic in 1996. Layton, who was not charged in the incident, called the reports a “smear.”

Liberal leader Michael Ignatieff, 63, spent the final hours of the campaign in Ontario in constituencies where his party is in close contention with the Conservatives and NDP.

Polling hours are staggered across six time zones. Voting began in the eastern province of Newfoundland at 8:30 a.m. (7 a.m. New York time), and closes in the western province of British Columbia 15 hours later. Polls in Atlantic Canada closed at 7:30 p.m. New York time, and will close at 9:30 p.m. in five other provinces, including Quebec and Ontario. Polls in British Columbia close at 10 p.m.

About 24 million Canadian voters are eligible to vote in the country’s 308 constituencies. Every seat in the House of Commons is up for election. More than 2 million people have already cast ballots in advance voting that took place April 22 - April 25, an increase of 34 percent from the last election in 2008, the country’s elections agency said last week.

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