Harper Calls Oct. 19 Election as Canada’s Economy Struggles

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Stephen Harper
Canada's prime minister Stephen Harper. Photographer: Patrick Doyle/Bloomberg

Prime Minister Stephen Harper fired the starting gun early on Canada’s election campaign amid polls showing his Conservative government’s nine-year reign is threatened by a leftist party that’s never held power nationally.

Harper, 56, met with Governor General David Johnston, Queen Elizabeth II’s representative in Canada, on Sunday morning. He requested the dissolution of parliament and formally began campaigning for an Oct. 19 vote, making it the longest electoral contest since 1872.

“Now is most certainly not the time for higher taxes, reckless spending and permanent deficits,” Harper told reporters at Ottawa’s Rideau Hall. “Now is the time to stay on track, now is the time to stick to our plan.”

The incumbent prime minister faces the toughest fight of his political life after almost a decade in power, as an oil shock ransacks the economy and voters grow increasingly weary of his government. Polls show Harper’s Conservatives in a tight three-way race with the left-leaning New Democratic Party and the centrist Liberals.

The narrow contest suggests Canada is poised return to a minority government, in which no party can unilaterally push through its agenda and elections are more frequent. It would be the country’s fourth minority government in the past five elections.

Early Start

However by starting the campaign early, Harper -- whose Conservatives have continued to easily outpace their opponents in fundraising -- may tilt the scale in his favor. “The government is trying at this stage to line up clearly as many advantage touch points as possible,” said John Wright, managing director of polling firm Ipsos Reid.

Polling suggests Harper’s biggest challenge will come from the New Democrats, Canada’s official opposition party with the second highest number of seats in the House of Commons. The NDP was averaging 32.6 percent of popular support, ahead of the Conservatives at 31.6 percent and the Liberals at 25.6 percent, according to national averages compiled July 28 by polling aggregator ThreeHundredEight.com for the Canadian Broadcasting Corp.

Led by Tom Mulcair, 60, the NDP got a lift in recent weeks from a historic victory in the May 5 Alberta provincial election. The labor-friendly party, in its first win in the province, ousted the Progressive Conservatives, which had governed since 1971.

NDP Challenge

For voters seeking change federally, the New Democrats also represent the clearest policy shift from Harper. They’ve signaled they will increase corporate taxes to fund new universal programs such as a national daycare system.

The party -- which has removed references to socialism from its constitution but remains a member of Socialist International -- became the official opposition for the first time in 2011, only to see then-leader Jack Layton die that year. Mulcair, a Quebec MP and former provincial Liberal environment minister, won the race to replace him.

The Liberals, led by Justin Trudeau, were ahead in polls for much of the past two years, but have sagged in recent months with the NDP the main beneficiary. The 43-year-old son of political icon Pierre Trudeau is seeking to become Canada’s second-youngest prime minister. However he’s been hampered by miscues and a barrage of Conservative attacks saying he isn’t experienced enough to govern.

Weakened Liberals

Harper chiseled into the Liberals’ electoral dominance over four elections to the point where the party -- urban-centered, socially liberal and advocating a larger role for government -- was reduced to a rump in the House of Commons.

In a country dominated by Liberal governments for most of its history, victory would give Harper the opportunity to finish enacting a program that has included cutting federal taxes as a share of output to the smallest in more than 50 years, shrinking the size of government and streamlining approvals for resource development.

His administration has broken from past governments by pulling out of the Kyoto climate-change treaty, emphasizing law and order to the point of clashing with the Supreme Court, and promoting an uncompromising foreign policy in favor of Israel and Ukraine. On the global economic stage, Harper has joined with German Chancellor Angela Merkel and U.K. Prime Minister David Cameron in a budget austerity alliance within the Group of Seven. It’s a record Australian Prime Minister Tony Abbott has called a “guide” to center-right parties around the world.

Economic Woes

The election campaign comes amid an economy ravaged by falling crude oil prices, undermining Harper’s long-held advantage over rivals as a strong steward of the economy. Damage from a drop in crude oil prices widened in the last few months while a rebound in exports failed to materialize, leading the country’s central bank to cut interest rates for a second time in July and predict a contraction in the first half of this year.

Canada’s currency has lost more than 20 percent against its U.S. counterpart over the past two years, and is now trading at the weakest level in more than a decade. Canada’s benchmark S&P/TSX Composite Index is down 4.9 percent over the past year, compared with a 9.3 percent gain for the S&P 500.

Harper was re-elected twice after coming to power in 2006. A win in October would make him the first prime minister in more than a century to win four consecutive elections, having already engineered the longest reign for a Conservative leader since the 19th century. A victory would also put him on pace to finish among Canada’s five longest-serving prime ministers.

The state of the economy is raising questions about whether Harper can achieve his pledge to balance the budget this year, a major blow to the credibility for a government that has put fiscal rigor at the heart of its campaign.

High-Water Mark

It’s a far cry from the start of the 2011 election campaign that began with Harper well ahead in the polls and his government overseeing the fastest growing economy with the strongest currency in the G-7 and an outperforming stock market. In his first appearance in that campaign, Harper urged voters to preserve the “closest thing” to a global haven.

That election, in which Harper won his first majority mandate amid a collapsing Liberal vote, is proving to be a high-water mark for him. The Conservatives won 166 of the 308 seats in the House of Commons in 2011, compared to 103 for the NDP, 34 for the Liberals, four for the separatist Bloc Quebecois and one for the Green Party.

Some 30 new electoral districts have been created since then. A party must now win 170 of the 338 seats in the House of Commons to secure a majority.

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