Economy Takes Center Stage as Harper Starts Canada Election

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Stephen Harper
Canadian Prime Minister Stephen Harper. Photographer: Patrick Doyle/Bloomberg

Prime Minister Stephen Harper began Canada’s longest election campaign in more than a century by touting his economic stewardship as his main rivals jockeyed to be seen as the best agent of change.

The incumbent Conservative leader fired the starting gun early on Canada’s 42nd election campaign Sunday morning, meeting Governor General David Johnston, Queen Elizabeth II’s representative in Canada, to request parliament be dissolved. The visit marked the formal start of campaigning for an Oct. 19 vote, with polls showing Harper’s nine-year reign being threatened by a leftist party that’s never governed the country.

“A national election is not a popularity contest,” Harper, 56, said outside Ottawa’s Rideau Hall. “Canadians will make a serious choice between proven, real-world experience and a dangerous approach that has failed before and is failing in other countries.”

The Conservatives are locked in a three-way race with the left-leaning New Democratic Party and the centrist Liberals. If Harper wants a campaign on fiscal stewardship, both his opponents appear set to oblige him as output has contracted for five consecutive months, with some private-sector economists saying Canada has fallen into recession.

Opposition Attacks

NDP Leader Tom Mulcair, 60, whose party has never held power in Ottawa but won a historic victory in the oil-producing province of Alberta this spring, began his bid to unseat Harper by assailing the prime minister’s economic record.

“I’ve heard the calls for change grow louder and it isn’t difficult to see why -- wages are falling, incomes are stagnant and household debt is skyrocketing,” Mulcair said in Gatineau, Quebec. “Clearly Mr. Harper, your plan isn’t working.”

Liberal Leader Justin Trudeau, the 43-year-old son of political icon Pierre Trudeau who has faced a barrage of Conservative attacks saying he isn’t experienced enough to govern, took a similar tack. With Canada’s manufacturing sector still struggling to recover from the 2008-2009 financial crisis, he said the middle class has sagged under the current government.

“Stephen Harper’s plan has failed our country,” Trudeau said in Vancouver. “We are working harder and harder to make ends meet and falling farther and farther behind.”

‘Temporary Effects’

Harper continued his economic message Monday, announcing C$60 million ($45.6 million) in annual tax incentives for businesses that hire apprentices and dismissing the oil shock as a temporary setback.

“We all knew that with lower oil prices, lower resource prices, there are going to be some temporary effects in some sectors of the economy,” Harper said, adding his government is “optimistic about the turnaround that everybody is expecting” despite the slump.

“That is not a reason to ditch a plan that is working and to start to embark on out-of-control spending, tax hikes and spiraling deficits,” Harper said in Laval, Quebec. “We know where that takes us. It’s a time to stick to our plan.”

A poll released Sunday by Ottawa-based Nanos Research Group showed 32 percent of respondents supporting the Conservatives, with the NDP at 30 percent and Liberals at 29 percent. Those results are roughly in line with national averages compiled last week by polling aggregator ThreeHundredEight.com for the Canadian Broadcasting Corp.

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

Early Start

However by starting the campaign early, Harper -- whose Conservatives 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.

The campaign, which at 79 days is Canada’s longest since 1872, comes amid a string of grim economic news. 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. Harper’s long-held advantage over his rivals on economic stewardship took a hit as a result.

Economic Woes

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. A victory would also put him on pace to finish among Canada’s five longest-serving prime ministers.

However 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 of a government that has put fiscal rigor at the heart of its campaign.

Mulcair, who took aim Sunday at Harper’s record of seven consecutive deficits, pledged to create jobs by “actively championing our manufacturing sector” and to boost the economy with a C$15-per-day daycare program the NDP argues will help more parents enter the workforce.

Trudeau, meanwhile, targeted both Harper and Mulcair. The Liberal leader said his NDP rival’s proposals -- such as a C$15 minimum wage for federally regulated workers -- are “empty promises,” a signal the Liberals are shifting focus after losing ground to New Democrats over the past few months. “The NDP would put the brakes on the economy at the worst possible time,” Trudeau said.

The long campaign is starting slowly. With Monday a holiday across much of the country and a debate scheduled Thursday in Toronto, none of the leaders launched an airplane tour and none has unveiled a full platform.

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