Monday, February 25, 2008

Canadian PM Harper Seeks to Force Election Before Economy Worsens

Harper Seeks to Force Election Before Canadian Economy Worsens

By Theophilos Argitis

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Canadian Prime Minister Stephen Harper's minority government is trying to goad opposition parties into triggering elections before an economic slowdown undermines his Conservatives' chances of winning.

Harper has scheduled votes starting this week on the federal budget and a plan to extend a military mission in Afghanistan, any of which would force an election if rejected. The government survived one such vote on Feb. 12, after lawmakers from the biggest opposition party, the Liberals, called it a ``trick'' and walked out of the legislature.

Current and former Liberal officials are urging leader Stephane Dion to avoid taking Harper's bait. The worse the economy gets, the easier it will be to campaign against Harper on that issue, they say.

``Mr. Harper clearly wants an election before the economy catches up with him,'' said Steven MacKinnon, a former national director for the Liberals. ``Mr. Dion must carefully weigh what the best timing is, and I tend to be more in the camp that time is his friend.''

The central bank says growth in the world's eighth-biggest economy will slow to 1.3 percent in the first half of 2008, compared with 3.7 percent in the same period last year, as Canada feels the effects of malaise in the U.S. Only 25 percent of Canadians expect the economy to improve this year, compared with 49 percent in November, according to a Feb. 13 survey by Nanos Research.

Confidence Votes

Exports to the U.S. are falling and the central bank may be forced to cut its economic forecast and key lending rate again after trimming both last month.

The government is scheduled to release its annual budget tomorrow at 4 p.m. Ottawa time, triggering at least three votes before the second week of March. Defeat on any budget vote would be taken as a lack of confidence in the government and force elections.

Debate on Afghanistan is set to begin today, and the government has said it may let opposition parties introduce motions on other issues this week, opening more avenues to topple Harper.

With 126 members, Harper's Conservatives are 29 short of a majority in the 308-seat House of Commons and need support from at least one opposition party to pass legislation. The New Democratic Party, with 30 seats, and the separatist Bloc Quebecois, with 49, have expressed doubt that they will vote for the budget without committing to oppose it.

Infrastructure Funding

Dion said he needs to see the budget before making a decision, though he indicated last week he may choose to avert an election. The Liberals, with 94 seats, want Parliament ``to work,'' he told reporters Feb. 19 in Montreal. The party has called for increased infrastructure funding and aid for manufacturers suffering from a stronger Canadian dollar.

``The more of the things that we want in the budget they have in the budget, the more likely we will be to support it,'' John McCallum, Liberal leader for finance issues, said by telephone.

The budget probably won't contain any significant tax cuts or spending increases because the surplus is narrowing as the economy slows, and the government already approved C$60 billion ($59 billion) in tax breaks last year, Finance Minister Jim Flaherty has said.

Most polls show Harper leading, causing some Liberals to question the wisdom of fighting a campaign, especially given that the party is short of funds.


The Conservatives have support of 36 percent of voters, against 29 percent for the Liberals, according to a Feb. 16 poll of 857 people by Ipsos-Reid. The poll had a margin of error of 3.35 percentage points. A Strategic Counsel poll released last week had the Conservatives at 39 percent, short of the 40 percent threshold typically needed to secure a majority of the House's seats.

Canada's Liberal Party walked out of the House chamber on Feb. 12 after refusing to vote on a crime bill that the government made a matter of confidence.

``Their motion is a trick to provoke an artificial crisis and we're simply not going to play their game,'' Ralph Goodale, the Liberals' leader of House operations, said after leading his colleagues out.

The Liberals -- in power 13 years before losing to the Conservatives in January 2006 -- are changing their fundraising to comply with a law passed in December 2006 that banned corporate donations.

Campaign Debt

The Liberals' coffers were emptied during a party leadership race that tapped out contributors and left candidates in debt. As of June, Dion owed almost C$300,000 related to that campaign, according to Elections Canada.

The Conservatives raised C$17 million from donors last year, more than triple the Liberals' C$4.9 million.

Harper, 48, has tried to portray himself as a leader who won't shy away from tough decisions, using his party's war chest to attack Dion, 52, as weak and indecisive through television ads and Web sites such as .

Once a campaign starts, there will be limits on how much the Conservatives can spend, and Dion will get equal media coverage. A campaign also might muzzle dissent in Dion's party that persists 15 months after he became leader.

``He probably wants an election behind him to have more authority within the party,'' said Antonia Maioni, director of the McGill Institute for the Study of Canada in Montreal.

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