Global Insight Perspective

Significance

It is hoped the 23 January election - the second in 18 months - will bring to an end a damaging period of political upheaval in Canada.

Implications

When the election was called it seemed the Liberals would squeak home once more, but instead Conservative leader Stephen Harper has engineered a surprisingly effective image makeover. The Conservatives have worked hard to play down their right-wing credentials and present themselves as a government-in-waiting.

Outlook

All recent polls predict a Conservative win, and the party may even achieve a prized outright majority. If it falls short of this it faces some agonising decisions over whom to strike alliances with and how far it can afford to compromise.

Latest Polls

After 12 years in opposition the Conservatives must have begun to doubt they could ever return to government. Even a major patronage scandal that engulfed the ruling Liberals only marginally lifted their fortunes. However, in recent weeks there has been a remarkable turnaround. The latest Strategic Counsel poll for the Globe and Mail newspaper gives the Conservatives 40% support, way ahead of the Liberals on 27%. Previous polls showed the Conservatives ahead, but the gap is widening rapidly. This poll was no one-off, moreover, as the latest Ekos Research poll for the Toronto Star and La Presse shows the parties on 39% to 28%. If these results are repeated in the general election, the Conservatives may even manage a prized outright majority of 155 seats or more. This would make their lives much easier in government and should bring to an end Canada's damaging political instability. A last-minute revival by the Liberals cannot be ruled out altogether, with polls suggesting some 15% of voters remain undecided, but this is very unlikely to hand them victory. 

If the Conservatives fail to win an outright majority, the performance of the smaller parties suddenly becomes critical. They are the left-wing New Democratic Party (NDP) and the separatist Bloc Québécois (BQ). The latest polls give the NDP between 16% and 19%, while the BQ has around 11% support. Neither would make attractive bedfellows for the Conservatives, the former on account of their strong ideological differences, and the latter on account of distaste for Quebec separatism. There is an outside chance that the Greens could secure their first Commons seat, although their support is below 6%.

Conservative Makeover

The Conservatives' new ascendancy represents a remarkable turnaround in the space of a few weeks. The party has long struggled to make inroads into the vote-rich liberal heartlands of Canada, unable to shake off a bad image problem. Formed in 2003 from a merger of the Canadian Alliance and the Progressive Conservatives, the party has been seen as 'nastily right-wing' by many. It was the Alliance's leader, Stephen Harper, who came out on top in the merged party, and he is very much on the party's right. Harper initially failed to gain much personal popularity, and Prime Minister Paul Martin managed to play on this successfully. However, Harper's performance in the campaign has helped moderate his image and there is now a real sense of momentum. Indeed, two of the country's most respected newspapers - the Toronto Star and the Globe and Mail - have come out in favour of the Conservatives. There are strong signs that 'Atlantic Canada', where the Conservatives have always trailed the Liberals, is warming to the idea of change at the top. Harper has lately pointed to his plans to increase military presence in the region, to cede more control over oil and gas revenues, and to undertake measures regarding fisheries that should benefit the area. 

Outlook and Implications

The Liberals have been trying to scare Canadians in recent days with warnings that the country's enviable prosperity should not be taken for granted. There have been eight consecutive budget surpluses under the Liberals, and national debt and unemployment have fallen impressively. There is indeed a risk that the Conservatives could undo the Liberals' good work, but from what has been said so far it seems economic policy will change little in reality. The Liberals argue that their opponents' fiscal plans are unaffordable, but the Conservatives are hardly known for their largesse. Latest polls suggest that the Liberals' attacks on the Conservatives' credentials are indeed having little impact. There is a widespread sentiment among voters that it is time for a change of personnel at the top, after the Liberals' scandals revealed complacency and possible corruption. Even some Liberals supporters believe that their party would benefit from some time out of the limelight to allow itself to recover and rebuild its reputation. There is also little enthusiasm for another minority government, with 55% of voters in the Globe and Mail survey saying that they believe an outright Conservative majority would be a healthy outcome. The New Democrats are urging those Liberals who dread such an outcome to vote tactically for them and clip the Conservatives' wings. All players will be analysing the seat arithmetic very nervously once the results start coming through.

Contact: Raul Dary

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raul.dary@globalinsight.com

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