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Page last updated at 11:27 GMT, Monday, 13 October 2008 12:27 UK

Economy woes shake up Canada poll

By Lee Carter
BBC News, Toronto

The world seemed like a much simpler place just over a month ago, when Canada's Prime Minister Stephen Harper, called an early federal election for 14 October.

Canada's Conservative PM Stephen Harper (right) campaigns for the 14 October election
Mr Harper's gamble on calling the election early may not pay off

The Conservative leader had high hopes of increasing his party's number of seats in the country's House of Commons in Ottawa and transforming his minority government status into a majority.

At the time of the election announcement, the economy and fears of a possible recession already led the agenda.

But with Canada among the most prosperous countries in the G7, enjoying a healthy budget surplus, Mr Harper was more than confident that he could fight an election based on his reputation for prudent economic stewardship.

Instead, the campaign was abruptly shaken up by the global economic crisis, which also immediately became the dominant issue.

Although Canada's financial institutions and housing market have been spared the kind of carnage seen just across the border in the United States, the main stock markets still plunged, threatening personal savings and investments.

Derision

Mr Harper, a reserved man known more for his strategic skills than his personal warmth, has come under sustained criticism from all sides for his handling of the crisis and he himself now concedes that he will be lucky to receive that parliamentary majority.

He initially brushed aside calls for special measures to help the economy, at one point advising Canadians that there were stock-buying opportunities to be had.

Voters give their views ahead of Tuesday's general election

He also accused the opposition parties of spreading panic and fear and poured derision on plans he characterised as spending their way out of a crisis.

He insisted that the fundamentals of the Canadian economy remained strong and promised fiscal responsibility.

"Let me perfectly clear. A Conservative government will not be raising taxes… we will not cancel planned tax reductions for business. We will not be running a deficit. We will be keeping spending within our means," he declared in a campaign speech in Toronto.

"There's no way the prime minister should start panicking during a stock market fall, or should start making up a new economic policy in the middle of a campaign."

On Friday, Canada's Finance Minister, Jim Flaherty, attempted to ease the tightening credit crunch with a CAN$25bn ($21bn; £12.5bn) asset-swap between the country's major banks and the government-owned national housing agency, a deal that Mr Harper insisted did not amount to a US-style bank bailout.

Miscalculation?

Sean Durkan is an Ottawa-based media consultant and the former-bureau chief for Canada's largest newspaper chain. He says that despite the last-minute action, Mr Harper may have largely miscalculated his response to the crisis.

"The opposition now has an issue they can coalesce around instead of going off on all different tacks," he said.

"It's not just the question of can he manage the economy, over which there's a big question mark now, but whether he can manage it in a way that really shows he cares for ordinary Canadians and I think he really loses on that too."

Mr Harper's principal opponent is the Liberal leader Stephane Dion.

Before the financial crash, the main part of Mr Dion's platform was his revenue-neutral Green Shift plan, which proposed taxing polluting companies, whilst offering tax breaks to individuals.

Liberal leader Stephane Dion campaigns on 12 October
Mr Dion accused Mr Harper of lacking an economic plan

Since the financial crash, Mr Dion has modified the way he promotes the plan.

He has also had to concede that some of his more ambitious and expensive promises, including increased spending on childcare and on Canada's publicly-funded healthcare system, may have to be delayed because of the financial crisis.

The Liberal leader, a French speaker from Quebec, has been criticised throughout the campaign for his faltering English and a perceived lack of leadership skills.

Unlike previous French Canadian Liberal party leaders, such as the feisty Jean Chretien, who led the party to three straight majorities in the 1990s, Mr Dion has failed to connect with English Canadians.

'Old song'

However, in the immediate aftermath of the financial collapse, the Liberals did enjoy a surge in the polls as the focus turned on the Prime Minister's handling of the crisis.

Mr Dion and the other opposition leaders accused Mr Harper of lacking a plan to combat the meltdown.

"Stephen Harper is saying laissez-faire I don't care. He's singing that old song, don't worry, be happy," Mr Dion said in Toronto last week.

The three smaller parties, the New Democrats, the Greens and the Quebec-only Bloc Quebecois, all made similar attacks on the prime minister, while offering their own rescue plans.

CANADA'S MAIN PARTIES
Jack Layton, New Democrats; Prime Minister Stephen Harper, Conservatives; Gilles Duceppe, Bloc Quebecois; Elizabeth May, Green Party; and Liberal leader Stephane Dion pose for photographs before the French language debate
Conservative Party: Elected 2006, led by Stephen Harper. Had 127 of 308 seats in parliament
Liberal Party: Led by Stephane Dion. Governed Canada 1993 - 2006. Had 95 seats
New Democratic Party: Led by Jack Layton. Had 30 seats
Bloc Quebecois: Led by Gilles Duceppe. Has candidates only in Quebec. Had 48 seats
Green Party: Led by Elizabeth May. Never won Parliamentary seat but independent MP joined day before election called. 1 seat

Both the Greens and the New Democrats have seen their fortunes rise in the polls, as the left-of-centre vote becomes increasingly fractured.

Sean Durkan says the Conservatives have lost critical votes in French-speaking Quebec. This is partly a response to off-the-cuff remarks by Mr Harper aimed at Quebec's cultural elite while he was responding to questions about government cuts to the arts.

"In Quebec, culture is hugely important, not just for the chattering classes, but as a statement of who they are and preserving their humour, literature, TV and so on," said Mr Durkan.

But most issues have now been placed in the background by the perilous state of the country's economy.

Mr Harper is the first G7 leader to face an election since the global stock market turmoil and how he fares will be watched with interest by other countries.

Over the weekend, opinion polls offered bewilderingly differing results. An Ipsos-Reid survey released on Saturday put the Conservatives at 34% with the official opposition Liberals at 29% and the left-of-centre New Democrats at 19%.

But a Harris-Decima poll, also released on Saturday, placed the Conservatives in majority territory at 35%, 10 points clear of the Liberals, a gap that had more than doubled in four days.

The five party leaders are expected to campaign right up until Monday night.

Polls open on Tuesday morning. Canadian electoral laws forbid reporting of results until all the polls have all closed across the country's six time zones.




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