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Canada: Harper On The Ropes As Growth Falters, Elections Grow Near

September 30, 2015
Originally published in Global Finance Magazine

Against the backdrop of a lackluster economy, Canadian voters will head to the polls on October 19—and it’s no shoe-in for incumbent prime minister Stephen Harper.

The Conservative Party PM, who has held the post since 2006, faces credible challenges from both Justin Trudeau, leader of the Liberal Party and son of beloved former PM Pierre Trudeau, and Thomas Mulcair of the New Democratic Party (NDP).

As a result, the 2015 federal election is shaping up to be “the most interesting election I’ve seen in many years, with the candidates really neck and neck,” says Christopher Adams, a political scientist at the University of Manitoba’s St. Paul’s College. “The consensus among observers is that we will have a minority, not majority, government and the question is which of the two parties will form it.”

The campaign, the longest and possibly most expensive in the country’s history, is not taking place at the best of economic times. “National GDP contracted for the first five months of 2015,” says Randall Bartlett, a senior economist with TD Economics in Toronto. “In May, it shrank in 13 of 20 sectors, which begs the question of whether we might actually be in a recession.”

Oil prices that have more than halved since the summer of 2014 and a weak first quarter in the US this year have certainly contributed to Canada’s woes, as the country is heavily reliant on the energy sector and on US exports.

According to Bartlett, however, there is hope for a speedy recovery. “We believe that a framework has been created for positive economy growth,” he says. “There are indications that a virtuous cycle is starting, but we are only getting the first glimpses of it.”

Things can’t turn around quickly enough for Harper. As the incumbent, he is coming under pressure for the poor state of the economy. Nevertheless, he continues to defend his record.  The main thrust: Harper contends that, under his and his party’s watch, Canada was able to navigate the 2008 global financial crisis more successfully than other developed countries. “His message is, we are handling economic challenges better than the other parties possibly could,” says Adams.

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