Conservatives poised to govern Canada from political center

Canadians on Monday elected a minority Conservative government led by Stephen Harper. The Conservative victory ends 13 years of Liberal rule but does not represent a mandate for significant policy change.

Canadians on Monday elected a minority Conservative government led by Stephen Harper. The Conservative victory ends 13 years of Liberal rule but does not represent a mandate for significant policy change.

The Harper administration will focus on government accountability, justice issues, tax reform and federal-provincial relations in an effort to capture a majority in the next election.

The election signals a major shift in Canadian politics. It marks the emergence of the Conservatives — formed as a result of a merger between the former Alliance and Progressive Conservative parties in 2004 — as an alternative to the Liberal party in forming a national government.

Voter support for the Tories had risen steadily since the election was called in late November. The party ran a disciplined campaign, focused on a few policy priorities and benefited from the political scandals that plagued the Liberal government of Paul Martin. In the election, the Conservatives won 36 percent of the popular vote and 124 of the 308 seats in the federal House of Commons. (Although recounts will be held in a small number of seats, they will not threaten the Conservative minority.)

Until now, the Conservatives have drawn their support mainly from western Canada. However, during the election, the party made significant inroads in Ontario, where the Tories won in 40 of the province’s 106 seats, and in Quebec, where they drew votes and seats away from both the Liberals and the Bloc Quebecois.

The Liberals will now form the official opposition in parliament. They conducted a disorganized and defensive campaign, hampered by revelations of fraudulent party financing in Quebec and the launch of a new police investigation into the affairs of senior Liberal officials.

The party won 30 percent of the popular vote and 103 seats in the federal legislature. Its support is now based largely in northern Ontario, Atlantic Canada and in Canada’s largest cities — Toronto, Montreal and Vancouver. Early yesterday morning, Martin resigned as party leader.

Two other opposition parties will be represented in Parliament.

The pro-sovereignist Bloc Quebecois won 51 seats in the House of Commons on the strength of 42 percent of the popular vote in the province of Quebec, the only region of the country where the party ran candidates. This was a disappointing result for the sovereignists, who had hoped to capture close to 50 percent of the Quebec vote.

However, the socialist New Democratic Party (NDP) won 18 percent of voter support across Canada and substantially boosted (to 29) its seats in the Commons. One independent MP was also returned in Quebec.

The conservative gains in Quebec were the most politically significant. The party won 25 percent of the popular vote and 10 seats in the province, which prevented separatist leaders from claiming a majority of votes (popular support for the Bloc dropped 7 points from the last election in 2004), and ensured that Quebec will be represented in a new Conservative Cabinet.

The Conservatives attracted support in Quebec based on their promises to:

• Limit intrusions by the federal government in areas of provincial jurisdiction.

• Permit greater provincial involvement in areas of federal jurisdiction affecting provincial affairs.

• Allow the provinces to opt out of federal policy initiatives with compensation, if they have similar programs and systems of accountability in place.

During the election, Quebec’s Liberal premier, Jean Charest, and the leadership of the Action Democratique du Quebec (a provincial opposition party that supported the sovereignist option in the last Quebec referendum) both endorsed Stephen Harper’s campaign.

In addition to dealing with federal-provincial relations, the new Harper government will pursue three major policy initiatives:

• Government accountability. It intends to restrict political donations, limit the activities of professional lobbyists, implement stronger financial controls within government departments and strengthen parliamentary oversight of executive decisions.

• Tax reform. It has pledged a two-percentage-point cut in the federal value-added goods and services tax, elimination of the capital-gains tax on reinvested earnings, reductions in business taxes and individual tax credits for child care, training and education, and income-support purposes.

• Law and order. Harper is personally committed to strengthening crime prevention and toughening penalties for serious crimes.

Other, secondary, Conservative policy objectives include:

• Additional spending for the military and security services.

• A stronger emphasis on border security.

• Increased funding for regional and industrial support programs.

• Loosening Canada’s targets for reduction of greenhouse-gas emissions.

• Additional spending on highway, port and border infrastructure.

Harper’s win does not herald an era of social conservatism in government policy. The new government will not proceed with legislation to decriminalize marijuana. However, it is also unlikely to challenge laws affecting abortion rights or same-sex marriage. Nor will the Conservative win lead to an unabashedly pro-business policy agenda.

The new government’s platform promises to:

• Defend Canadian businesses affected by trade disputes with the United States.

• Boost efforts to negotiate free-trade agreements with countries outside North America.

• Increase foreign aid.

• Strengthen the capacity of the military to conduct peace-keeping, disaster relief, and anti-terrorism activities.

Canada’s foreign-policy objectives are unlikely to change much under a Conservative regime. However, the election of a new prime minister will provide an opportunity to repair relations with the administration of U.S. President George Bush, which hit new lows as a result of Martin’s anti-Washington posturing during the election campaign.

Harper will succeed Martin as prime minister and name his new cabinet over the next two to three weeks. The new administration will announce its policy agenda when Parliament reconvenes in March or April. However, the government will have to operate within a number of political constraints:

• Fiscal straightjacket. It is committed to running balanced budgets and paying down the federal debt by at least 3 billion Canadian dollars (2.6 billion dollars) per year, so it will be unable to carry out its full policy agenda without cutting existing federal programmes.

• Minority status. The Conservatives will have to cooperate with opposition parties to pass legislation on an issue-by-issue basis. However, this minority government will enjoy more stability than its Liberal predecessor. None of the political parties wants to return to the polls within the next 18 months. The opposition’s internal leadership, financial and morale problems will also help the Conservatives.

• Broadening national appeal. The Conservatives need to consolidate and build electoral support across the country if the party is to form a future majority government. The close election results suggest that voters were more intent on punishing the Liberals than setting a new course for federal policy.

The political challenge for the Conservatives will be to change from an opposition party based primarily in western Canada into a governing party capable of brokering national issues. Therefore, it will govern from the center of Canada’s political spectrum and attempt to build support in Ontario and Quebec.

Oxford Analytica is an international consulting firm providing strategic analysis on world events for business and government leaders. See www.oxan.com.