The New Democrats joined the opposition Liberal and Bloc Québecois parties in rejecting the recently tabled budget of Stephen Harper’s Conservatives thereby making another federal election almost a certainty. The budget itself was a rather careful centrist leaning budget considering that its authors are Conservatives. It continued with its moderately Keynesian thrust of gradually withdrawing additional fiscal stimulus and depending more on monetary policy in the days to come. Canadian unemployment is still elevated but doing significantly better than the situation in the U.S. The rate is 7.8 % (Although if we adopt the U.S. methodology the Canadian rate falls to 6.8 %). The government in its budget promises to bring the deficit currently about 3 % of the GDP to budget balance by 2016.The debt to GDP ratio is about 34 %. So it wisely rejects the strategy of austerity and draconian cuts adopted by British Conservatives. Some modest improvement in payments to the poorest pensioners, modest targeted improvements in education funding and further investments in infrastructure were also included. But the opposition parties were determined to have an election. So we likely go to the polls in early May. The latest public opinion polls show the Conservatives still likely to win the largest block of seats but not a majority.
The Nanos poll has the Conservatives at 38.6 %, the Liberals at 27.6, the New Democrats at 19.9, the Bloc at 10.1 and the Greens at 3.8. the Ekos poll has the Conservatives at 35.2 %, the Liberals at 27.8, the NDP at 14.9, the Bloc at 10.1 and the Greens at 8.8.
Michael Ignatieff will be trying hard to win over the Canadian public to supporting him as a more progressive and attractive alternative to Mr. Harper. Many voters however will be annoyed initially with the prospects of another election preferring to focus on the still recovering economy and the substantial problem we face with youth unemployment and general underemployment in certain key sectors of the workforce.
As always the campaign will take on a life of its own with some surprises along the way. The key to any one party winning a majority is for it to make a major breakthrough in Ontario or Québec.
But so long as the Bloc Québecois, a sovereignist party with social democratic leanings has a lock on close to 50 seats in Québec and the NDP a growing force in several regions of the country including B.C. and the Atlantic provinces that goal is likely to remain elusive. The Green party with a potential for 10 % or more of the vote particularly in the light of the events in Japan is likely to do well in the popular vote as well. The Canadian first past the post electoral system is also a problem as it hinders the emergence of stable coalitions that can govern. One such natural coalition is a Liberal NDP Green alliance which would attract the support of about 53 % of the electorate.