Coalition Government in Canada?

The Canadian Election – Will A Coaliton Government Stimulate the Economy and pull the East out of its Recession?

Although the PC party has a clear lead in the polls with about a month remaining before the next federal election, it is very likely that they are headed toward another minority governing status. Previously, opposition parties kept their minority places and didn’t bond together to defeat and replace the government. The PC government recently lost its ruling power when a non-confidence vote was passed in parliament. This forced another election.

The PC party has been spending up a storm with attack and mud slinging television ads that portray the Liberal leader, Michael Ignatieff, as an evil predator who just wants to be prime minister. The ads have been going way overboard and may actually create sympathy for Ignatieff. The ads also portray Prime Minister Stephen Harper as a patron saint and one who cares about Canadians.

The Gunslinger?

The PC party and Harper have an extreme agenda, one that seemingly protects the Canadian economy. But with unemployment such a lingering problem, voters may be tired of waiting for this recession to end. For large corporations, the recession may have ended but for small and medium sized businesses, it is still on. Add to that, the high Canadian dollar which hampers Ontario and Quebec’s ability to compete internationally and the rising cost of oil and gasoline, and higher food prices, and you have the inflationary problem. The solution for the threat of high inflation according to Harper is to jack up interest rates which further undermines Canadian competitiveness.

Oil Price Chart

If Harper and the PC party are to get back in with a majority vote, they’ll have to hope Canadians are in a stupor of some sort. With the economy heading toward a double dip recession (US is stagnating too) voters have one more month to realize that further cuts and action on the economy means growing hardship. While China’s massive economy continues its relentless growth, the Harper agenda sees sitting back and resting on our US natural resource exports. Is that the future we want? Especially in the resource-poor East. Ignatieff needs to focus more on the economy because that’s the PC’s weak link.

Jack Layton and the New Democrats are a non-entity as far as most feel, but if they try to work out a Canada coalition government aggrement with the Liberals, and the Bloc Quebec party, we might see some stimulation of the economy.

The PC party and Harper keep harping about balancing the budget deficit within 3 years. This is all an academic and political ploy that no one really cares about. The PCs have seized on it as a way of appealing to polyannish middle class families who have very little understanding of what actually creates a strong economy – thus a positive budget surplus.

A coalition government sounds risky but I think the Liberals, ND, and Bloc Party are probably desperate enough to work out an arrangement. If they want power, it’s there for the taking.

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