Harper confident on election and economy

Thu Dec 20, 2007 6:14pm EST
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By Randall Palmer and David Ljunggren

OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper is bullish about his chances if there's a federal election next year, and says the government has done what it can to cope with challenges to the economy in 2008.

In a wide-ranging year-end interview with Reuters, Harper insisted the government would not wreck Canada's record of 10 successive years of budget surpluses, even though the economy, threatened by a strong Canadian dollar and the as-yet unknown fallout from the U.S. subprime crisis, will face challenges.

Sitting before a large Nova Scotia Christmas tree at his official 24 Sussex Drive residence in Ottawa, he said he was confident his Conservatives would win the next federal election, whenever it is held, even if the economy is souring by then.

"I think (our chances) are good ... our approach has been let's just govern as well as we can and let the public make the decision when the time comes."

He won a minority government in January 2006 and his government can be brought down if the three opposition parties unite to defeat the Conservatives in Parliament.

Harper also gave unusually explicit guidance on the government's view on the Canadian dollar, saying it was clearly overvalued when it hit US$1.10 (valuing a U.S. dollar at about 91 Canadian cents) in November, but that it would be appropriately valued just shy of parity with the U.S. dollar.

Harper said the government has positioned itself well for a possible rough patch in the economy next year by introducing tax cuts in October, particularly to help the manufacturing sector.

"But that said, it's hard for me to imagine how this uncertainty can continue without some effect on the Canadian economy. So I think we're going into a more challenging year economically."   Continued...

<p>Canada's Prime Minister Stephen Harper sits down for an interview at 24 Sussex Drive, his official residence, in Ottawa December 18, 2007. Picture taken December 18, 2007. REUETRS/Chris Wattie</p>