October 13, 2008 / 12:31 PM / 9 years ago

Canada to hold election overshadowed by meltdown

<p>Conservative leader and Canada's Prime Minister Stephen Harper reacts to applause during a campaign rally in Cornwall, Prince Edward Island October 13, 2008. Canadians will head to the polls in a federal election October 14.Chris Wattie</p>

OTTAWA (Reuters) - Canada's ruling Conservatives look set to retain power on Tuesday in the first national election held in a major industrialized nation since the market meltdown this month.

Prime Minister Stephen Harper triggered the campaign five weeks ago on the grounds that his minority government could no longer work with opposition parties who hold the balance of power in Parliament.

Then shares began to plummet and Harper retooled his campaign in a bid to persuade Canadians that only he could manage the country in such troubled times.

"(We have) a plan that in the midst of this world financial crisis has kept our economy creating jobs, kept our budgets balanced and kept your bank accounts safe and secure," he told a rally in Cornwall, Prince Edward Island on Monday.

Harper has dismissed opposition calls for major government spending programs.

The election is the third in four years and -- according to virtually every poll over the last month -- will produce Canada's third successive minority government.

Harper, who defeated a minority Liberal administration in January 2006, foresees another election relatively soon.

"Obviously the Parliament won't last four years," he told CTV television on Sunday.

The Liberals were hampered in the campaign by the ineffective performance of leader Stephane Dion and his insistence that despite tumbling markets and fears of a recession, the party would impose a carbon tax designed to cut greenhouse gases.

Harper says the tax would trigger an immediate recession "as bad as anywhere in the world." Dion says this is a lie.

"We don't want any more Stephen Harper. Enough is enough," he told a rally in Fredericton, New Brunswick on Monday.

Harper is promising to keep taxes and inflation low while maintaining balanced budgets.

"It's the leadership and the plan we need for tough economic times," said Edgar Maghilom, a voter who works at the University of Guelph in Ontario.

"This is the wrong time to tax people. We need a steady hand and good government," he said.

Harper's campaign was by no means smooth. After assuring Canadians all would be well if they waited out the crisis, he suddenly announced measures to stabilize the economy.

Opponents said the prime minister -- a reserved figure -- did not appreciate that ordinary Canadians were worried.

Three polls on Monday indicated the Conservatives would fall short of both the 36.5 percent they won in 2006 and the 40 percent needed to win most of the 308 seats in Parliament.

A final poll by Nanos Research -- the only firm to accurately predict the results in 2006 -- gave the Conservatives 34.2 percent public support, the Liberals 26.7 percent and the left-leaning New Democrats 21.4 percent.

An Ekos survey put the Conservatives at 34 percent with the Liberals at 26 percent while Harris-Decima had Harper in the lead by 34 percent to 25.

"If I get two mandates in a row, two minority mandates, I will be very thankful," Harper told CTV.

The Liberals' fate depends on how much support leaks to the New Democrats and the Green Party. Not all analysts are sure the New Democrats will do as well as expected.

"The systemic (financial) problems will lead people to go to one of the two main established parties. People will have less willingness to experiment," said Allan Tupper, a professor of political science at the University of British Columbia.

The Conservatives hold 127 seats in Parliament while the Liberals have 95.

Dion, whose first language is French, has trouble communicating in English and the polls suggest the Liberals could record their worst performance since 1984, when they took just 40 seats in Parliament with 28 percent of the vote.

Editing by Eric Walsh

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