Canadian Elections 2015: A 3 Horse Race

vote

Elections in Canada for the new Prime Minister are on October 19th. The contenders are shockingly close in early polling numbers with the New Democratic Party, led by Thomas Mulclair, in the lead. This is a surprising twist as the Liberal candidate, Justin Trudeau, maintained that lead up until recent polling. Lagging behind both is the party of the Conservatives led by current Prime Minister Stephen Harper. {Projections}

The reason why Canadians are likely to not stick with the status quo in leadership is the lagging economy. Canada went through the global recession in 2008 with a better GDP % change then the G7 nation averages. However, as of late, they are lagging the G7 nations in GDP growth due to numerous factors that need to be addressed. GDP growth has slowed to ~2% and unemployment has risen to ~6.8%. Canada comparatively did better during the global recession due to their reliance on commodity trading, especially oil, which acted as a hedge against the global downturn. Now that oil prices have dropped sharply over the last year, trade in oil has slowed and revenues have gone down. There is a possible housing bubble as prices are too high and consumer borrowing has skyrocketed. To boost growth, the Conservative government has recently lowered the benchmark lending rate from .75% to .50%, taking a lesson from the Federal Reserve of the United States. These are good policy moves but they are not enough. Canada needs to diversify its economy away from merely oil. The Canadian dollar needs to depreciate further and can only do so through government spending on infrastructure and job creation. This will lower unemployment, make Canadian goods cheaper overseas, and boost manufacturing. Ideally, private investment would go up following these maneuvers (private investment has been down 40% recently). These actions are not fitting of a right-minded Conservative government. That is why the new Prime Minister will be either from the Liberal or New Democratic Party.

What the Conservatives have going for them is the goal of balancing the budget and the success of the universal healthcare system. However, Conservatives are not the favorite of  female voters, who are growing very strongly in numbers. The New Democratic Party has taken a large chunk of this demographic through pledges of forming a nationwide childcare program. The Liberal Party is sharply pro-choice for abortion rights and pledges a strong female presence in an eventual cabinet. The Canadian people are desperate for job and wage growth, and a left minded candidate will use government spending in order to create a better investment environment for outside investors. Trudeau is very young and seems very vague in policy details. He is the most inexperienced of all candidates as well. However, his motivational speeches have led to his early polling projection success. When the economy is struggling, voters tend to listen to populist policies that promise more than they can deliver. This fact, combined with progressive values on female empowerment, the environment, and inequality (but abstinence against fighting ISIS) gives him a very high chance to succeed in the current Canadian environment.

Campaigning strategies for both the Liberal and Conservative sides have focused on attacking each other, leading to the rise of the New Democratic Party. Sharp attacks on the left and right have left voters searching for a center option, of which Mulclair has attained.

As consensus grows over the reality of new oil prices, the Canadian economy needs to do more to diversify, and the current Conservative government does not have the gall to do so. Change is needed, and it will come, with either a center-left (New Democratic Party) or left (Liberal Party) government.

 

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