Image: Stephen Harper
Tom Hanson  /  AP
Conservative Party leader Stephen Harper talks with reporters at a news conference in Calgary Alberta on Wednesday. Harper's party won a minority in Tuesday's federal election.
updated 10/15/2008 6:08:51 PM ET 2008-10-15T22:08:51

Canadian Prime Minister Stephen Harper announced a new economic plan Wednesday, a day after his Conservative Party's re-election victory fell short of a Parliament majority amid voter disgruntlement over his slow response to the global financial meltdown.

Harper had shored up his party's standing in recent days by taking a more forceful stand on economic problems — helped by even deeper unhappiness over the opposition Liberals' push for a new tax on all fossil fuels except gasoline — and he kept to that theme after the ballot.

"The No. 1 job of the prime minister of Canada is to protect this country's economy, our earnings, our savings and our jobs, during a time of global economic uncertainty," Harper said. "The mandate we received allows us to continue moving forward."

His plan calls for reined-in government spending and presenting Parliament with a budget that takes account of the credit crisis by the end of November. He said he would meet with Canada's provincial leaders as well as his counterparts in the Group of 7 major industrial nations to discuss economic needs.

In his concession speech late Tuesday, Liberal Party leader Stephane Dion offered his "full cooperation in these difficult economic times."

Harper promised to ensure that Canada's banks are not hurt by government moves in the United States and Europe to buy up stakes in their own banks to shore up balance sheets.

"We are examining what other countries are doing very closely to make sure that our banks are not put a competitive disadvantage," Harper said. "Frankly, our leading banks are now some of the largest banks in the Western world as a consequence of what's going on."

He declined to say what options he was considering but said it would not involve a lot of taxpayers money.

Response to global crisis
When Harper called early elections last month, opinion polls indicated the Conservatives had a good chance to expand to a majority in Parliament — after governing as a minority since a 2006 election victory and needing the help of the opposition to pass legislation.

But the party's support sagged, and polls said voters felt the prime minister's response to the growing worldwide crisis was tepid. He had said Canadians weren't worried about jobs or mortgages, and a few days after he called stocks cheap, Canada's main exchange had its worst week in almost 70 years.

Harper changed tack, assuring Canadians that he understand their worries while stressing the theme that Canada's economic and fiscal performance has been much better than in the U.S. and Europe. Last week, his government announced it would buy up to $21 billion in mortgages from Canada's banks in an effort to maintain the availability of credit.

In the end, the Conservatives won 143 of Parliament's 308 seats, an improvement over the 127 in the previous Parliament but short of the 155 needed to govern on its own.

Voters gave a harsher verdict on the Liberal Party, which has been the dominant party for most of Canada's history but plunged from 95 Parliament seats to 76. The separatist Bloc Quebecois won 50 seats, the New Democrats 37 and independent candidates 2.

Stephen Clarkson, a political economy professor at the University of Toronto, said Harper's slow reaction to the financial crisis hurt him some on election day. But he said the 10 percent rise on the country's main stock exchange Tuesday may have helped the prime minister.

"That must have made people feel a bit better," Clarkson said, although stocks lost a little over half the election day rise on Wednesday.

Liberals in disarray
Economics wasn't the only factor in the Conservatives failure to win a majority. Clarkson said cuts in cultural funding didn't go over well in the French-speaking province of Quebec, where Harper had been counting on winning more seats for the Conservatives.

Clarkson also noted that Harper has been buoyed by the significant gain in seats held by the Conservatives even if he did fail to get the majority he coveted.

"He probably feels that he should provoke an election fairly soon and get his majority after all — particularly if the Liberals are in disarray, divided about their present leader or fighting over who should be the next leader," Clarkson said.

Dion, the leader of the left-of-center Liberals, signaled he was not ready to step down despite the party suffering one of its worst losses, telling supporters that Canadians wanted him to be the official opposition leader.

But Dion could face a rebellion from some in his own party who consider him a weak leader. His call for the fossil fuel tax was widely unpopular, and the Quebec native turned off many people in Canada's English-speaking regions with his mangled grammar and often impenetrable accent.

In calling the election just before the escalation in the financial crisis, Harper became the first major world leader to face voters amid the economic turmoil.

Harper said Wednesday that he would meet Friday with French President Nicolas Sarkozy and Jose Manuel Barroso, president of the European Union's administrative authority, as part of a previously scheduled Canada-EU economic summit.

The meeting was originally planned to discuss a possible free trade agreement between Canada and the EU but the credit crisis seems to have derailed those talks.

"At the summit we will also explore strengthening the economic partnership between us and the EU," Harper said.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments