Canada Elects Minority Conservative Government

by Mike Godfrey, Tax-News.com, Washington

25 January 2006

The Conservative Party leader Stephen Harper is set to become Canada's new Prime Minister after his party ousted the ruling Liberal government in Monday's tightly contested federal elections.

Mr Harper, a 46-year-old economist, has pledged that upon assuming the reins of government he will seek to bring about a reduction in taxation within the confines of the budget, starting with an immediate cut in Goods and Services tax.

"We will reduce your tax burden, starting by cutting the GST from seven to six percent immediately and to five percent over our mandate," Mr Harper told supporters in Calgary.

According to the Conservatives, the amount of GST taken from Canadians has doubled, from C$15.9 billion (US$13.7 billion) to C$31.8 billion while the Liberal government has been in power, exceeding inflation and outstripping growth in earnings.

The Conservatives claim that the GST cut will save ordinary taxpayers C$4.5 billion, with more savings to come.

However, Mr Harper faces an uphill battle in attempting to get his policies onto the statute book, and finds himself in a similar situation as the Liberal leader, Paul Martin, who led a minority government for seventeen months and was forced to call an election late last year when his support in the parliament disintegrated.

The Conservatives won 124 of parliament's 308 seats in Monday's poll - well short of the 155 seats needed for control of the Commons.

The Liberal Party, whose reputation had been damaged in recent months by political scandal, won just 103 seats, polling 30.2% - their second worst showing since Canada's independence in 1867.

The separatist Bloc Quebecois won 51 seats, while the left of centre New Democratic Party won 29 seats, a gain of 11 seats.

Minority governments in Canada have rarely lasted beyond eighteen months in power, prompting political analysts to speculate that another election is probable in the not-too-distant future unless the Conservatives can form alliances in a parliament where it has no natural political allies.

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