January 24, 2006

Canada takes tentative step to right in election

By David Ljunggren

OTTAWA (Reuters) - Canada took a tentative step to the
right in Monday's federal election, ousting the Liberals after
12 years in power and voting in a fragile minority Conservative
government, television networks said.

Preliminary official figures at 12:20 p.m. (0520 GMT
Tuesday) showed the Conservatives winning or ahead in 125
electoral districts compared to 102 for the Liberals of Prime
Minister Paul Martin.

The result was a personal triumph for Conservative leader
Stephen Harper, a 46-year-old economist who forced through the
creation of the party in December 2003 by uniting two
squabbling right-wing movements.

"I have just called Stephen Harper and I have offered him
my congratulations. The people of Canada have chosen him to
lead a minority government," Martin told supporters in his
Montreal electoral district in a concession speech.

Support for the Liberals shrank amid voter fatigue and a
major kickback scandal which brought down Martin's minority
government in November.

"Canadians voted for hope over fear and accountability over
corruption ... Tonight is the beginning of a moment of
reckoning for the Liberal Party," senior Conservative Jason
Kenney told reporters in the western city of Calgary.

Harper vowed to clean up government, cut the national sales
tax, clamp down on crime, cut waiting times for health care and
improve strained relations with the United States.

But how long he can stay in power is open to question,
since he will have nowhere near the 155 seats he needs to hold
a majority in the 308-seat House of Commons.

The Conservatives have no natural allies in Parliament and
will therefore need to govern on an issue-by-issue basis with
the backing of other parties.

"Minority means we have to be constructive, and we have to
be working together and finding common ground," deputy
Conservative leader Peter MacKay told CTV.

Traditional wisdom dictates that minority governments in
Canada usually last between a year and 18 months.


The Canadian dollar barely moved on the news, which
analysts said reflected the fact both the Liberals and the
Conservatives had vowed to keep the budget in surplus.

"With a minority, you're going to have perhaps less concern
in the market that a government is going to ram through a
fiscal platform that potentially could endanger the surplus if
times became tough," said Andrew Pyle, senior economist at
Scotia Capital in Toronto.

It was the first time a right-wing party had won an
election since 1988, when the then Progressive Conservative
government beat the Liberals.

Martin, 67, had tried hard to convince Canadians that
Harper was an extremist who would try to strip away personal
freedoms such as gay marriage and abortion.

Preliminary data showed the Conservatives had won 36.4
percent of the vote, up from 29.6 percent in the 2004 election.
The Liberals slipped to 31.3 percent, down from 36.7 percent.

One of the reasons for Harper's success was a breakthrough
in the French-speaking province of Quebec, where only a few
weeks ago the Bloc Quebecois was predicting it would win the
vast majority of the 75 seats available.

But the Conservatives -- who had no Quebec legislators at
the start of the campaign -- were set to win 10 seats. The Bloc
looked likely to lose three seats and end up with 50.

The result was a blow for Bloc leader Gilles Duceppe, who
had predicted his party would win more than 50 percent of the
vote and give a boost to the independence movement. Initial
figures showed the Bloc had won 43 percent of the vote.

The left-leaning New Democrats also did well and looked on
course to win 30 seats -- their best showing since 1988.

Martin fought mainly on his record, particularly an economy
running both a healthy budget and trade surpluses.

At the dissolution of the old Parliament in November, the
Liberals had 133 seats and the Conservatives 98.

(With additional reporting by Rachelle Younglai, Randall
Palmer, Gilbert Le Gras and Janet Guttsman)