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If not Harper, then who? Conservative economic brand could hold firm in the next election

Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa January 27, 2015. REUTERS/Chris Wattie (CANADA - Tags: POLITICS)

The debate in the House of Commons resumed this week for Parliament’s final leg before the next election, and the single word that echoed louder than any other was “economy.”

Well, economy or one of its many offshoots: Fiscal, budget, middle class, collapse. Oil.

Sure, the Liberals and NDP hammered the Conservatives about the combat-mission-that’s-not-a-combat mission heartily enough on Monday. But with the federal election coming up in October, if not sooner, the economy is a point of inevitable debate.

There is the promise of a balanced budget, an oil-dependent economy that falters as the resource dips to $50 per barrel, and a delayed fiscal update.

And the question of whether Prime Minister Stephen Harper is still the best person to man the sails is at the root of it all. Political analyst Gerry Nicholls said the Conservatives still think so, and if it is left up to them the economy will be the focus of the election.

"If the Conservatives have their way, it will be,” Nicholls told Yahoo Canada News on Tuesday. “The economy is really Stephen Harper and the Conservative Party’s trump card. Rightly or wrongly, the default perception for a lot of voters is that Harper and the Conservatives are more competent economic managers than the Liberals or the NDP.”

The Conservative Party of Canada’s reputation relies heavily on their past economic stewardship, but they face significant questions about it now. The suddenly-plunging price of oil has cast into doubt Harper’s promise to release a balanced budget later this year.

CIBC recently estimated that weaker crude could cost the federal government about $5 billion. And the plunging oil prices have prompted the Bank of Canada to downgrade growth projections and cut its interest rates.

As the National Post’s John Ivison recently noted, the Conservatives have already committed to tax cuts worth $26.7 billion, which could further cast into doubt their ability to balance the budget.

"The government gets the credit when things go right, so it’s only fair that they are made to look like chumps when it all goes wrong," Ivison wrote.

Meantime, Bloomberg reports that the plunging oil prices have made Canadians more pessimistic about the prospects of the economy than they have been since 2011.In short, the federal government’s reputation of prudent fiscal management is at a crossroads. And there is a window for their opposition to position themselves as the fiscal stewards Canadians should trust moving forward.

The question remains, however, how they are going to go about doing that. Nicholls says the Liberals and NDP might try, but they would have an uphill battle to unseat the Conservative brand on that issue.

"It is like a hockey team playing in the other guys’ rink. They are playing to Stephen Harper’s strengths, and that makes it more difficult to win," Nicholls said.

"That would be like Stephen Harper saying, ‘I’m the guy who can handle global warming.’ It’s not really his bit. The economy is not really Mulcair’s bit and it’s not Trudeau’s bit. Their strategy … would be to try to change the channel, to talk about something else."

That hasn’t stopped the other parties from challenging the Conservatives’ recent record, however. The New Democrats and Liberals hammered the Conservatives on the economy in their return to the House of Commons this week.

NDP Leader Tom Mulcair accused them of relying too heavily on the “resource extraction market” and leaving the country unprepared for a possible decline. Liberal Leader Justin Trudeau challenged them on the same issue, demanding to know how much the declining oil price has cost the government (he did not receive a response).

And then there were insinuations that the federal budget had been deferred until April in order to delay admitting the stark truth to the public – Canada was facing a financial mess.

Harper was not in the House of Commons on Monday, but Finance Minister Joe Oliver fended off questions about Canada’s dependence on the oil industry by, in essence, denying there was an issue.

“What we are saying to Canadians is that they should be reassured,” Oliver said on Monday. “We have a strong economy, we will balance the budget and we will honour our commitments.”

On Tuesday, the NDP released a few more planks of its own economic strategy, which included reducing tax rates for small businesses, extending the life of a manufacturing machinery cost allowance and adding an additional tax credit on manufacturer machinery purchases.

They are perhaps not the sexiest promises on which to campaign, but they fall under the party’s “protect the middle class” rally cry. And they come as the NDP continue to demand the government release an economic update “in light of the unstable economic situation, including job losses, falling oil prices, and declining government revenues.”

The Liberals have also attempted to shift blame for the economy onto the Conservatives. Last week, Trudeau claimed Harper’s obsession with oil has come back to bite him.

“Stephen Harper told Canadians a few times to trust him, that his was the hand we ought to have to steady the tiller,” said Trudeau, via the Ottawa Citizen.

“So, first question: Why would the Harper government bet so much of Canada’s future on oil prices staying high? Because they didn’t. They hardly do. Second question, and the big one: Why didn’t the Harper government have a more balanced plan?”

Trudeau’s team has yet to release a full economic strategy, but recently said the government need to invest more in the auto industry.

The National Post’s Michael Den Tandt says if the Liberals want to regain some of their once-mighty lead over the Conservatives, they will have to define themselves fiscally.

"So, the Grits’ key task over the next four months will be to recapture those errant swing voters, by offering an economic program they hope will compare favourably with the Conservative recipe of income-splitting and childcare credits. In order to be competitive that plan will need to offer a tax reduction of its own — one that appeals to a larger population base than does the Conservative plan," Den Tandt wrote on Monday.

The same challenge rests on the shoulders of the NDP and Conservatives as well. But, as Nicholls notes, this has long been the Conservative brand. And they’re spoiling for a chance to campaign on their economic record.

"Stephen Harper wants the public to feel good about the economy, but not too good. They want them to have a sense of anxiety so that they fear handing over control of the economy to either Mulcair – the scary socialist – or Justin Trudeau – the kid who we wouldn’t trust to manage a lemonade stand. That’s the kind of question I think the Conservatives want Canadians to answer before they vote."

As for whether the Conservatives will end up wearing the blame for the damage done by lower oil prices, Nicholls thinks not.

"I don’t think anyone saw that coming. In fact, the warnings we were getting is that they were running out of oil not that there would be a glut in the market. I think Canadian voters will be forgiving of Stephen Harper for that one. This was something that caught everyone by surprise."

Nicholls added that the oil plunge messes up the Liberal and NDP calculations as well, and means less money for any spending programs they may want to campaign on.

"To the extent that the oil price plunge may have an impact, I think it will actually help the Conservatives – and that may seem counter-intuitive," he said. "The more anxious people are about the economy, the more it plays to Stephen Harper’s favour. People will say, ‘I may not like Harper very much, but at least I trust him.’"