Harper majority slipping away

After the easy ride of Week One, notwithstanding his minor warroom gaffes, Stephen Harper's warm and fuzzy campaign is running into rough water this second week. He is being hit harder by both the NDP and the Liberals in ads and speeches. Dion is finally on the offensive. The economic downturn in the US and to some extent in Canada may become Harper's Achilles' Heel.

As I mentioned yesterday Harper's Conservatives do not have a good fiscal track record so far, taking the country from record surpluses to the verge of a deficit. Like John McCain, Stephen Harper likes to say that the economic fundamentals are strong. He must be getting his advice from Jeff Rubin of the CIBC. Dion hit hard on the economic theme today in Halifax, pointing to the Liberal financial track record during the Chretien/Martin years.

The fact is that a deepening Canadian housing market slump, plus a flood of other worrisome economic reports on both sides of the border, added to fears of a widening U.S. financial market crisis. Canadian home sales tumbled nearly 20 per cent last month from a year earlier and prices were off more than five per cent. Canadians also cut their purchases of new cars in July. And jobs continue to disappear in southern Ontario. This provides potent ground for the Liberals to till in the coming weeks.

Most recent Strategic Counsel polling indicates the Conservatives are losing their lead in swing Ontario ridings, with their lead shrinking to its lowest level so far this campaign in these key battlegrounds. The Cons now have only a five-point lead over the Liberals in 20 Ontario ridings where the race was tightest in the last election or by-election, down from the 19-point lead the Conservatives enjoyed over the Liberals in those battleground ridings Sept. 10-13 (http://www.theglobeandmail.com/servlet/story/RTGAM.20080916.welectionpoll17/BNStory/politics/home ). Their chances of winning a majority are slipping away.

This campaign is only beginning. Stay tuned.