Canadian election less likely over budget

By Randall Palmer

OTTAWA (Reuters) - The chance of an early Canadian election receded further this week with strong hints from opposition Liberal leader Stephane Dion that he may let the February 26 federal budget pass through Parliament.

While Canada's parties are actively preparing for a possible election just in case one of the various potential triggers is pulled and brings the minority Conservative government down, a spring election looks increasingly unlikely.

Dion's remarks on the budget in Quebec City on Monday afternoon were the clearest indication that the official opposition has little appetite for an election for now.

"If it's a budget that looks acceptable, or at least not harmful, not too harmful to the Canadian economy, we could let it pass and save C$350 million of (public) expenses for an election," he told reporters in French.

Prime Minister Stephen Harper's Conservatives, elected in January 2006, are already the fourth-longest minority government in Canadian history, which has spurred some to look for an election in the next few months.

A budget is automatically a confidence measure that would force an election if defeated, and Harper has also staked his government's future on agreement to extend Canada's mission in Afghanistan and on the passage of a crime bill.

Political observers had been trying to figure out whether an election could be avoided this time, but gradually, the tension in the tripwires seems to have eased up.

On Afghanistan, Dion and Harper have agreed that the mission should be extended from 2009 to 2011. Some differences remain, for instance whether 2011 would be a fixed withdrawal date or one that could be extended further.

If the differences are not eliminated, Canadians would still be headed to the polls, but the likelihood of this happening has sharply lessened with Harper and Dion referring to common ground last week.

Another potential tripwire was the passage of an omnibus crime bill. Justice Minister Rob Nicholson said he would recommend that Harper treat it as a matter of confidence if it is not passed by the Senate by March 1. However, the Liberals insist they will act responsibly and in a timely fashion.

That leaves the budget as a possible tripwire. Dion was careful on Monday not to say he would support it but said he could let it pass if it was not too harmful.

This appears to point to another Liberal abstention on the budget, as they did when the government put out a series of tax cuts in its October 30 economic and fiscal update.

Dion said it would obviously not be a Liberal budget, which he would prefer, but "we also have to respect the decision of the voters in 2006" to put the Conservatives in power.

It would be a risky move for Dion to trigger an election, since there would likely be a move to replace him as Liberal leader if he did not win or at least substantially improve his party's standings.

Neither the Conservatives nor the Liberals have had a consistent strong lead in the polls in the last several weeks in terms of party preferences, but Harper far outpaces Dion in terms of leadership preferences.