Conservative leader Stephen Harper makes a campaign stop in Toronto on Tuesday, August 18, 2015.Sean Kilpatrick/The Canadian Press
Paul Fairie is a political scientist at the University of Calgary, where he studies voter behaviour.
Economic indicators suggest that the Conservative government will likely suffer a loss in vote share compared to 2011, though they will likely avoid complete electoral disaster.
Ten months ago, various economic indicators suggested that the Conservatives' vote share might drop by a handful of percentage points in the fall election. However, the economic outlook of Canadians has changed. In a July Forum Research poll, 58 per cent of Canadians said they thought that the national economy was in recession. Even if economists do not uniformly agree with this analysis, the strong public sentiment must concern party strategists.
Looking at the numbers again now, just two months before voting day, the state of the economy suggests that Canadians' votes might be more strongly determined by other factors.
The low Canadian dollar
One economic number that jumps out is the change in the value of the Canadian dollar. In May, 2011, the dollar bought about $1.05 (U.S.). Currently, it will get you about 76 cents. Despite this dramatic decline, this is not likely to be important to the outcome of the election. Over the past 30 years, the Canadian dollar has been both high and low compared to the U.S. dollar come election day, and its value has had no relationship to the change in the government's vote share.
For example, the dollar's current value of 76 U.S. cents is much higher than its value on election day in 2000, when it bought just 65. In that election, the incumbent Liberals increased both their vote and seat shares. Likewise, a Canadian dollar worth 76 cents in 1993 saw the Progressive Conservative government reduced to just a pair of seats.
While the Canadian dollar's value relative to the U.S. dollar is often an eye-catching and easy-to-follow statistic, the fact that its electoral importance is low isn't too surprising, given that the value of the dollar has different positive and negative effects on the Canadian economy.
Unemployment
A similarly prominent number is the unemployment rate. Looking at the last few elections, the rate three months prior to voting day has been surprisingly stable since 2000, sitting in the 6 to 8 per cent range. At the same time, the governing party's vote share has been reasonably stable, with the incumbent party's vote change ranging from a loss of 6.5 per cent in 2006 to gain of 2.4 per cent in 2000.
The latest unemployment numbers from July, 2015, put the rate at 6.8 per cent, exactly where it has been for the last six months. It sits exactly in this more stable range for government vote share. It avoids some of the higher number, like we saw in the 1984 and 1993 elections. At those votes, the unemployment rate was higher than 11 per cent three months before election day. This was followed both times by huge losses in support for the incumbents. In 1984, the Liberals shed more than 16 percentage points of their popular support, while in 1993, the PCs saw their vote share evaporate by 27 percentage points. This suggests that in times of high unemployment, governments are likely to suffer at the polls, while at times of unemployment in the 6 to 8 per cent range, other factors are more likely to affect the government's vote share.
This doesn't mean that the unemployment rate is necessarily good news for the Conservatives, other than they are in a good position to avoid an electoral rout. For example, in January, 2006, the Liberal Party was seeking its fifth election win in a row and was campaigning in the context of a 6.7 per cent unemployment rate. Yet, in the midst of a political scandal, and with the scent of change in the air, they lost 6.5 percentage points of their vote share.
For the Conservatives, replicating this performance would be perilous to their majority. In 2011, they won 39.6 per cent of the vote; losing 6.5 percentage points would leave them with 33.1 per cent. While higher than they are currently polling, this would be more than 3 percentage points lower than their vote shares in any of the last three elections, two of which resulted in Conservative-led minority governments.
The opportunity
This economic context presents all parties with opportunities. Political-science research indicates that in longer campaigns, voters are more likely to use economic and ideological factors in their decision-making process. In the event of mixed economic indicators, parties can either take the opportunity to make the election less about economic factors and more about these ideological ones, meaning that selling policies to voters might prove an effective strategy.
In the first few weeks of campaigning, parties do seem to have focused on matters other than the economy, so far concentrating more on issues like terrorism, drugs and education. Perhaps this is because in the absence of a high unemployment rate, voters are more likely to be persuaded by other policies.
This may shift if two more months of reports of an economic contraction emerge. This would support a narrative of struggling economy, which can only serve to benefit the opposition parties.