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As U.S. voters head to the ballot boxes on Tuesday, some will be cheering for the Democratic Party, others will be supporting the Republican Party – but many Canadians will simply be hoping for a profit party.

If, as expected, the Republicans seize control of the Senate in the midterm elections, their new muscle in both houses of Congress could lead to a breakthrough in the seemingly interminable gabfest over TransCanada Corp.'s stalled Keystone XL pipeline.

Republicans generally support the massive project to link Alberta's oil sands to the U.S. Gulf Coast, but the pipeline's final stage has languished in limbo, awaiting approval from President Barack Obama. He says he will give it a go-ahead only if he can be assured the project will not exacerbate greenhouse-gas emissions.

Republican Senator Mitch McConnell of Kentucky, a strong backer of Keystone XL, has fired back by threatening to force a vote on the pipeline if the Republicans gain a majority in the Senate. Even if that showdown doesn't come to pass, the expected gains by the Republicans are likely to result in increased pressure to approve the project, opening a vital path for Canadian crude to reach international markets.

Canadians who don't want to bet on the Keystone XL project may still see the results of the election reflected in their portfolios. Robert Doll, chief equity strategist at Nuveen Asset Management, says U.S. stocks have gained an average of 16 per cent in the six months following the past 16 midterm elections.

Also encouraging is research from GMO, a Boston-based money manager. It traced the returns on the S&P 500 in each year of a presidential term and found that the third year – the period just after mid-term elections – has produced nearly all the gains over the entire presidential term.

To be sure, this year could prove to be the exception to these historical patterns. The first half of a president's term has generally been marked by dismal returns, but the first half of Mr. Obama's second term has broken with tradition and produced outstanding gains.

However, stocks still seem to have an economic tailwind behind them. The unemployment rate in the United States is falling and consumer confidence is growing. Some observers point to other encouraging signs.

Economists Alan Blinder and Mark Watson of Princeton University recently published a paper that showed U.S. economic growth since the Second World War has been significantly stronger under Democratic presidents such as Mr. Obama. Even more encouraging is their finding that the economy grew with particular vigour during periods in which a Democratic president was matched up with Republican majorities in both the Senate and the House of Representatives.

That appears to be the most likely configuration to emerge from this week's voting. Pollsters are predicting that Republicans will win the minimum seven extra seats they need to gain a majority in the Senate, which would give them control over both houses of Congress for the first time since George W. Bush was president.

Republican gains could provide a further boost for the already high-flying U.S. dollar – a boon to Canada since it would make Canadian products that much cheaper for U.S. buyers. Since 1967 the average annual gain for the greenback under the combination of a Democratic president and a Republican Congress is 7 per cent, according to analysts at JPMorgan.

No matter who wins this election, Congress will turn its attention over the coming year to mulling the merits of lifting its nearly four-decade-old ban on exporting crude oil. Thanks to booming production from shale oil, the U.S. is now awash in petroleum and many oil producers want to see an end to the export prohibition.

U.S. oil trades at a discount to world prices, in part because of the ban, so removing the restriction could help to boost the prices of domestic oil versus its international counterpart. But while that's appealing to oil producers, it worries others, who believe that an end to the ban would mean higher prices at the pump for U.S. drivers.

Many U.S. refineries have been built to deal with Canadian crude and don't deal particularly well with shale oil. An end to the export ban could allow the country to sell more of its shale production in international markets while importing more Canadian crude.

Such a development would be cheered in Alberta, as would approval of Keystone XL. If both come to pass, some of the biggest winners in this mid-term election will be Canadians.

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