Harper’s challenge: To reboot and refresh his government

Stephen Harper, who turned 54 this week, is a man on the verge of a reboot as his government approaches the mid-point of its third term in office.

It's been two years ago Thursday since Mr. Harper was returned to 24 Sussex with a majority government.

The Prime Minister is now crafting a sizable cabinet shuffle for mid-2013 – likely relatively early this summer – that is intended to refresh his ministry and showcase for Canadians the team that he will campaign with during a 2015 election.

Former PMO officials say they expect that Mr Harper's chief of staff, Nigel Wright, is approaching ministers to determine whether they plan to retire after this term and could therefore be dropped from cabinet to make way for new blood.

Mr. Harper is expected to follow up this overhaul of his ministerial team by proroguing Parliament – hitting the reset button on the session – before returning in late September with a new Speech from the Throne that lays out the political agenda for the last half of his mandate.

This refresh is well timed.

After more than seven years in office, Mr. Harper's political brand is feeling its age, according to pollster Nik Nanos. "The Harper brand is becoming a little fatigued," he said.

Like many political leaders after any length at the helm, the Prime Minister now has a record that includes ministerial resignations for slip-ups, government misadventures like picking the F-35 fighter jet without a proper search, and unaccounted-for funds such as the $3.1-billion in money earmarked for anti-terrorism flagged by the federal Auditor-General this week.

The Conservatives have sold Mr. Harper as the only leader who can be trusted to be Canada's economic steward and, while this country has fared remarkably well compared to its peers, the economy remains weak and slow-growing even several years after the recession ended.

"As the economy becomes a little more uncertain, it kind of cuts directly to his personal brand," Mr. Nanos said.

The Prime Minister is also facing a new challenger in the form of Liberal Leader Justin Trudeau. Even Conservatives who remain confident they can fend off the Montreal MP say they're concerned by the press buzz the son of former prime minister Pierre Trudeau is generating.

Mr. Harper retains a commanding lead over his rivals, NDP Leader Thomas Mulcair and Mr. Trudeau, when it comes to perceived competence, Mr. Nanos says.

"It's the long-term trend that counts and what we've seen in the last six months is a general erosion of positive views related to the Prime Minister," the pollster said. "What we've seen are fluctuations in views, which are usually the first indicator of change. He still enjoys a comparative advantage, but he does not stand as tall politically as he did five years ago."

The pollster suggested Mr. Harper needs a signature project "to demonstrate there are still things to be done under a Stephen Harper Canada," adding: "Parties that win over the long term actually remake themselves."

The shuffle will bring new faces into cabinet as Mr. Harper recruits from those MPs who've been performing support duties as parliamentary secretaries to ministers. Hopefuls include Chris Alexander, Parliamentary Secretary to the Minister of National Defence, Kellie Leitch, Parliamentary Secretary to the Ministers of Human Resources and Labour, and Shelly Glover, Parliamentary Secretary to the Minister of Finance.

The key question for the shuffle is whether Finance Minister Jim Flaherty is ready to go. The long-serving Whitby MP has said he wants to remain until the budget is balanced – but it's far from certain he would stay another term. "I would be shocked if he ran again," one long-time colleague said.

Mr. Harper would have to decide whether to replace the minister right away if Mr. Flaherty tells him this is his final term in office.

Mr. Nanos, however, points out that the Harper government might unsettle markets by replacing both Bank of Canada governor Mark Carney – who's leaving for England at the end of June – and Mr. Flaherty at the same time. "That might be too much of a change. Until the new Bank of Canada governor is settled, they are probably going to want to keep Flaherty there."

While the Prime Minister is putting a fresh coat of paint on his government, the overriding political imperative in Ottawa for the next two years is balancing the budget. The Conservatives are determined to retire the deficit by 2015 – barring a sudden and drastic drop in economic fortunes.

Mr. Harper needs this. He promised to eliminate the deficit in the last campaign, and his strategy for the next election is predicated on a balanced budget. The Conservatives want to deliver on pricey political promises such as income-tax splitting that should form the core of their next election platform but are contingent upon surplus cash in federal coffers. These include a fitness tax credit as well as a $1.8-billion income-splitting tax cut that would allow parents of children under 18 to share up to $50,000 of income for tax purposes. This would enable the higher-earning spouse to flow some of his or her income to a partner in a lower tax bracket.

All signs suggest the Conservative's fall Throne Speech will focus on the unfinished business of economic reforms that have become a mainstay for a government with little money to spend but a desire to make Canada more competitive. It should wrap together labour market changes to attract skilled foreigners faster, find more jobs for aboriginals, close loopholes that allow too many temporary overseas workers, and enact the new job skills grant announced in Budget 2013. It will include references to Immigration Minister Jason Kenney's planned Expressions of Interest system for more quickly locating skilled immigrants, as well as concerted efforts to find new markets for Canadian petroleum such as the Gateway project.

The Prime Minister's Office rejects the idea Mr. Harper's brand needs to change.

"For us, the brand is the economy," said Andrew MacDougall, Mr. Harper's director of communications. "That's what the Prime Minister cares about and thinks about. We're facing some tough circumstances out in the world and he's not going to take his focus off this and he's not going to change what he is. That's not what the country needs right now. We need someone who has the experience and wherewithal to keep moving along with the reforms we need to make."