Canada's untested New Democrats take early lead in campaign

Led by Thomas Mulcair, a 60-year-old lawyer and former provincial Liberal cabinet minister in Quebec, the NDP has climbed steadily forward in the race to form Canada's next government. Polls now show them tied with or just ahead of Prime Minister Stephen Harper's Conservatives after spending the past two years firmly in third place.

Polling aggregator ThreeHundredEight.com's latest averages have the New Democrats at 33 percent support nationally, with the Conservatives in second at 29 percent and Justin Trudeau's federal Liberals close behind at 26 percent. And after more than nine years of Conservative rule, there's also a significant desire for change in Canada.

One poll last week showed 77 percent of respondents think it's time for a new government. "It's a pretty large number," said Bruce Anderson, chairman of Abacus Data, whose July 8 survey mirrored ThreeHundredEight's averages on national vote intention.

"That has to be the thing you focus on the most," the pollster said. "The Conservatives can't afford to start the campaign believing the thing they need to do is tend to the group that supported them in 2011" when they won their first majority government.

The rise in NDP fortunes is another bad omen for Harper, 56, whose Conservatives are seeking a fourth consecutive term with a thinning bench of incumbent lawmakers and amid economic headwinds that put their promise of a balanced budget into question.

Though it has never governed nationally, the NDP took power in Alberta in May. Voters in the oil-rich province, which includes Harper's own district, rejected the Progressive Conservatives for the first time since 1971. However, whether the federal surge can last is unclear.

Some polls suggest the NDP has peaked and is now slipping back. And Mulcair has found himself in controversies, including misstating the current federal corporate tax rate when asked about his plan to increase it.

Nonetheless, his candidates say they sense the wind in their sails. "I can just hear the difference at the doorstep," NDP lawmaker Peggy Nash said by phone from Toronto.

The prospect of an NDP win could affect markets. NDP Premier Rachel Notley won office in Alberta after pledging to raise provincial corporate taxes to 12 percent from 10 percent, and to review the system of energy royalties. On May 6 -- the day after Notley won her majority -- the Toronto stock exchange's energy index dropped 2.5 percent.

In a report this week, David Doyle of Toronto-based Macquarie Capital Markets Canada Ltd. noted the federal NDP favors taxing capital gains at the same rate as salaries. The policy uncertainty of an NDP win "could weigh on" the performance of the S&P/TSX Composite Index, the report said, with banks, energy and airline stocks facing the "greatest headwinds" if the NDP is elected in Ottawa. The firm estimated the odds of an NDP victory, whether a majority or minority, at 60 percent.

The federal NDP favors an unspecified corporate tax increase; a small-business tax cut; a national program for $15- a-day childcare; setting a national minimum wage; and abolishing the Senate, Canada's appointed upper chamber of lawmakers whose recent controversies have plagued Harper.

It's a policy mix that differentiates the party from the Liberals, who would stand pat on corporate taxes, expand family benefits and reform the electoral system. The Liberals and NDP are also divided over an anti-terrorism law, known as Bill C-51, that critics say infringes on civil liberties. Mulcair opposed it in the House of Commons; Trudeau, 43, supported Harper's Conservatives in passing it while pledging to change parts of it if his Liberals are elected.

A Nanos Research poll conducted for The Globe and Mail last week showed 52 percent of respondents saying the NDP "represents the clearest change from the current Stephen Harper government," compared to 19 percent for the Liberals.

NDP support is broad based. New Democrats lead among women, are tied for the lead among men, and lead among voters 18 to 44, according to the Abacus poll. They're also tied for the lead in Ontario, Canada's most populous and seat-rich province, and are leading in Quebec and British Columbia, the next two most populous provinces.

"They're obviously going to come under intense scrutiny as the front-runners right now, and it remains to be seen how that's going to work out," Anderson said. "With the movement that we've seen over the last year, any party can win this."

At current support levels, ThreeHundredEight projects the NDP to win a similar or slightly higher number of seats than the Conservatives, though both shy of a majority. Canada had minority governments from 2004 to 2011 and the country appears set to return to that situation unless one party can pull clearly ahead of the others by October.

Experience and economic credentials are among the NDP's challenges. Canada's economy has contracted for four consecutive months and its trade deficit is setting records, prompting some private-sector economists to say the country is probably in recession. "There has been a downturn and the reason for that has been the downturn in the global economy," Harper said on Saturday.

Some 41 percent of respondents in the Nanos poll said the Liberals -- who governed from 1993 to 2006 -- were the most experienced opposition party, compared to 27 percent for the NDP. The Liberals also held a slight edge, 30 percent to 27 percent, over the NDP when respondents were asked which opposition party they trust on economic matters.

"What the survey shows is there's a significant amount of potential for the New Democrats, but for them to actually win the election they have to actually demonstrate they're a government in waiting," pollster Nik Nanos said in a July 10 interview.

Nash, the NDP lawmaker, was first elected in her Toronto riding in 2006, lost to a Liberal in 2008 and won again in 2011. That experience left her well versed in the struggle between Canada's two main opposition parties to emerge as the top alternative to Harper's united Conservative Party.

"I hear a lot of people calling for a new government," she said, adding that she knows how quickly support can shift. "It's going to be a very, very interesting campaign, whatever the outcome."

_ With assistance from Stefanie Batcho-Lino in Toronto.