Canadian Prime Minister Stephen Harper, head of the Conservative Party, had walked a political tightrope for five years as the leader of a minority government in Canada's parliamentary system. His opponents, upset by policies such as a reduction in corporate tax rates, sought a no-confidence vote in Parliament in 2011. It passed Parliament overwhelmingly, toppling Harper's government and forcing national elections for a new Parliament.
The political victory was short-lived – the Conservative Party won the May 2011 election easily and emerged as the ruling party in Canada. This allowed Mr. Harper to continue to pursue a policy of deficit and tax reduction.
Canadian voters faced the kinds of choices we have been discussing. Opposition parties – the New Democratic Party (NDP) and the more moderate Liberal Party – sought higher corporate tax rates and less deficit reduction than those advocated by the Conservatives. Under Mr. Harper, the deficit had fallen by one-third in 2010. He promises a surplus budget by 2015, a plan the International Monetary Fund has termed "strong and credible".
Canada's unemployment rate in May, 2011 was 7.4 percent compared to a U.S. rate that month of 9.1 percent. GDP growth in Canada was 3.1 percent in 2010; the Bank of Canada projects 4.2 for its growth rate the first quarter of 2011, compared to a U.S. rate for that quarter of 1.8 percent.
Mr. Stephens employed a stimulus package to battle the recession that began in Canada in 2008. He scaled back that effort in 2010 and 2011, producing substantial reductions in the deficit.
Writing on the eve of the election, Wall Street Journal columnist Mary Anastasia O'Grady termed the vote a "referendum on limited government". Whether or not that characterization was accurate, Canadians clearly made a choice that will result in lower taxes and less spending than the packages offered by the NDP and Liberal Party.
While the issue did not seem to figure prominently in the 2011 campaign, the NDP platform promised to reduce Canada's greenhouse gas emissions, which have increased with the development of huge oil deposits in Alberta, deposits that have put Canada in third place (behind Venezuela and Saudi Arabia) in the world in terms of oil reserves. Mr. Harper and the Conservatives have promised to proceed with this development as a key factor in Canada's growth, while the NDP would restrict it sharply. It is a classic case of the problem when choices are made between environmental quality and economic growth.