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Conservatives romp to crushing Canadian election win

Tue, 3 May 2011 04:25 GMT

Source: reuters // Reuters

* Conservatives campaigned on need to keep economy strong

* Liberals reduced to third place after NDP

* Result seen positive for Canadian dollar, markets (Adds quotes from Liberals, Conservatives, Green victory)

By Janet Guttsman and David Ljunggren

OTTAWA, May 2 (Reuters) - Canada's ruling Conservatives won a crushing victory in Monday's federal election, cementing plans for tax cuts and a pro-business agenda, as the left-wing vote split and Quebec separatists faded to almost nothing.

Provisional results showed the Conservatives had 166 seats in Parliament, well above the 155 they needed to transform their minority government into a majority. They won 40 percent of the vote, more than most pollsters had expected.

"Canadian politics has changed dramatically tonight," said Jason Kenney, immigration minister in the last Conservative government. "Canadians have gotten what they want; a stable majority which will focus on governing and economic growth and responsible fiscal policy."

The Conservatives, describing themselves as the guardians of a surprisingly resilient Canadian economy, had stressed throughout the election campaign that they needed a majority to keep the economy strong, and they promised a string of tax-cut goodies that will take effect once they balance the budget.

The Canadian dollar firmed as the results emerged, and analysts expected the stock market to follow it up on Tuesday.

"I think generally this is probably very good for the Canadian dollar," said Firas Askari, head of foreign exchange trading at BMO Capital Markets. "We haven't had a majority government in some years and I think this provides a measure of stability that the market was looking for."

The provisional results showed the left-leaning NDP winning around 103 seats, by far its strongest showing, and catapulting itself into the position of official opposition in the nation of more than 34 million people.

The NDP gains came largely at the expense of the separatist Bloc Quebecois and of the once-mighty Liberal Party, which lost more than half its seats in a dismal black eye for party leader Michael Ignatieff, a broadcaster and academic turned politician who never managed to connect with Canadians.

"We have seen tonight I think the emergence of a polarization in Canadian politics," Ignatieff said in a sad address to the party faithful.

"We have a government that will pretend to govern from the center and there's a risk it will move the the country to the right. We will have an official opposition that will criticize from the center but possibly move the country to the left."

He added: "It's tough to lose like this."

PARTY MERGER TALK

The result was a historical low for the Liberals, who saw both their lowest seat total ever and their smallest share of the popular vote, at just under 20 percent.

Their massive defeat will prompt more talk about a possible merger with New Democrats to create a united center-left party capable of defeating the Conservatives.

The Bloc Quebecois was set to win just three seats, a sign perhaps that Quebeckers were fed up with being represented in Ottawa by a party that doesn't want Canada to exist in its present form. Party leader Gilles Duceppe lost his seat and said he would quit.

Before the election the Bloc, the federal offshoot of a party that wants independence for French-speaking Quebec, had 47 seats, a strong majority of seats in the province.

"It may even give the Canadian dollar an extra boost, given the fact that perhaps that the question of sovereignty is really going to be put on the back burner," said Serge Pepin, of BMO Investments in Toronto.

"Canadian markets should react relatively positively."

In a first for Canada, Green Party leader Elizabeth May captured the party's first seat in Parliament, where she would be a vocal critic of a Conservative government that opponents say has dragged its heels on global warming.

Before the election, the Conservatives had 143 seats, compared to 77 for the Liberals and 36 for the New Democrats. There were two independents and three seats were vacant. (Additional reporting by Pav Jordan, Jeffrey Jones, Scott Haggett, Randall Palmer, Allan Dowd, Claire Sibonney and Louise Egan; Editing by Eric Walsh)