A lot of people are treating this with too much emotion--and I think part of it is that there's some who are conflating what should be done politically with what can be done constitutionally. There's nothing out of the ordinary about the minority parties forming a coalition in order to govern. The Bloc does create some bad "optics," but the fact is that the constitution doesn't stipulate as to which platforms are acceptable for a governing party, it merely sets the rules. A coalition government is within the rules as they are laid out, and to suggest that somehow this is going to turn Canada into a banana-republic dictatorship is just fearmongering. Only a conservative partisan could think that a party with a significant minority of votes and of seats has a greater mandate under our system than a coalition with majorities of both. Did Canadians vote for a coalition? Of course not--but if we accept that we must also accept that Canadians didn't really vote for a conservative government either. It's up to parliament to form a stable government under current conditions, and I for one would rather they did that (however they do it--and I agree with the poster who suggested that Harper's next move is to recruit disaffected MPs from other parties--he has the strongest mandate of any single party leader, and that's his last remaining advantage.)
However, two things ought to be clear to partisans on both sides.
1. Harper has massively overplayed his hand, and has lost. The outcome of this is very likely that he will remain PM, but will be forced to include the opposition parties much more meaningfully in his government. There's no winning play for him any more, only damage control.
2. The Liberals have probably won this round, but they must be careful. To attempt to form a government would in my view be an incredibly risky play for at least two reasons. a. It may seem undemocratic, and at best will polarize partisans on both sides, which won't help them in the next election, at worst it will play poorly among voters across the country, leaving them in the wilderness for a decade a la the PCs in the 90s. b. This is not a good time to take the reins of government and to make yourself responsible for the bad economy. The smarter (if more crass and cynical) play is to let Harper hoist himself on his own petard for 24 months and then bring a more unpopular, failed government down at a time when Canadians might be readier for a change.
The real winners here? The Bloc. They clearly will now hold the balance of power in either a continued Conservative government OR in a new coalition. It's unlikely that the Liberals will form a coalition government (in my view) because I think that would be a massive overplay of their hand. But even if they don't, the CPC has to govern knowing that the Bloc can bring down their government to-morrow if they choose, and that a new coalition is ready in the wings should that happen. Either way, the Bloc wins. To sum up this situation for each party:
1. Harper: Lose-Lose. He needs to choose the devil he'd rather deal with now, and I suspect he'll get in bed with the Bloc in order to keep the reins of power. He has massively overplayed his hand, and needs to decide which flavour of **** sandwich he'd rather eat.
2. Dion: Lose-Lose. He's on the outs anyway. Best case is a very temporary stint in the PM's office at the worst possible time to take over.
3. Ignatieff (probably): Win-Lose. If he plays this right, he can preside over a strengthened opposition and take on a weakened Harper in the next election. If he and the Liberals overplay their hand, they could easily find themselves staring down the barrel of an election that they're guaranteed to lose.
4. Layton: Win-Push. He has nothing to lose--he stakes nothing on the coalition, loses nothing if it fails, but stands to gain less either way. The NDP is pretty much in the wilderness anyway.
5. The Bloc: Win-Win. This game is over as far as the Bloc is concerned. They now hold the balance of power no matter what happens.
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