In mid-July, Bank of Canada Gov. Stephen Poloz affirmed that the country’s GDP contracted for a second consecutive quarter in the April–June 2015 period, technically meeting the definition of a recession. That is very bad news for Prime Minister Stephen Harper’s CPC government, which will be seeking re-election to a fourth consecutive term at parliamentary elections scheduled for October 19.

The economic news figures to complicate the CPC’s task of convincing voters that it deserves another term in office. Although the governing party appears to have fended off a challenge from the Liberals, the center-left NDP has enjoyed a surge in support, with recent polls of voter preferences showing Tom Mulcair’s party running neck-and-neck with the CPC or has taken a slight lead.

Barring a significant upward shift in the support for one or more of the parties over the next three months, the victor is very likely to fall short of claiming a majority in the expanded 338-member House of Commons. In the event, the winner will need to secure the backing of at least one other party to achieve confirmation of a minority government, and it is debatable whether the Liberals or the NDP would deliver the necessary support for the Conservatives.

In the near term, the government will be counting on more robust growth of non-energy exports, boosted by the further weakening of the local currency against the US dollar and increased demand as the US economy rebounds from the slowdown in the first quarter, to bring a quick end to the recession. With capital spending in the hydrocarbons industry projected to fall by 40% this year, annual real GDP growth is forecast to slow to 1%–1.5% in 2015, and the pace of expansion could come in below the lower end of that range if growth of non-energy exports falls short of expectations.