* Conservatives win lifts uncertainty of minority
* Expected to help Canada compete globally
* Tax cuts, takeover view seen long-term positive for shrs
* Relief in energy sector on go-slow climate policy
* TSX, Canadian dollar weaken on global growth worries
By Ka Yan Ng and Solarina Ho
TORONTO, May 3 (Reuters) - Canada's new majority government looks set to deliver a business-friendly agenda that should please global investors and help support markets for years to come.
The Conservatives, who won 167 of the 308 seats in the House of Commons in Monday's federal election, have long planned to reduce the corporate tax rate and eliminate the country's record budget deficit within the next few years.
By forming Canada's first majority government in almost seven years, the self-described guardians of the country's commodity-rich economy will face no obstacles in implementing those policies.
"From our perspective, this sends a message of stability for a while and that is good for business overall and for the securities business in particular," said Dan Barclay, head of M&A for Canada at Bank of Montreal.
Canadian stocks market traded sideways in the final week of the election campaign, partly because of wariness inspired by the surge of the left-leaning New Democratic Party (NDP) in public opinion polls that might have upset the status quo on Bay Street. [ID:nN29174448]
The NDP sought to reverse corporate tax hikes and toughen regulation of Canada's energy sector, which unnerved some investors. Canada is the largest provider of energy to the United States.
CIBC World Markets chief economist Avery Shenfeld said the Conservatives have a cautious approach in greenhouse gas regulation that will likely mean awaiting for any U.S. action before making a move of their own.
"Obviously a majority government will give us a stable
government for a number of years," Rick George, chief executive
at Suncor Energy Inc
While the NDP became the official opposition for the first time, it also lost its ability to be the balance of power in a minority parliament.
The election was greeted with relief by investors, who initially drove the currency higher and welcomed the government's pro-business policies.
But the news was quickly overshadowed by global growth concerns that wiped out the Canadian dollar's
Still, the Canadian dollar outperformed its commodity-liked peers and Canadian government bonds fared even better than safe-haven U.S. Treasuries.
COMPETITION, ENERGY, TELCOS
The Conservatives 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 eliminate the deficit. Prime Minister Stephen Harper said the government's first job would be to implement what was set out in their March budget.
"This gives them time to really work on a good budget and they don't now have to snuggle up to the other parties. They can make a budget that works for them and works on getting deficit control under way," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
The pro-business government might also look diversify its export markets and forge new bilateral trade agreements, said David Madani, Canada economist at Capital Economics.
Investors also like that the Conservative government is now more likely to approve foreign investment in Canada than the New Democrats would have been.
The shift is seen boosting the chances that the London
Stock Exchange's
The election could also have implications for the telecoms
space, as the Conservatives have traditional been in favor of
more foreign investment. Analysts said this could pose a
challenge for established players such as Rogers Communications
"Allowing foreign control in Canadian telecom could create greater competition for the wireless incumbents and benefit the new wireless entrants by providing them with better access to capital and the flexibility to simplify their business structures," wrote Phillip Huang, analyst at UBS Investment Research.
All in all, investors welcomed the removal of the political risk hurdle that comes with minority governments, even in a country that has low geopolitical drama.
"Markets like certainty, they like to foresee things, and this election basically has provided the most clarity that we could've gotten in terms of an outcome," said Gareth Watson, vice president for investment management and research at Richardson GMP. (Additional reporting by S. John Tilak, Julie Gordon, Claire Sibonney in Toronto, Scott Haggett in Calgary, and Pav Jordan in Halifax; editing by Jeffrey Hodgson and Frank McGurty)