Canada’s minority Liberal government fell last night, setting the stage for a mid-January election. Good news or bad news?

The signs aren’t very encouraging, and my hopes for a decent debate are marginal given the experience of the last general election, barely a year-and-a-half ago. The election will not be fought over issues that Canadians should really start thinking about such as the future of healthcare, improving cross border relations with the US, security and rolling back a very expensive and highly expansive federal government.

The incumbent Liberals will no doubt play the “fear card” in order to entice voters away from the Conservative Party, while the latter will focus on the corruption and incompetence that has been the hallmark of Liberal rule. For the un-initiated, the fear card revolves around telling Canadians that a conservative vote equals privatization of healthcare and the establishment of a Christian-fundamentalist state where women and gays are set to forfeit all the rights they gained over the past century. Compare it to the 'blue state' take on 'red state' Bush last year, only in Canada such rhetoric actually produces tangible results at the ballot box.

The most interesting development so far is that the Liberals have added some star-power to their ticket by including Harvard scholar Michael Ignatieff, someone who is slated to become their leader if the Liberals lose this election. It was hard for the Liberals to actually find a riding where Ignatieff could run as “he supported the war in Iraq” which turned him into a somewhat complicated electoral option for the Ontario heartland.

As to the outcome, there are essentially three likely scenarios:

• The Liberals retain their minority position which means another period of instability and relentless spending in order to placate the far-left NDP which holds the balance of power;

• The Liberals win a majority, in which case we’ll see a return to Chrétien-era style politics with as a likely further downside another leadership contest halfway which also will bring about instability, and yes, more spending to align certain special interest groups;

• The Conservatives carve out a minority government in which case they will have to rely on the separatist Bloc Quebecois to stay in power. Under this scenario the furtherance of conservative policies will be subject to granting far-reaching concessions to the Bloc up to a point that the minority arrangement is no longer sustainable. If the Bloc hasn’t propelled Canada into a constitutional crisis, then another early election will surely add further, yes, instability.

Ergo, unless the Conservatives pull off the incredible and secure a majority the immediate prospects for Canada are dim, instability remains the name of the game. Canadians are sufficiently disaffected with the Liberals and will not give them a majority, but they have been doing well enough economically and won't demand drastic change by handing a majority to the Conservatives. There’s a need for change, but Canadians just can’t see why they should hand the keys to power to a relatively unknown and inarticulate conservative force while interest rates are low and the value of their homes keeps going up.

One can only hope that the campaign – which pundits view as one that will be particularly nasty – will awake the Canadian heartland and will mark at least the beginning of change. For that to happen the Conservatives, the leftist NDP and the Bloc need to make a serious effort to show Canadians the cheap opportunism and empty shell of ideas that current Prime Minister Paul Martin has been trying to sell them for the past few years, using their money. If the last campaign is any guidance, Martin has a strong ability to self-destruct, but for it to be sufficiently decisive, he needs a helping hand. And it would be nice if in the process conservative leader Stephen Harper is willing to share what he considers to be “morning in Canada”.

NOTE: Here's more on the weird dichotomy that governs Canadian politics:

Paul Martin's Liberals enter an election campaign six percentage points ahead of the Conservatives, but losing ground in Ontario and facing an increased desire for a change of government, a new poll shows.

Canadians, especially Ontarians, are less likely than they were six months ago to see Conservative Leader Stephen Harper as a scary figure with a "hidden agenda," according to a Strategic Counsel survey conducted for The Globe and Mail and CTV. But the Ontarians have not embraced Mr. Harper's party, rating the Liberals as better at managing most issues.

It's going to be an interesting campaign, really.

UPDATE: It seems Harper has kicked off the campaign in a positive way and is offering a vision for Canada's future. Good news.