While Canada maintains a sharp watch on the U.S. economy in 1979, America will be keeping an eye on Canadian politics.

A recession south of the border will probably mean a sixth successive year of sluggish growth for Canada. And since it is also election year there, the Carter administration may be interested to see if Prime Minister Pierre Trudeau, now trailing in the polls, can stimulate his economy enough to pull off an upset victory.

Economic malaise seems bound to continue in Canada, judging from private forecasts. Real growth, according to the Conference Board in Canada, can be expected to rise 3.4 percent, compared with an estimated 3.3 percent in 1978. Only six out of the 10 provinces can expect real growth this year. A national unemployment rate of 8.8 percent, up 4/10ths of a percent, is anticipated.

On the more positive side, productivity, which dipped to minus 0.3 percent last year, will regain its 1977 level of 1.4 percent. The Consumer Price Index will moderate to 7.8 percent from 9 percent in 1978, which was marked by a decline in the dollar and especially high food prices (up 16 percent overall, while beef jumped 42 percent in the year ending in October).

Other nongovernmental Canadian economists predict a real GNP is low as 2.2 percent, and a jobless rate ranging up to 9.3 percent. From abroad, the Organization for Economic Cooperation and Development foresees a 1979 Canadian GNP in the 3 percent range. Not surprisingly, Trudeau's government looks through rosier glasses. In his budget message last November, Finance Minister Jean Chretien opined that 1979 would bring a real national output of 4 to 4.5 percent, and price increases to an average of 6.5 percent.

He announced a 1979-80 budget deficit of $12.9 billion, up slightly from the previous fiscal year's estimated $12.1 billion and 1977-78's actual dificit of $10 billion. (These figures are expressed in Canadian dollars; were they in U.S. currency the deficits would appear much smaller because of the devaluation of the Canadian dollar, which has dropped 18 percent against the U.S. dollar in two years. Economic forecasters are predicting that the Canadian dollar will inch up to around 88 U.S. cents in 1979.)

Back in November, the Liberal Party's finance minister advocated a rather conservative fiscal policy. Chretien told the House of Commons, "I have been urged to cut taxes massively in order to stimulate the economy. Given the expansionary forces which are already at work, I do not think this would be wise, particularly when out cash requirements are so high."

Among the cuts he called for were a decrease from 12 to 9 percent in the ad valorem manufacturers' sales tax, amounting to $1 billion, which should be passed on to consumers in the form of lower prices, a $1.2 villion reduction in federal personal income taxes, and lower unemployment insurance premiums. He also called for more tax write-offs for mining, oil and gas exploration, and pollution control equipment as well as targeted incentives aimed at increasing investment tax credits for those regions in most distress.

Among the adverse factors influencing the Canadian economy this year are many sensitive labor negotiations following the end of three years of wage and price controls. The 300,000 unionized government employes, who received effective wage increases of 7.3 percent last year, compared with 8.6 percent in the private sector, are expected to demand a catch-up. Housing construction and consumption of durable goods will also be off in 1979.

Interest rates and stock prices will follow those of the U.S. Analysts warn investors of falling yields in the Canadian bond markets. They favor pulp and paper stocks as well as oil and gas stocks, helped by proposed price increases. The outlook is for more petroleum company mergers this year, following the announced $1.4 billion takeover of Pacific Petroleum, formerly owned in part by a U.S. company, by the government-owned oil company, PetroCanada.

The only significant source of growth, this year, according to the Conference Board, will be renewed inbestment in machinery and equipment by business, up 5.7 percent in real terms compared with 2 percent in 1978, as a result of a significant increase in profits last year.

A quarter of Canada's GNP and 70 percent of its merchandise exports go the the United States. The Trudeau government is counting on its devalued dollar to stimulate exports and build a $4 billion trade surplus. But if the U.S. encounters a serious economic slowdown this year, leading to a fall off in consumer spending, and if Canada cannot market enough goods in Europe and the third world, a desperate Trudeau -- running 20 percent behind his Conservative opponent in the last Gallup poll -- may try to stimulate the economy further, even as the risk of increasing inflation