Desperate...

So we come down to why Harper is looking for an election under these conditions. There are two way of looking at it, the Tories are desperate or they are arrogant. I suspect that it's a little of both. Signs of desperation: flooding Central and Eastern Canada with anti-Liberal attack ads; frequently calling people like me, who a) state during the call that I'm not a Conservative supporter and b) ran for another party during the past <em>two</em> provincial elections, and asking for money. Those attack ads aren't cheap I suspect so the Tories, though flush with funds coming in, seem to be spending money as fast as they get it. Further, the longer they wait, the worse they get in the polls, outside of Alberta. If they are to have even a hope of maintaining the seats they have, they need an election sooner than later.
The arrogance comes in on the part of Harper. Now there are likely to be Tories that aren't zealots, that can see the writing on the wall and are concerned about what could happen to them in the next election. These are not the Tories running the party. The Tory True Believers (TM, Pat. Pend.) are in charge and Harper is not only their maximum leader, but one of them. Despite his actions, Harper does truly believe his own press. His arrogance fails to let him see otherwise. So despite poor showings in the polls, the by-election losses in regions that are not the Prairies, Harper and his Tory True Believers (TM, Pat. Pend.) honestly believe they will sweep Ontario and Quebec and form a massive majority government. They're teetering on the verge of flipping from arrogant to delusional. Of course this will do nothing to help them in the next election but, like a member of the Flat Earth Society, they are unable to see the world around them for what it is. Their zealotry is getting in the way of their objectivity.
This, of course, will be the undoing of the Harper Tories. Blind faith works well in religion, in fact religion doesn't work without it, however it doesn't work in politics outside of Alberta. Blind faith in an ideology will not help when that ideology is often at odds with the general views of the voting population. It restricts you in such a way that prevents you from taking advantage of changes in the political environment. The Tory True Believers (TM, Pat. Pend) will always vote for Harper because they are blind to other options, but other voters know there are other options and if they don't like what the Tories are selling, and the polls suggest that this is the view of the voter, the voters will pick some other party.
The reason I see that Harper wants the election now, despite all good sense, is that his arrogance can't see past the fact that if the opposition pulls the plug, he won't be in control. By losing a confidence vote, Harper would be seen as weak in the eyes of his fellow Tory True Believers (TM, Pat. Pend.) and hence, that much less of a leader/man. So he has to try to make it look like the opposition is at fault for all his failures, including the failure to follow his own laws. Which is why the Tories have been spinning every story to come out of Ottawa so fast you'd think they'd achieve lift off. The problem is, Harper and his bunch have lied so much, and ignored ethics and the law so often, broken so many election promises that no one outside of their core supporters believe them anymore. So despite having gobs of cash to spend on advertising, and all the advertising the gobs of cash, both donations and taxpayer, has bought, the Harper Tories have the support of less voters now than they did last election. Not a recipe for electoral success.
So what can Harper and his merry band of Tories do to reverse all this? Well for one thing, they can start acting like a government and not like they're still in opposition. The whole angry white guy thing wears thin after awhile and the voter tires of it easily. Basically if you act like you want to be the opposition, the voter is likely to give you your wish at the next election. Secondly you can have some actual policy. A firm campaign of "We're not the Liberals" works great in Alberta, but the traction you get with that rapidly drops off the farther from Alberta's borders you get. If your policy is likely to offend most voters, then you have to look deeply at your policy, not attack the opposition and hope that no one notices that you're actually worse. This isn't the United States. most people here still vote, and they do tend to see through such tactics. This is why US style negative ads just don't work here in Canada. They didn't work for the Campbell Tories, they didn't work for Martin's Grits and they won't work for Harper's True Believers.