By Nelson Wyatt
MONTREAL, April 2 (Reuters) - The biggest scandal of Canadian Prime Minister Justin Trudeau's tenure is starting to hit his fortunes in the populous province of Quebec, where the ruling Liberals say they need to pick up seats in an October election to remain in power.
Trudeau has been on the defensive since Feb. 7 over allegations that government officials inappropriately leaned on former Justice Minister Jody Wilson-Raybould last year to ensure Quebec-based construction company SNC-Lavalin Group Inc SNC.TO escaped a corruption trial by paying a fine instead.
Trudeau's message that he was worried about potential job losses initially played well in his home province of Quebec, where the Liberals hold 40 of the 78 seats in the 338-seat federal House of Commons.
His officials say Quebec media has been much less critical of the affair than elsewhere in Canada. But amid relentless news coverage, recent polls show the Liberals' lead over the official opposition Conservatives is shrinking.
"He (Trudeau) has lost some ground in Quebec ... people have questions about the way this file was handled," said Daniel Beland, director of the McGill Institute for the Study of Canada in Montreal.
"At the same time, I think people put more emphasis on the economic side of the issue rather than maybe on the constitutional or legal side of it," he added.
Trudeau has denied any wrongdoing.
Liberals, who had once predicted the party could win an extra 20 seats in Quebec, now say that 15 is the most likely maximum gain. In a tight election, that could make all the difference.
Philippe Fournier, a poll analyst for 338canada.com, said the Liberals were now hovering between 36 to 38 percent support in Quebec as opposed to 44 or 45 percent before the scandal.
Fournier said even with the drop, the Liberals have an edge, since support for their rivals was more spread out than in other provinces.
Opinion was divided on the streets of downtown Montreal on Tuesday about how much the scandal would affect support for Trudeau and his team.
"There's a lot we don't know," said pensioner Louise Gagne, adding the Liberals had definitely taken a hit. "Is Mr. Trudeau hiding something?"
Henri Cordeau, a 22-year-old university business student, questioned how long the public would bother to pay attention.
"People just kind of forget at some point. I think worse things could happen," he said. (Additional reporting and editing by David Ljunggren, editing by G Crosse)