Canada

The Liberals return to oft-stated ways

Robert Lewis April 28 1980
Canada

The Liberals return to oft-stated ways

Robert Lewis April 28 1980

The Liberals return to oft-stated ways

Robert Lewis

When Pierre Trudeau and Joe Clark uttered their first words in the Commons last week, the live television broadcast on Parliament Hill transmitted their voices out of sync with the lip movements. The disembodied tone and repeated references by MPs to “Mr. Speaker”—who, quite evidently, was Madame Jeanne Sauvé—seemed only fitting in a chamber of talk that has been closed because of elections for all but two months since November, 1979. As the throne speech intoned by Governor-General Edward Schreyer made clear, absence made the problems grow profounder.

The referendum in Quebec and its aftermath, of course, are destined to dominate all else. But other immediate challenges are only slightly less daunting: soaring interest rates, layoffs in the automotive industry and the unresolved dispute over the price of western oil and gas.

The crunch on interest rates owes most to the proverbial North American dream of home ownership. Money is going at 14% to 16% per cent and 350,000 Canadians face mortgage renewals this year. The government pledges “to assist those unable to bear the burden of renegotiating their home mortgages in the present abnormal situation so that the spectre of foreclosure will be avoided.”

The catch is that only two per cent (or 7,000) will qualify for the program. Fully 90 per cent (318,000), says Finance Minister Allan MacEachen, “can bear the regrettable increases in mortgage payments” because the amounts will be below the customary benchmark of 30 per cent of gross family income. The rest who will pay more than 30 per cent, says Ottawa, have sufficient equity in their homes to keep them—so long as they can find a moneyman who will lend more than an ear: say, reduced monthly payments from extending the life of the mortgage or a one-year deal that waives payments on the principal for the first six months.

For now MacEachen plans to leave the larger problem to take care of itself. Despite demands from Opposition Leader Joe Clark, MacEachen will bring in neither a budget nor a financial statement until Energy Minister Marc Lalonde, facing a July 1 deadline, settles on a new price for oil and gas with Alberta. MacEachen also hopes a promising slip last week is the start of a trend: for the first time since the Bank of Canada moved to a floating bank rate in March, there was a fractional drop to 15.96 and five chartered banks lowered their prime rates to 17 or 17.25 per cent.

For his part, Lalonde reiterated the Liberal campaign commitment to underprice the Conservatives on gasoline prices, which looms as an act to rival Houdini under water. The Tory budget, with an 18-cent increase in the excise tax and a $4 increase on a barrel of oil, would have added 32 cents to each gallon this year. Lalonde’s pledge is “price levels to the consumer lower than in the PC budget package.” He proposes to do this by not imposing the 18-cent levy and by moving to a blended price for crude—higher prices for newly discovered oil. All the while he undertakes to leave Ottawa “with at least as much revenue as in the [Tory] Dec. 11 budget, without having to impose punitive taxes on the Canadian consumer.” To Alberta Premier Peter Lougheed, speaking to a Canadian Press dinner last week in Toronto, all of that sounded like a grab for his province’s soaring oil and gas revenues. “It would be a tragic miscalculation by Ottawa,” Lougheed warned sternly, “if they misjudged the resolve of Albertans.”

The sense of déjà vu evoked by yet another Ottawa-Alberta war of words was mildly offset by some new twists. Francis Fox, who as solicitor-general repeatedly invoked a section of the Federal Court Act to prevent release of RCMP documents, was authorized to abolish the statute and to parent a freedom of information law long resisted by

Trudeau and his inner circle. The flipflop was one of the few signs that, for nine months, Ottawa indeed had a government of a different color: the fact is the Tories made access to information such a winner that not even Trudeau could stop the momentum—although the Grits are working on a scheme to place restrictions on the courts which may be asked to hear appeals against government refusals to make documents public.

There was also the matter of Windsor’s Herb Gray, sacked from Cabinet in 1974 because Trudeau thought he was a poor communicator, now born again with a mandate to strengthen the Foreign Investment Review Act. A key provision is for “performance reviews of how large foreign firms are bringing substantial benefits to Canada.”

Just how difficult a task that will be was abundantly clear last week as Gray looked Ford of Canada in the eye—and blinked. Earlier this month Gray mused about legal action if the car company, recipient of $68 million in government handouts, went ahead with plans to cut back Canadian operations. Last week Ford, in effect, said piffle: as part of the response to the loss of $1 billion last year on North American operations, the company announced the closure of a plant in Windsor and a production cut at the Oakville car and van assembly installation. Along with belt-tightening by other makers, the decision means more than 20,000 workers (see page 39) will be off the job.

Seventeen pages long, 'the throne speech had more goodies than previous Trudeau offerings. To be sure, a host of initiatives were inherited from Clark: a proposed study of pensions simply needs a French translation before release, while incentives to encourage the switch from oil to gas use and controls on the shipment of dangerous chemicals were in the works. The inclusion of oftstated Liberal commitments to toughen the rape laws, decriminalize the use of marijuana and expand opportunities for women, natives and the handicapped were more a testimony to past dithering than a sign of bold new intentions. But there were sharp contrasts to the Conservative way: a “planned and orderly” deficit reduction devoid of axewielding, creation of more Crown agencies (for example, a state trading company), a bigger boost for Petro-Canada and increased Canadian ownership in the oil and gas industry. In a sense, after an opportunistic slide to the right before defeat in 1979, the Liberals were striving to rediscover their soul in 1980. But the political body is world-weary from all the years of power. On the matter of the ultimate mission there was only a comment: “The country asks for action and action now.”