Political satirist Larry Zolf once called the Canadian Senate “the only museum in the world where all the artifacts, specimens, relics and fossils are alive—if barely breathing.” But last week security guards stationed in the normally tranquil corridors outside the red chamber were startled by swarms of cameraand microphonetoting journalists who were gathering to record the unlikely drama of a heated debate. The cause of the controversy was the refusal by the Senate’s Liberal majority to pass Bill C-ll, a simple borrowing bill introduced by the governing Conservatives—and one that had already received all-party approval in the Commons in December. Said Finance Minister Michael Wilson: “The senators’ actions are costing the taxpayers real money.” But Senate Opposition Leader Allan MacEachen swiftly dismissed those charges as “ludicrous.” Standoff: The saga began on the last day before Christmas, when the House of Commons passed a bill permitting the government to borrow $7 billion to cover its basic expenses for the remainder of the fiscal year, ending March 31, as well as $12 billion for the first few months of fiscal 1985-86. But when the bill reached the Upper House on Jan. 22, the 72 Liberal senators who dominate the 104-member Senate balked. Despite mounting pressure from the Conservatives, they refused to pass the bill until they saw the government’s 1985 spending estimates, expected to be presented next week. Without parliamentary borrowing authority the Conservatives were forced to cancel the government’s regular bond auctions, borrowing only enough money at the weekly auction of treasury bills —a type of federal bond—to pay off maturing bills.
Last week, with the Conservatives lacking the money to defend the sagging Canadian dollar against the soaring American greenback, the standoff turned into a crisis. On Monday, after unsuccessfully urging the Liberal-dominated Senate Committee on National Finance to pass Bill C-ll, Wilson walked out of the meeting. The next day the government invoked a rarely used law (an order-in-council under Section 39 of the Financial Administration Act) allowing it to borrow funds for six months or less without Parliament’s approval.
The government quickly borrowed $500 million (U.S.) from a group of foreign banks and used it to buy unwanted Canadian dollars on the money markets in an ineffective attempt to slow
the dollar’s fall. Then, on Wednesday the Conservatives passed a second order-in-council, permitting Ottawa to borrow another $500 million in Canadian dollars on the domestic market to be used to pay general government expenses. And on Friday, after the markets closed, Wilson announced another $900-million borrowing to help the dollar. Wilson charged that the Senate’s tactics had cost the treasury nearly $2
million in extra interest charges by forcing the government to go to short-term money markets for emergency funds.
Crisis: At a packed news conference on Thursday—after the Senate defeated a government motion to order the finance committee to endorse C-ll —MacEachen defended the actions of the Liberal senators. Said MacEachen: “Parliament has refused every government since Confederation borrowing authority for a year for which it has not presented its spending plans. I believe
that the Senate in this case has demonstrated its relevance to the political process.”
The current crisis will likely end this week when the Senate finally receives the government’s spending estimates, which were held up because the House of Commons was not sitting last week. But the chamber’s action has already raised serious concerns about its proper role in a parliamentary democracy. In a letter to Opposition Leader John Turner, dated Feb. 13 and released by the Prime Minister’s Office the next day, Brian Mulroney said that the Senate delay was “wholly unacceptable.. .The issue is not only that the Senate is obstructing the government’s debt management program to the detriment of Canadian taxpayers. The most important principle is that the Senate, a nonelected body, is subverting an order of the House of Commons.” Indeed, many Conservatives and New Democrats also questioned Turner’s ability to control the Liberal senators—many of them appointed by former prime minister Pierre Trudeau —who have been instrumental in blocking Bill C-ll.
Weakening: For his
part, MacEachen, himself a former finance minister whom Trudeau appointed to the Senate last spring, maintained
that Turner had no hand ^ in the Liberal senators’ ^ tactics. He dismissed as g “preposterous” sugges-
tions that the actions of his Senate colleagues were weakening Turner’s
Still, the episode made it clear that the historically ignored Senate will become the object of intense scrutiny in the current Parliament. And with the Liberal side of the Upper House now occupied by such veteran politicians as MacEachen, longtime party strategist Keith Davey, former Trudeau legislative assistant Joyce Fairbairn and adviser Michael Kirby, it is unlikely that the Senate will soon fall back into obscurity.
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