CANADA

THE PRINCIPAL VOTE

HAUNTED BY THE PRINCIPAL GROUP SCANDAL, ALBERTA’S TORIES STILL SEEM LIKELY TO WIN A MAJORITY

JOHN HOWSE March 20 1989
CANADA

THE PRINCIPAL VOTE

HAUNTED BY THE PRINCIPAL GROUP SCANDAL, ALBERTA’S TORIES STILL SEEM LIKELY TO WIN A MAJORITY

JOHN HOWSE March 20 1989

THE PRINCIPAL VOTE

CANADA

HAUNTED BY THE PRINCIPAL GROUP SCANDAL, ALBERTA’S TORIES STILL SEEM LIKELY TO WIN A MAJORITY

It began as a simple exercise in mainstreeting. But as Alberta Premier Donald Getty and his star candidate, Calgary Mayor Ralph Klein, met the voters on Calgary’s 17th Avenue S.W. on March 4, they were suddenly surrounded by about 150 angry members of the Principal Investors Protection Association. Getty, Klein and local Tory candidate Kate Thrasher tried to continue their walkabout, but the protesters kept interrupting them with demands to know why the government had allowed the financial services conglomerate Principal Group Ltd. to continue operations in the face of warnings about its financial health. The companies collapsed in 1987—taking about $290 million worth of Albertans’ investments with them. Finally, Getty and Klein sought refuge in a local art gallery. There, the premier acknowledged that the early election he called for March 20 had turned into an unexpectedly tough campaign. Cracked Getty, a former quarterback for the Canadian Football League’s Edmonton Eskimos: “I have been in tougher crowds, but usually they were tackles.”

Indeed, the Principal Group collapse has haunted the Tories throughout the campaign that began on Feb. 20. But many Albertans say that by calling an election less than three years into his mandate, the premier may have avoided the worst fallout of the scandal. After conducting a 16-month-long inquiry into the Principal collapse, Calgary lawyer William Code is due to deliver his findings within several months. His report is widely expected to be critical of the government’s regulatory procedures—making it in Getty’s interest to go to the people well in advance of its release.

Getty’s early election call also gained him an advantage over his New Democratic Party and Liberal opponents, who were unprepared for a campaign. As a result, despite a gaffe-ridden campaign, his Conservatives— who held 61 seats in the last legislature compared with 16 for the NDP and four for the Liberals—seem assured of winning another strong majority.

Last week, the Principal Group scandal was clearly at the centre of the election. For one thing, NDP Leader Ray Martin capitalized on testimony from Alberta officials during the Code inquiry that a cabinet committee exerted its influence to allow two Principal subsidiaries to remain in business—despite being aware of the fact that the companies were losing millions of dollars. Martin told voters that Code’s report

is certain to provide a scathing indictment of the government’s role in supporting the failing trust company. ‘ ‘There is absolutely no doubt c0Cie inquiry will be damaging to the government,” he said. And John Rodden, president of the 32,000-member Principal Investors Protection Association, pledged to continue disrupting the Tory campaign. Said Rodden: “We feel the government went far beyond neglect—even to civil conspiracy.”

For Klein, meanwhile, being in the middle of such angry confrontation is a new experience. Klein, who has been Calgary’s immensely popular mayor for 8V2 years, won the Tory nomination in the downtown riding of Calgary Elbow last month. Now, most observers say that Klein, widely touted as a future cabinet minister and possible successor to Getty, will easily win his seat. But another popular mayor who stepped onto the provincial stage is facing the possibility of defeat. In 1988, Laurence Decore, mayor of Edmonton since 1983, stepped down to run for the leadership of the provincial Liberal party. He won that position last October—but is now in a tough fight in his Edmonton Glengarry riding with Tory John Belzerowski, a popular lawyer with strong links to the riding’s Ukrainian and Polish voters.

There were widespread hopes among Liberals that Decore’s leadership would help the party replace the NDP as the official opposition. But now, even though the Liberals are running a full slate of 83 candidates for the first time, their campaign has clearly foundered. The early election caught them off-balance and financially ill-prepared. Then, Decore demoralized many party workers by announcing midway through the campaign that he will resign if he does not win his riding. And Getty has refused to grant Decore what he badly needs to enhance his own and his party’s profiles—a televised leaders’ debate.

For his part, the NDP’s Martin is campaigning against the possibility of a Liberal resurgence. “If Albertans want an opposition, we are the only ones,” Martin told Maclean’s. “It should be clear that voting for other opposition parties is a waste of a vote.” The NDP’s advertisements appeal to Liberal supporters to vote for the New Democrats rather than splitting the opposition vote and running the risk of giving the Tories more seats. But Getty’s powerful Tories have mounted intense campaigns in ridings that the NDP and Liberals already hold. Said Martin: “They want to obliterate the opposition.”

Meanwhile, Getty has tried to run a safe campaign by emphasizing family values and the dangers of drug abuse. A Gallup poll conducted four days before the election was called gave the Tories a huge lead, with the support of 54 per cent of decided voters, compared with 22 per cent for the NDP and 16 per cent for the Liberals. Still, the Tory campaign has been plagued by mistakes. At the news conference to kick off the campaign, Getty ran into trouble by trying to make wife abuse the subject of humor. “I maybe whack my kids, beat my wife, but I’ve never abused a seat belt,” the premier said in response to a reporter’s question about whether he wore seat belts. Getty later apologized after being criticized by women’s groups and some of his own supporters.

Then, on March 1, Getty announced a new program to subsidize interest rates above 12 per cent on the first $75,000 of home mortgages. As well, the premier promised first-time home buyers $4,000 interest-free loans for down payments or mortgages. But later, Getty publicly rebuked one of his officials over discrepancies in statements about the program’s confusing details. And then one of Getty’s own backbenchers, Calgary MLA Stanley Nelson, criticized the plan, saying that it would entice home buyers who may not be able to afford a mortgage. For his part, Kenneth Shearer, president of the Edmonton Real Estate Board, said that at a time of sharp increases in housing prices in Calgary and Edmonton, Getty’s program will only drive more people onto the market and result in even higher prices.

Meanwhile, other concerns developed about the mounting costs of Tory campaign promises, which various experts have estimated at more than $2 billion. Said Reuben Hamm, executive director of the Alberta Chamber of Commerce: “We are talking about tax dollars.” And in a March 8 editorial, the Calgary Herald, which usually supports the Tories, called for a halt after Getty pledged to pave 8,000 km of secondary roads at a cost of at least $1 billion. Still, the campaign promises may be one way of diverting public attention from the Conservatives’ biggest potential problem—the shadow that the Principal scandal has cast over the campaign.

JOHN HOWSE in Calgary