CANADA

TAKING CHARGE

THE LIBERALS ASSUME POWER-AND INHERIT A HOST OF HEADACHES

E. KAYE FULTON November 8 1993
CANADA

TAKING CHARGE

THE LIBERALS ASSUME POWER-AND INHERIT A HOST OF HEADACHES

E. KAYE FULTON November 8 1993

TAKING CHARGE

THE LIBERALS ASSUME POWER-AND INHERIT A HOST OF HEADACHES

CANADA

In a capital grown accustomed to solemn pomp, the change in style was as apparent as the dramatic change in government. During a private meeting at Rideau Hall last Wednesday, Governor General Ramon Hnatyshyn formally asked Liberal Leader Jean Chrétien if his party was prepared to form the government of Canada. Chrétien paused for a moment and then playfully replied: “No.” Even the nine government briefing books, delivered by the vanquished Conservative government of Kim Campbell less than 12 hours after Monday’s election, acknowledged that life in Ottawa was already different. At the request of the

Liberals, each of the 100-page burgundy and green volumes that outlined the nuts and bolts of the transfer of government was written in snappy bullet form—in deference to Chrétien’s abiding hatred of long, windy texts. “Chrétien is like a kid,” said a senior Liberal adviser. “None of this is like work to him. He finishes one book, snaps it shut and zooms on to another.”

That easygoing, even ebullient, manner concealed the magnitude of the task facing the Liberal majority government that is poised to assume power on Nov. 4—inheriting a host of headaches. Chrétien’s first problem was assembling a balanced cabinet from

the swollen ranks of 177 Liberal MPs—representing every region of the country and including all but one of Ontario’s 99 seats. Confining his circle to a handful of advisers, Chrétien also began to consider how he will fulfil an array of job-creation promises, including a $6-billion public works program to rebuild roads and sewers. Liberal insiders say that those promises pale in the light of undisclosed figures in the Tory briefing book that paint a bleaker-than-expected picture of the economy. In particular, the federal deficit now appears likely to soar from an estimated $35.5 billion to $40 billion—the highest in Canadian history. “My first priority will be to work on the economy,” Chrétien told reporters. “That’s the reason why we won the election.”

But there were other politicians with problems in the nation’s capital. Bloc Québécois Leader Lucien Bouchard, visibly unnerved by his transformation from separatist advocate to the most likely Leader of Her Majesty’s Loyal Opposition, tried to offer reassurances that his party will work for the benefit of all Canadians (page 22). Both Bouchard and Reform Leader

Preston Manning must find offices and staffs for their MPs, most of whom are inexperienced and speak only one of the official languages. The Conservatives and New Democrats, meanwhile, struggled to come to terms with the full extent of the carnage. The Tories, reduced from 153 seats to a mere two, are exploring a potentially controversial plan to divert funds from the office budgets of Tory senators to rebuild their broke and battered party. The NDP, reduced from 43 to nine

seats, is likely to ask the new Liberal government for the perks of official party status— even though it fell below the official requirement of 12 seats.

Despite the staggering change in the Ottawa landscape, the Liberal transition team provided the ammunition that Chrétien needed for a relatively smooth first week. Last March, in anticipation of the election, Chrétien asked Liberal policy adviser David Zussman, a former senior bureaucrat, to assemble a guide to the inner workings of government. Zussman consulted more than 100 former public servants, academics and business officials to compile a 250-page document dealing with the mechanics of governing. Said Zussman, a onetime dean of administration at the University of Ottawa: “This is someone who hadn’t been in government since 1984, so it was a question of bringing him up to speed.” The two met several times before the election and twice during the 47-day campaign, including a secret three-hour session at Chrétien’s cottage in Shawinigan, Que., on the eve of voting day. Not even Chrétien’s other close advisers knew of that meeting.

Although the team had carefully planned

the structures of government, only one person could fill in the names for the jobs. Last Friday, Chrétien took the first step by announcing five appointments to his inner circle. Former Quebec City mayor Jean Pelletier retained his job as chief of staff. Other appointments: longtime aide Eddie Goldenberg, a Chrétien confidant since the 1970s, as senior policy adviser; Chaviva Hosek, co-chairman of the Liberal platform committee, as director of policy and research; former executive assistant Jean Carle as director of operations; and Peter Donolo, who has been his chief media adviser since 1991, as director of communications.

Chrétien’s inner circle will also be strongly influenced by campaign aides who are going back to private life—such as Zussman; campaign chairman John Rae, who is returning to Montreal as executive vice-president of Power Corp.; and Montreal lawyer Eric Maldoff. Together, they are a close-knit band of loyalists who work well as a team—but one with obvious weaknesses. During the first troubled half of Chrétien’s time as Liberal leader, members of the once-fractious Liberal caucus staged a quiet but determined campaign to break him from the influence of his advisers. It is a closed group, difficult for outsiders with fresh ideas to penetrate. That much was evident shortly after his return to Ottawa last week. “Doors that were open during the campaign have slammed shut,” said one senior Liberal who played a significant role in the election but now feels excluded from the charmed circle. “Some of us are hoping that this extraordinary sensitivity won’t evolve into the same paranoia of the old Liberals.”

Many of those fears could dissipate when Chrétien names his cabinet this week. During a news conference last week, Chrétien deferred comment about budgets, policies and restructuring to yet unnamed cabinet ministers. Liberal advisers say that Chrétien plans to delegate much of the decision-making responsibility to individual ministers, who in turn will be ordered to rely more heavily on the bureaucracy than on political appointees—as the Tories did. Choosing his cabinet is no easy task. Montreal MP Paul Martin, the co-architect of the Liberal platform, made it clear that he wanted a creative economic platform such as Industry and Trade. But Chrétien was under intense pressure from Bay Street to calm money markets by naming Martin, a leading pro-business Liberal, to the tricky Finance portfolio. The reason for such pressure was obvious: as Martin, the former chairman of Canada Steamship Lines, once ingenuously boasted to dinner companions, “There are 25 people in the world who can change things—and I know 20 of them.”

Chrétien faced similar problems in his attempts to balance veteran MPs looking for rewards with a slate of “star candidates”— while still ensuring that strategic posts are covered. Veteran MPs Lloyd Axworthy from Winnipeg and André Quellet from Montreal, for instance, jostled for the plum job of External Affairs. While Chrétien juggled the lists, his advisers pointedly noted that the Bloc Québécois paid little attention to Ouellet’s riding during the election campaign—a clear signal that the Bloc regards Ouellet as relatively open-minded on Quebec issues and would prefer to negotiate future government initiatives with him. If Chrétien accepts that logic, he may give External Affairs to Axworthy and keep Ouellet closer to home, possibly as minister of federalprovincial relations.

But those problems pale in comparison to the full horror that Chrétien faces on federal finances. Although the new prime minister said repeatedly that he would not back away from promises even if the government’s books turn out to be worse than expected, many independent experts believe that the true picture will be an enormous shock. It is not merely the size of the deficit itself— which at an expected $40 billion is enough to rattle international money markets. Chrétien must also come to grips with the fact that the deficit is structural and that high economic growth alone will not eliminate it. The biggest hurdle will likely come when Chrétien and his new government sit down with provincial premiers within the next she months to negotiate fundamental changes to

Canada’s social system. Some analysts say that the only place to find savings on the scale needed to tame the deficit is by slashing the $26.4 billion in transfers to provincial and municipal governments and the $39.4 billion spent on unemployment and old age benefits. As Liberal MP Marcel Massé, former clerk of the Privy Council and the likely new president of the Treasury Board, told Maclean’s: “You cannot get rid of the deficit by cutting the civil service. We have to find a way to deliver services much better.”

But first, Chrétien has insisted that the Liberals act on his election promises—at whatever cost. As soon as he is sworn into office on Nov. 4, Chrétien said, he will cancel the $4.8-billion EH-101 military helicopter program despite objections from the defence industry that such a move could destroy Canada’s reputation for future projects, as

well as cost hundreds of high-tech jobs. But Chrétien remained adamant, telling reporters: “If I could do it today, I would do it today.” Still, taxpayers will be asked to absorb some loss. Chrétien conceded that revised defence figures reveal that the government loses $1 million in contract penalties each day that the program sits on Ottawa’s books. Nor is it certain that another of Chrétien’s promises—to review and possibly scrap the deal to privatize Toronto’s Pearson international airport—will not end up costing taxpayers even more. Within 48 hours of his victory, Chrétien asked former Liberal Ontario treasurer Robert Nixon to investigate the deal and report back within 30 days.

But those shadows could not completely dampen the expectant mood that prevails with any change of Ottawa’s political guard. Exhausted by 18-hour days during the cam-

paign, Liberal officials bounced back, fuelled by the anticipation of an end to their nine-year exile. Advisers say that the 59-yearold Chrétien worked solidly through the day last week—but was back home at Stornoway, the Opposition Leader’s official residence, by 8 p.m. and into bed by 10. With Campbell camped at the Prime Minister’s summer residence at Harrington Lake, Chrétien and his wife, Aline, slipped quietly over to 24 Sussex Drive last Thursday to inspect their new home, as locksmiths began changing the locks.

While 1,000 employees of former Tory members packed up their belongings on Parliament Hill last week, more than 500 résumés flooded into Liberal headquarters just days after the election from hopeful job-seekers. An unprecedented 201 rookie MPs are expected to tumble into Ottawa this week— some for the first time in their lives. One of the newcomers was Bonnie Hielde, a 38-yearold mother of 11-year-old twins who defeated Tory Fisheries Minister Ross Reid (one of two Tories the Liberals thought invincible) in the Newfoundland riding of St. John’s East. ‘This will be one of the biggest changes of my life,” she said. “I want to see what the Parliament Buildings are like.”

The mood was considerably more subdued at the final Tory cabinet meeting last Friday. Privately, senior Liberals are sympathetic to the Tories’ plight. That, however, does not translate publicly into a willingness to make exceptions that the Tories themselves refused to make while in power— when the fledgling Bloc and Reform parties were denied official party status. Reduced to a mere rump and stripped of party standing, the Conservatives are without a sitting leader, a research staff and, most important, any money to rebuild. Party officials calculate that more than 100 defeated Tory candidates failed to win the 15 per cent of votes they need to receive federal campaign subsidies— saddling each of them with about $30,000 in personal debt. The party itself is an estimated $6 million in the red—despite the public protestations last week of party president and Senator Gerry St. Germain that its debt is no more than $3 million. Campbell, who failed to qualify for a pension but will receive a lump sum of $63,802 in severance pay, is expected to cling to her leadership post until January—in large part because the party simply cannot afford a leadership review.

Seemingly oblivious to the irony, several Tory senators are already plotting to stage a comeback using the Tory-dominated Senate as both a base and a money pot. By using their $40,000 budgets for office expenses, some of the Tories’ 58 senators plan to hire extra staff who would then also work as researchers for the party. As well, Toiy senators will be called upon to organize, raise funds and develop policy. “Because we do have research funds we can use the Senate as a base for rebuilding the party,” said Tory Senate Leader Lowell Murray. “I think we can be very useful in a supportive role. We’re talking about a long haul. There’s nothing improper about it.” Improper or not, the scheme had the ring of desperation for a ruling party humbled as never before in Canadian history.

E. KAYE FULTON

ANTHONY WILSON-SMITH

LUKE FISHER

MARY JANIGAN