CANADA/COVER

Mulroney takes command

Robert Miller October 1 1984
CANADA/COVER

Mulroney takes command

Robert Miller October 1 1984

Mulroney takes command

CANADA/COVER

Robert Miller

Jujubes are his passion and balance sheets his calling, and in both cases Canada’s new finance minister prefers the color black. Michael Wilson, the 46-year-old former Toronto investment dealer who will lead the Mulroney government’s assault on Canada’s economic problems, is an inveterate chewer of the gummy candies as well as a politician determined to halt the nation’s steady slide into debt. This week, as Prime Minister Brian Mulroney prepared to fly to Washington for talks with President Ronald Reagan, members of the new Conservative government were buckling down to the business of running the country. None of the 40-member cabinet, sworn in last Monday by Gov. Gen. Jeanne Sauvé, had a more daunting assignment than Wilson, who completed a snap audit of the nation’s books and declared, “The picture is definitely worse than I had anticipated.”

Landslide: But the cause of his heightened concern—Wilson variously described the federal government’s financial situation as a “mess” and a “predicament”—was less than clear. He declined to offer details, claiming he wanted “to be able to give Canadians something more than just the bad news.” And he injected a partisan note, saying the former Liberal government had deliberately withheld gloomy financial facts during the summer election campaign.

But aside from a proportionately small increase in the 1983 federal deficit—a Sept. 10 statement from the finance department showed the shortfall was $32.4 billion, $900 million more than forecast in former finance minister Marc Lalonde’s February budget—most of the recent economic news has been relatively encouraging. In August the annual inflation rate of 3.7 per cent was the lowest in more than a decade. Interest charges continue lower than most analysts had forecast. Even the dollar’s long descent has slowed, if not stopped (it closed Friday at U.S. 76 cents).

Still, unemployment continues unacceptably high at 11.2 per cent of the work force, and, during the campaign that led to their landslide victory, the Tories promised to reduce the deficit. And Wilson—tall, athletic, soft-spoken and hard-working—has accepted the responsibility, as finance minister, for re-

storing economie faith in a Canada Mulroney describes as “a country of small towns and big dreams.”

Wilson’s appointment last week was to one of the most difficult jobs in Canadian public life. And he wasted no time in tackling the job. Even before he was sworn in, Wilson read briefing papers prepared by department officials. On Wednesday he attended a meeting of Commonwealth finance ministers in Toronto, where he made clear that Canada, like the United States and Great Britain, in particular, favors the case-bycase approach to the Third World debt crisis.

On Thursday he was back in Ottawa to make a presentation on the government’s spending and revenue position to the priorities and planning committee of the broadly representative cabinet that Mulroney assembled from his 211member caucus. Thursday night Wilson flew to Washington for the combined annual meeting of the World Bank and the International Monetary Fund.

Chill: In Ottawa, Wilson was expected to begin almost immediately a lengthy series of consultations with his cabinet colleagues, various provincial officials, members of the business community and labor respresentatives. The goal: preparation of a financial statement by Christmas, which will serve as a prelude to a full budget early in 1985. As Wilson proudly told Maclean's, the statement will detail ‘‘a clear sense of the direction that we want to go.”

While Wilson went to work on the economy and the other new ministers began hiring staff and consulting with their department officials, Mulroney prepared for his White House session with Reagan. Mulroney and the president were expected to discuss the continuing East-West diplomatic chill. But their meeting—arranged at Reagan’s instigation—seemed at least partly motivated by the desire to signal an improvement in U.S.-Canadian relations. Both Mulroney and Reagan have said publicly that they are anxious to work together, and there is no shortage of work for them to do, particularly in the economic sector (page 62).

For his part, Pierre Trudeau, 64, last week ended months of speculation about his plans for private life by accepting an appointment at an undisclosed salary as counsel to the fast-growing Montreal law firm of Heenan, Blaikie, Jolin, Potvin, Trépanier, Cobbett. The former prime minister, who taught law at the University of Montreal before entering federal politics in 1965, will maintain an office at the firm but told reporters he doubted he would argue any cases in court. Said Trudeau, grinning: “I had a good setup in Ottawa and I was looking for a good one here.”

It was also a busy week for other

former prime ministers. Liberal Leader John Turner remained in Ottawa long enough to criticize Mulroney’s first attempt at cabinet-making, then left for a vacation in the sun (page 18). And Joe Clark, Mulroney’s choice as external affairs minister, worked steadily on a speech he was to deliver to the United Nations General Assembly as scheduled on Tuesday, despite the fact that the timing clashed with Mulroney’s visit to Washington. External affairs officials tried unsuccessfully to reschedule his UN address so it would receive maxi-

mum media coverage but gave up when they could not persuade the representative of any other nation to make the switch.

Ritual opposition criticism aside, Mulroney last week enjoyed generally favorable reviews of his cabinet-making. The Canadian business community was virtually unanimous in endorsing the selection of Wilson for the all-important finance job. And most commentators praised the new government as a skilful blend of talent and political philosophy drawn from every region of the country.

Secrecy: But at the same time, the new Prime Minister left no doubt that he was in total control. Senior aides in the Prime Minister’s Office disregarded requests for a full-scale Mulroney

press conference and they cautioned new ministers not to talk to reporters until they had a grip on their portfolios. And, before the swearing-in, Mulroney warned prospective ministers that any breach of secrecy would earn his immediate wrath.

Liberalizing: Aside from Mulroney, one of the new powers in Ottawa clearly will be Deputy Prime Minister Erik Nielsen of the Yukon, a hard-nosed 26year veteran of the Commons and the man Mulroney has nominated to swing the axe wherever he finds waste or fat in

the federal system. Nielsen will head a ministerial task force—Wilson, Justice Minister John Crosbie and Treasury Board President Robert René de Cotret will be the other members—assigned to evaluate every aspect of the federal bureaucracy and government programs.

The other important player to emerge was another Mulroney backer and man of the right, Sinclair Stevens. In addition to being responsible for regional development, he will play a key role in liberalizing foreign investment regulations and promoting trade.

Among Mulroney loyalists rewarded in the new cabinet: 74-year-old George Hees, a former ^ member of the John DiefI enbaker government, in veterans affairs; veteran Nova Scotia MP Elmer

COVER

MacKay, the new solicitor general; Robert Coates, a party right-winger, who will serve as defence minister; former figure-skating champion Otto Jelinek, in fitness and amateur sport; and Jack Murta from Manitoba’s Lisgar riding, in multiculturalism. Former health minister David Crombie was appointed minister of Indian affairs and northern devel-

opment. The province of Quebec, a breached Liberal stronghold which returned 58 Tory MPs, received 11 cabinet appointments, including Marcel Masse, who was given the communications portfolio, and de Cotret. However, with only three seats, including Mulroney, in the all-powerful inner cabinet—the priorities and planning committee—Quebec ranks behind the West (seven members) and Ontario (three) in the body that will really make the big decisions. Crosbie and Robert Coates are the Atlantic members. The West’s 13 ministers include such senior appointments as Clark, Don Mazankowski in transport, Clark loyalist Jake Epp in health and welfare, and Vancouver’s Pat Carney in energy, mines and resources.

Carney was one of six women selected for the cabinet—the most in Canadian

history. Women’s issues were prominent during the campaign, and Mulroney clearly sought to reassure women voters that he had been paying attention. The most senior female member of the cabinet—former external affairs minister Flora MacDonald—received the important post of minister responsible for employment and immigration.

While Mulroney satisfied Clark’s wishes, he evidently disappointed for-

mer finance minister Crosbie with the justice portfolio. Asked about the state of the economy after a cabinet meeting last week, Crosbie curtly told reporters, “I’m just the justice minister.”

Even Clark’s position was firmly under Mulroney’s control. By abolishing the cabinet’s foreign policy and defence committee, as part of a streamlining process, and bringing those areas under the purview of the priorities and planning committee, which Mulroney himself chains, the external affairs job may be diminished. Still, when Mulroney and his wife, Mila, arrived at the ballroom of Rideau Hall for the investiture, he paused to shake hands with only one of his ministers—Clark. And later that evening, during a champagne-splashed gala at Ottawa’s National Arts Centre, hosted by the Progressive Conservative

party and attended by such non-MPs as Edmonton entrepreneur Peter Pocklington and Montreal distilling magnate Charles Bronfman, Mulroney singled out the past efforts of Clark and former leader Robert Stanfield as having been crucial to the Tories’ Sept. 4 victory. While Mulroney spoke, Clark’s wife, Maureen, pointedly studied her fingernails.

Mulroney also rewarded a number of

talented newcomers to federal politics, including:

André Bissonnette, 39, minister of state for small business. Bissonnette is a successful businessman who specializes in processing and distributing chickens to hotel and food chains. He has studied business administration and management and has served on Canadian trade missions to Nigeria and with a foreign aid project in Egypt on poultry processing sponsored by the Canadian International Development Agency. In his StJean riding south of Montreal, the bright and aggressive Bissonnette, who has not yet decided what to do about his business, is known as le roi du poulet— “the chicken king.” He said that under parliamentary rules he has 120 days to make up his mind.

Suzanne Blais-Grenier, 49, environ-

ment minister. An impressive administrator, the veteran bureaucrat holds a doctorate in economics from the University of Paris and separate master’s degrees in sociology and social work. Until she won her Montreal riding, she was a senior civil servant in Quebec City who headed the provincial commission on health and safety in the workplace. The sophisticated and bilingual Blais-Grenier has also served as director of the Canadian Human Rights Commission and as a social services director for health and welfare. Her expertise in both economics and the social sciences should be an asset in the difficult environment portfolio.

Andrée Champagne,

45, minister of state for youth. A versatile and popular Quebec actress,

Champagne was showered with gifts and fan mail when she played her most famous role as the submissive and downtrodden Donalda in a Radio-Canada hit TV series about pioneer life. Anglophone audiences saw her as a singer on the Tommy Ambrose Show and Juliette. The fluently bilingual Champagne has appeared on radio, television, on stage and in films for 28 years—and she emerged as a strong and articulate spokesman for Quebec artists. Intelligent and vibrant, she is likely to be a star in the junior ministry she now holds.

Michel Côté, 42, minister of consumer and corporate affairs. Intelligent and impressive,

Côté is a chartered accountant who rose to become a senior partner at the Quebec City firm of Thorne, Riddell, Poissant Richard. A longtime Conservative, he was an early supporter of Mulroney and a diligent party fund raiser during the lean years in the mid-1970s. He is a wine expert, a former vice-president of the Quebec Remparts Hockey Club and a director of the Quebec Winter Carnival. Key Tory advisers predict that if the astute Côté does well in consumer affairs, he will be rapidly promoted to a senior cabinet post.

James Kelleher, 53, minister of state for international trade. A lawyer from Sault Ste. Marie, Ont., Kelleher is a veteran organizer for the Ontario Conservative party. He is also a personal friend of Mulroney’s and advised the

Tory leader on the steel industry as well as threatened U.S. import restrictions in advance of Mulroney’s first meeting with President Reagan last June. A steady but quiet worker, Kelleher is involved in a wide assortment of local associations and charities. In his new portfolio he is expected to keep a paternal eye on the hard-pressed Sault Ste. Marie steel industry.

Barbara McDougall, 46, minister of state for finance. A veteran backroom political worker, the vibrant and determined McDougall won the tough three-way ^ fight for the nomination I in her Toronto riding and then trounced Employment and Immigration Minister John Roberts in the election. McDougall is a former vice-president of Dominion Securities Ltd., now Dominion Securities Ames Ltd., one of Canada’s top brokerage houses, and a former executive director of the Canadian Council of Financial Analysts. She will have special responsibility for financial institutions under the direction of Wilson.

Monique Vézina, 49, minister of state for external relations. A unilingual francophone from Rimouski, she has strong social democratic roots. She backed, but did not actively work for, the Parti Québécois’ “Yes” side during the Quebec referendum in 1980. The daughter of a machinist who worked at a pulp and paper factory, Vézina is a grandmother and a feminist, and she was president of the Fédération des Caisses Populaires Desjardins du Quebec, a credit union federation with 83 branches in her part of Quebec. The outspoken and popular Vézina began taking English lessons shortly after winning her seat.

After the swearing-in the cabinet authorized Jelinek to scrap the Liberals’ money-losing Canadian Sports Pool Corp., a lottery-like gambling game that was costing taxpayers more than $1 million a week. The new government also approved the dismantling of the onceprominent Canadian Unity Information Office, which was opened during the Trudeau government’s drive to combat Quebec separatism.

The Prime Minister also named Nova Scotian Fred Doucet, 45, who acted as Mulroney’s chief of staff before the elec-

tion, as senior adviser. Members of the cabinet were authorized to impose more political control on the civil service. They will hire “chiefs of staff” of their own—a new breed of powerful senior advisers who will advise their bosses on the political implications of major areas of departmental activity.

As the new ministers settle into office, none will face quite so daunting a challenge as Wilson. His performance in office ultimately may have as much to do with the Tories’ political fortunes as it will with the prosperity of ordinary Canadians. Wilson conceded that the task facing him was a formidable one and declared that he was “under no illusions” about the finance minister’s job. “We cannot go on tinkering,” he told Maclean’s Ottawa correspondent Terry Hargreaves in an interview. “The previous government dealt primarily with the symptoms of the problem. We feel very strongly that we have to identify the causes.”

Right-Wing: Wilson said that if the new government can reduce the deficit, restore the confidence of the private sector and eliminate duplication of services between the federal and provincial levels of government, then economic recovery and a surge in job creation must follow. Declared Wilson: “The private sector can move pretty quickly. It moves a lot faster than government.”

Wealthy, stolidly intelligent and discreetly right-wing, Wilson was born and raised in Toronto, where his father was director of National Trust Co. Ltd., one of Canada’s major financial insitutions. After serving a stint as an official in the federal finance department during the mid-1960s, Wilson returned to Bay Street and eventually became a vicepresident of Dominion Securities Ltd. In 1964, Wilson married the former Margaret Smellie of Brockville, Ont., and the couple has three teenage children. Despite his less than charismatic style and leaden speaking style, Wilson decided to take the plunge into politics and in 1979 won the Toronto Etobicoke Centre riding for the Tories and a place in Clark’s cabinet as minister of state for international trade.

One of the basic elements in Wilson’s economic philosophy is his belief in the importance of private-sector risk takers in Canadian communities. As he once observed: “For 100 years Canada lived on its resources. For the past 10 years it has lived on credit. Now it must live on its wits and its intelligence.” And now it is up to Michael Wilson—as the minister most on the spot in Brian Mulroney’s new government—to help make that happen.

Terry Hargreaves

Mary Janigan

Karen Nicholson

Anthony Wilson-Smith