CANADA

Setting the economic agenda

Michael Clugston November 26 1984
CANADA

Setting the economic agenda

Michael Clugston November 26 1984

Setting the economic agenda

CANADA

Michael Clugston

Prime Minister Brian Mulroney called it a good start. Premier James Lee of Prince Edward Island spoke glowingly of a determination to “mobilize the full efforts of our government to achieve economic renewal.” Outwardly, last week’s meeting between Mulroney and Canada’s 10 provincial premiers was marked by a sense of common purpose that contrasted sharply with the federal-provincial quarrelling of the past. But that was largely because the first ministers postponed serious talks until they meet again in Regina on Feb. 14 and 15. Then, the real bargaining over the Mulroney government’s declared intention of cutting back on funding for shared-cost social programs in the name of spending restraint will begin. Even so, the four-hour get-together near Ottawa reflected a marked change in style. In the past, said a western official, former prime minister Pierre Trudeau “did a lot of talking, took a lot of initiatives. This time Mulroney spent a lot of time listening and taking notes.”

Even before the conference convened to set an agenda for the February economic discussions, the Prime Minister used all of his charm and political talent to smooth the way. He talked with several of the premiers in advance and arranged to have copies of Finance Minister Michael Wilson’s Nov. 8 financial statement hand-delivered to each of them just as Wilson rose to speak in the Commons. At the government’s rustic Meech Lake conference centre in the Gatineau Hills outside Ottawa, Mulroney, reported an aide to one of the premiers, “totally disarmed” the visitors with a conciliatory approach to the task ahead. During the ensuing discussions the 11 first ministers sketched out an agenda for the Regina summit and then emerged proclaiming a new era in federal-provincial relations. Declared an apparently ingenuous Peter Lougheed of Alberta, veteran of 13 years of first ministerial meetings: “You didn’t have to be a Conservative in there to feel how good the mood was.” Most of those present are Conservatives. The exceptions: Quebec’s René Lévesque, of the Parti Québécois, and Manitoba’s New Democrat Howard Pawley, along with William Bennett, the small-c conservative Social Credit premier of British Columbia.

Still, the initially amiable state of the

new federal-provincial relationship is likely to encounter more strain when bargaining gets under way next year. Under existing arrangements, Ottawa passes along about $12 billion from its tax revenues to the provinces each year to support health care services and postsecondary education. It redistrib-

utes another $6 billion through the Fiscal Equalization Program to enable the six poorer provinces (the four Atlantic provinces, Quebec and Manitoba) to provide government services comparable to those of the richer provinces. Since taking office Mulroney has declared that

those payments will be reviewed and possibly reduced—a step that would seriously affect the have-not provinces.

According to Newfoundland Premier Brian Peckford, whose Conservative government will receive $907 million in federal cash transfers in the 1984-1985 fiscal year, the subject did not even come up in last week’s talks. Noted Peckford: “There is going to be a major national dialogue that will involve the provinces. I’m not going to take any particular position on it until such time as we have all the data.” But Manitoba’s Pawley was blunt. “Any further cutback in transfer payments,” he said, “will only widen the gap between the richer and the poorer provinces.”

As the premiers talked, Wilson’s plans to reduce projected expenditures in the next fiscal year by $3.5 billion came under heavy attack in the Commons. The opposition Liberals and New Democrats charged that the spending reductions may eliminate as many as 100,000 jobs across the country. New Democrat Ian Deans (Hamilton Mountain), for one, angrily referred to reports that the federal justice department had fired about 500 lawyers appointed under the previous Liberal governments, replacing them with Tories. Deans demanded to know why “ordinary Canadians, who will lose their j obs as a result of the government’s measures, must wait ... to regain employment in the private sector, while the government moves to provide jobs for its 500 PC lawyer friends?”

In their efforts to discount the negative impact of Wilson’s plans, the Tories were caught in a series of awkward reversals. Treasury Board President Robert de Cotret assured the Commons that no jobs would be lost when $71 million was cut from the National Research Council’s 1985 budget next year. Then, only a few minutes later, Science Minister Thomas Siddon admitted that as many as 150 people could lose their jobs as a result of National Research Council spending reductions.

For his part, External Affairs Minister Joe Clark, who less than two months earlier had told the United Nations that foreign aid would reach .07 per cent of Canada’s gross national product by 1990, had to switch to 1995 as a target date when Wilson’s measures reduced Canada’s 1985 foreign aid budget by $180 million. Clark explained that the delay resulted from “the severe econom-

ic situation which the government has inherited” from the Liberals. But critics noted that the government has been aware of the size of the federal deficit —projected to reach $34.6 billion this year—since August, making it difficult to blame last-minute policy changes on the Liberal legacy.

On other policy fronts, the Mulroney government’s week was marked by a series of actions and incidents that contributed to an image of an administration that is at times unsure of its direction—and obsessed with secrecy. Last week an unidentified source revealed to the press that Clark had issued a gag order to his staff. The memorandum warned them to avoid talking to reporters, even at cocktail parties, without permission. The document was apparently circulated among external affairs ministry staff after rumors about Canadian Embassy closures abroad spread alarm in the department and among some foreign governments. Clark, who had proclaimed an opengovernment policy when he was Prime Minister in 1979, refused to release the memo. But he confirmed that he had clamped down on contacts with reporters as a result of the “rather casual practice that has grown up” between journalists and civil

servants in this country.

Meanwhile, in an apparent policy shift, Revenue Minister Perrin Beatty’s office announced that Ottawa would spend $10 million on a campaign to collect some of the $3.5 billion owed to the Treasury by delinquent taxpayers. Last winter, while in opposition, Beatty headed a Conservative party task force that investigated and attacked Revenue Canada’s hard-nosed methods of collecting from delinquent tax payers. Noted NDP finance critic Nelson Riis: “It sounds as though Mr.Beatty is doing exactly what he criticized the Liberals for doing—imposing the heavy hand on those finding it impossible to pay.”

At the same time, Consumer and Corporate Affairs Minister Michel Côté was caught off guard when his parliamentary secretary, Peterborough MP William Domm, told reporters that the government was backing away from the program to convert the country to metric measurements. The government would no longer prosecute retailers who ran afoul of metric rules, said Domm. For his part, Côté insisted that the cabinet had yet to decide its metric policy. He said Domm had only been expressing “his personal opinions.” Meanwhile, the oppo-

sition Liberals were enmeshed in an embarrassing squabble featuring party Leader John Turner and the man he replaced last July, Pierre Trudeau. Turner, discussing the party’s situation before the Sept. 4 election, which he had called while briefly Prime Minister, said in an interview with Maclean ’s (Nov. 19) that he had inherited a party that had been run from Trudeau’s office, “without policy, without preparation, without money and without recruitment.” Trudeau lashed back on CTV’S Canada A.M. by declaring that “I think I could have won that election, if you want to know the truth.” Added Trudeau: “If anybody wants an argument with me, if they want to provoke me back into politics, this would be the way to do it.”

But in another political arena where friendliness has been a rarity—between Quebec and Ottawa—the trend was toward suppressing discord. Following the first ministers session, Quebec’s Lévesque said he would meet separately with Mulroney next month to discuss conditions for his province belatedly joining the rest in signing Canada’s twoyear-old Constitution. “The only commitment we made,” said Lévesque, “is that we would get together. Inevitably, the Constitution will be discussed.” And as an indication of his sincerity, Lévesque announced in Quebec City later in the week that he would consider allowing the Canadian flag to hang alongside Quebec’s fleur-de-lys in the national assembly once again, after banishing it from the legislature for the past eight years.