BUSINESS WATCH

A Liberal contender with ideas

Peter C. Newman April 2 1984
BUSINESS WATCH

A Liberal contender with ideas

Peter C. Newman April 2 1984

A Liberal contender with ideas

BUSINESS WATCH

Peter C. Newman

There is a tendency to dismiss Don Johnston, the Westmount Liberal who stepped into his party’s leadership contest earlier this month, as an amiable lightweight. Faced by the formidable challenge of a recycled John Turner and a reborn Jean Chrétien, he has little chance of winning. Yet he is one of the few Trudeau cabinet ministers certain to retain his influence in the Liberal party of the future. Unlike most of his colleagues, Johnston has a pretty good idea of the limitations that will govern his party and country for the next decade.

Johnston, who arrived in Ottawa via a byelection six years ago, is hampered by his reputation as an unreconstructed right winger. His attempts to alter that image are reminiscent of an earlier Liberal leadership candidate with the same problem: the late Robert Winters, who came within 50 votes of defeating Pierre Trudeau in 1968. Whenever he was asked where he stood on the left-right political spectrum, Winters would smile and reply, “Tell me where the centre is, and I’ll tell you where I stand.”

“Too many commentators,” Johnston told me during a recent interview, “have drawn an artificial alliance between hands-on government and those politicians who believe in social issues. That is a false alliance. Just because I’m against massive hands-on government activity does not mean I’m against medicare. I find it very aggravating, but it’s a fight I’ve had ever since I got involved in politics.”

True to his word, Johnston has fought hard inside cabinet, not against more social security but against waste duplication. He has spoken strongly in support of more stringent cost controls and the reallocation of funds to changing needs. His confidential 35-page memorandum criticizing his colleagues (Maclean’s, Oct. 10, 1983) took giant swipes at the lack of funding for such productive activities as geological mapping by the energy department, soil and water research by agriculture, and at overregulation of high-tech industries by the communications department. Obsessed by new technologies and the changes in the world demand patterns that are limiting the growth of traditional Canadian manufacturing, he believes our smokestack industries will follow the historic decline of agriculture. (Immediately after the Second World War 25.4 per cent of Canada’s

labor force were farmers; by 1981 that proportion had fallen to 4.4 per cent— yet agricultural output grew by an average of 1.8 per cent a year in the interval.)

Johnston sees growth in small business and service industries as the only way the Canadian economy can be saved: “Even in John Kenneth Galbraith’s analysis, this is the real market sector, and only market forces can throw up winners. This points to back-

ing winners with framework policies, rather than picking winners through selective intervention. Entrepreneurs will be the catalysts of economic growth in the future of Canada. Nothing stimulates capital investment as much as a supportive fiscal regime that features a tax system which is stable, predictable and fairly administered.”

Johnston wants to limit the public sector’s initiatives to “maintaining a favorable economic climate in which all

kinds of businesses can thrive. The more stable and predictable Ottawa can make the rewards and penalties for economic decisions, the better and the more oriented toward the long term they will be.”

Despite Johnston’s spirited defence of the recent Canadair bailout, he opposes the growth of Crown corporations. “Government,” he points out, “can buy only management, as does the private sector, and it can supply no special insights of its own. Government and business must compete with the same pitfalls and uncertainties as any private corporation. A record of the federal Crown corporations hardly gives us room for optimism that they will light the way to our economic salvation.”

These are not unimportant thoughts, but Johnston has a way of reducing their impact by talking too fast and advancing his ideas with all of the charisma of Doug McKenzie reading a laundry list. Curiously, the one time he expresses anything resembling passion is when he reminisces about a trip he took last summer to the Soviet Union. “The world,” he says, “literally teeters on the brink of nuclear annihilation. A knee-jerk response of the kind that might satisfy those who wish to humiliate the Soviet Union could be just enough to push us all over that brink into a nuclear holocaust. Surely it is apparent after 66 years that Sovietstyle Communism does not pose an ideological threat to us.”

These strong feelings aside, Johnston is basing his own leadership run on economic issues. As former head of the treasury board and as minister of state for economic development and for science and technology, he understands our structural weaknesses. Both as a private tax consultant and as a Trudeau minister, Johnston has demonstrated tremendous frustration with freespending bureaucrats. But unlike most of his colleagues, he has some specific ideas of what to do about it.

“New technology,” he says, “is a tidal wave. We must either ride with it or drown. Traditional approaches just won’t do. We simply have to break out of yesterday’s mind-set.”

According to all the conventional wisdom, Johnston should not stand a chance in the race for the Liberal leadership. But in politics, as Pierre Trudeau so aptly demonstrated, the rules are only a summary of what has happened in the past. They are there to be broken.