CANADA

A trusted budget team

Michael Rose May 27 1985
CANADA

A trusted budget team

Michael Rose May 27 1985

A trusted budget team

CANADA

SPECIAL REPORT

Michael Rose

As Prime Minister Brian Mulroney’s Canadian Armed Forces 707 returned to Ottawa from the economic summit meeting in Bonn, West Germany, earlier this month, reporters dozed in their seats, convinced that anything newsworthy had been duly noted. But in the forward section of the plane, prime ministerial aides scurried in and out of the first-class cabin as Mulroney, Finance Minister Michael Wilson and key advisers pored over a draft of the federal budget. The document had been rushed to Germany the day before so that the budget team would lose no time in polishing a statement that could prove critical to the Tory government’s first term. But the airborne bustle was interrupted at one point by a portentous announcement from the pilot—stand by for rough weather ahead.

In an attempt to evade political and economic turbulence, the Mulroney government invested an unusual effort in preparing its first full budget—including consultations with outside business advisers. Indeed, opposition critics complained that Wilson had taken an unacceptably long time —almost nine months since the Sept. 4 Conservative election victory—to prepare an antidote to slackness in the national economy.

Wilson’s problem was compounded by Mulroney’s reluctance to risk unpopularity—and by the Prime Minister’s unusually strong presence in the budgetmaking process. Mulroney, according to senior Tory insiders, played an active personal role in every facet of preparing

the budget. For his part, Wilson and a trusted team of senior advisers worked on the budget amid persistent rumors— dismissed by a senior staffer in the Prime Minister’s Office as “utter bull”—of a fundamental disagreement between Wilson and Mulroney over how far the government should extend the austerity program proposed in the finance minister’s preliminary financial statement last Nov. 8. Wilson, 47, a former Toronto securities broker who is dedicated to putting Ottawa’s financial books in order, appeared to lose a crucial battle in cabinet before Christmas in his bid for dramatic restraint on spending for universal social programs. A senior Tory maintained the budget in its finished form “is very much a Mulroney and Wilson document.”

Other key players on Mulroney’s budget team wielded significant influence. Among the major contributors: Charles McMillan, 89, the Prime Minister’s senior policy adviser, is a former professor of business administration at Toronto’s York University. McMillan strongly advocates spending cuts and played an important role by revising portions of the draft and acting as an informal conduit for ideas from interest groups and consultants.

Bernard Roy, 45, Mulroney’s principal secretary, chief of staff and a close friend of the Prime Minister, is a lawyer by

With Terry Hargreaves in Ottawa.

profession. Roy told Maclean ’s that one of his roles was to ensure that the Conservative election program is translated into policy. Roy also helped assess the political ramifications of the budget.

Mickey Cohen, 50, the deputy minister of finance, is one of Ottawa’s shrewdest and most powerful bureaucrats. Despite Cohen’s strong ties to the previous Liberal government, Mulroney kept him to ensure continuity in a crucial ministry. A supporter of private sector initiatives in the economy, Cohen played a pivotal role in preparing the budget by acting as liaison with the PMO and helping assess the budget’s impact.

Fred Gorbet, 40, senior assistant deputy minister of finance for fiscal and social policy, was steeped in Keynesian economics while getting a doctorate at Duke University in Durham, N.C. An expert draftsman of position papers, Gorbet prepared the first technical draft of the budget.

Gerry Shannon, 49, senior assistant deputy minister for trade, tax, economic development and administration, is a 22-year veteran of the civil service with special expertise on Canada’s role in the world economy who served as economics chief at the Canadian Embassy in Washington. Shannon, according to insiders, played a leading role in preparing the government’s November economic statement and concentrated on ensuring that the budget was faithful to that document.

Other key players included David Dodge, a senior finance department official who is said by acquaintances to know “how the numbers affect the real world,” William Mackness, chief economist of the Bank of Nova Scotia and another fervent advocate of deficit reduction who was seconded to the finance minister’s office for a year, and Peter Burn, a specialist in tax policy who is on loan to Wilson from the Prime Minister’s Office.

Clearly, the Mulroney government’s pre-budget efforts were aimed not only at setting the economy on a new road to health but at forestalling the kind of post-budget turmoil that defeated Joe Clark’s Tory government in 1979 and forced then-Liberal finance minister Allan MacEachen to rewrite parts of his 1981 budget. But as Sam Hughes, former head of the Canadian Chamber of Commerce and now a private consultant in Ottawa, observed last week: “If nobody is angry about this budget, it won’t have been a success.”