A rude opening for Mulroney

ROY MACGREGOR September 23 1985

A rude opening for Mulroney

ROY MACGREGOR September 23 1985

A rude opening for Mulroney


The 32-page booklet symbolized the government’s eagerness to show that the ship of state is under control and properly on course. Distributed to reporters in Ottawa by Conservative national headquarters last week, the document listed 85 achievements of the Tory government’s first year in office—complete with 34 photographs of Prime Minister Brian Mulroney. Mulroney was clearly anxious to launch his second year with an impressive demonstration of accomplishment, but his plans immediately went awry. Two unforeseen developments —one a failed bank, the other a series of embarrassing revelations about the business dealings of a close Mulroney friend —spoiled what Mulroney and his planners had intended to be a decisive beginning to the fall sitting of the 33rd Parliament.

After a summer of taking stock, Mulroney’s advisers had put together a series of broad policy announcements designed to set the agenda for the fall sitting. The measures that the government unveiled in the House of Commons last week included a new set of conflictof-interest guidelines, tougher restrictions on Canadian firms that do business with South Africa and a comprehensive plan to assert Canada’s sovereignty over the Arctic in the wake of last month’s voyage of the United States Coast Guard icebreaker Polar Sea through the Northwest Passage. Declared government House Leader Ray Hnatyshyn: “I think the government has demonstrated that we are responding to the issues that have developed over the past few months and we are looking forward with an agenda of our own. It is not a question of perception. The government is decisive. It is acting.”

But from the moment the parliamentarians took their seats in the House of Commons after a 10-week summer break, it was the opposition that con-

trolled the debate. Liberal Leader John Turner opened the first day’s Question Period with a stinging attack on “the bumbling incompetence of the government” in its handling of the Sept. 1

collapse of the nine-year-old Canadian Commercial Bank of Edmonton and the potential failure of another Albertabased financial institution, the Northland Bank (page 30). Turner also accused Mulroney, Finance Minister Michael Wilson and Bank of Canada Gov. Gerald Bouey of misleading the House about the perilous condition of the CCB last March, when the government orchestrated a $255-million bailout of the bank. In response, both Mulroney and Wilson challenged Turner to prove his charges or resign.

A day later the Liberals opened a new line of attack, citing reported attempts by Toronto lawyer and Mulroney confidant Sam Wakim to secure a highly paid position with a major Toron-

to law firm. According to Liberal justice critic Robert Kaplan, Wakim or a representative approached at least three prominent legal firms last fall and told them that, if they would take him on

staff, he would ensure that the firm received legal work for the Export Development Corp. (EDC), a government agency which spends about $1 million annually on lawyers’ fees in connection with the financing of Canadian exports.

Last spring Wakim joined the firm of Weir & Foulds, which received an EDC contract in July after International Trade Minister James Kelleher directed the agency to consider hiring new law firms for EDC work. Since then Wakim’s firm has received about $200,000 worth of EDC business, about the same amount of work that Gowling & Henderson lost. Turner called for the issue to go

before Parliament’s com^ mittee on MPs’ privileges j in an effort to “find out g what Sam Wakim did to peddle his wares to a

number of law firms in Toronto.”

Mulroney hurried to the defence of Wakim, a former roommate when the two men attended St. Francis Xavier University in Antigonish, N.S., in the late 1950s. Both the Prime Minister and Kelleher insisted that they had nothing to do with the awarding of the work to Weir & Foulds, although Kelleher conceded that he had previously talked to Wakim about the possibility of doing legal work for the agency. At the same time, Maclean's has learned that during the mid-1970s the Liberal government also considered reducing the amount of legal work given to Gowling & Henderson in order to distribute some of it to other firms with Liberal connections. But according to a former Liberal cabinet aide, the government concluded that the EDC business was too important and complex to be given to firms with less expertise.

For his part, Mulroney appeared annoyed by the unexpected turn of events. Beginning on the previous weekend, when the Prime Minister delivered a polite “no” to President Ronald Reagan’s invitation to the Canadian government to participate in Washington’s Strategic Defense Initiative in space, the Tories had been eager to project an image of strong leadership. In part, Mulroney hoped to counteract opposition criticism that his government lacked direction and was afraid to make tough but unpopular decisions. Admitted one senior adviser: “When the people around the cabinet table got a sense of this so-called ‘drifting,’ they really grouped together.” One by one throughout the week the government addressed the most controversial areas of concern:

• Patronage: By tabling tougher conflict-of-interest guidelines, Mulroney hoped to remove the nepotism tag that has hung over the Tories since last fall, particularly in the wake of revelations that two firms that employ sons of Justice Minister John Crosbie received government legal work. Turner later accused the Tories of trying to appear “sanctimonious” while diverting attention from the collapse of the Canadian Commercial Bank. But in fact the guidelines, which prohibit cabinet ministers or the departments or agencies for which they are responsible from hiring members of their immediate family, are the toughest any Canadian Parliament has considered.

• Arctic sovereignty: In his most forceful performance yet as minister of external affairs, Joe Clark unveiled a detailed plan in the Commons to defend Canada’s claim to the arctic waters, a claim that Washington has never accepted. Clark’s announcement of a series of legal and navigational measures—including plans to build a huge, $500-million icebreaker, the Polar 8, designed for

arctic conditions—even won the approval of Edmonton publisher and nationalist Mel Hurtig, the most vocal critic of Ottawa’s failure to protest against the Polar Sea voyage.

• South Africa: With Clark again taking the lead, the government announced new sanctions against the white-ruled country which included a call to Canadian banks to deny loans to the South African government except those that would benefit blacks. Clark also named Albert Hart, former Canadian high

commissioner to Ghana, to monitor the labor practices of Canadian firms in South Africa and allocated $1 million to help the families of political prisoners. Clark won enthusiastic applause from all parties in the Commons by saying that Canada is prepared to sever all diplomatic and economic ties with the racist regime if it does not dismantle the system of apartheid.

• The Prime Minister’s Office: To answer criticism about the government’s seeming lack of policy direction, Mulroney restructured the PMO and promoted communications director Ian Anderson, 33—a former Maclean's reporter in Ottawa—as deputy to Principal Secretary Bernard Roy. Insiders said that the

shakeup was intended to strengthen policymaking. As well, Mulroney has decided to rely more on the Privy Council Office, part of the permanent civil service, for policy development. His virtual dismissal of PCO expertise during much of the first year was the subject of increasing concern among senior Tories.

Still, the opposition was plainly unimpressed by the government’s display of action. Liberal House Leader Herb Gray argued that the flurry of announcements by the Tories did not address “matters of utmost national importance.”

Mulroney’s attempt to halt his government’s drift was also evident in his more formal dealings with the media. Last week press secretary Bill Fox told the parliamentary press gallery that there will be fewer spontaneous “scrums” with reporters as Mulroney enters and leaves meetings. Instead, the Prime Minister plans to hold two formal news conferences each month—a system reminiscent of the style that former prime minister Pierre Trudeau resorted to when advisers decided that his offthe-cuff remarks to reporters were creating problems.

Mulroney’s wariness of the media was in sharp contrast to the more accessible approach that Turner adopted. At one point last week the Liberal leader invited reporters to “drop in for beer and pizza” while he criticized the government over the failure of the CCB. Turner has not only altered his style— among other things, he has apparently been taking speech lessons over the summer to correct his habitual throatclearing and his machine-gun delivery —but he has reorganized his office staff. One change involves the addition of prominent Quebec journalist Michèle Tremblay to advise him on Quebec affairs. Meanwhile, the “Rat Pack” of aggressive Liberal MPs—Sheila Copps, Don Boudria, Brian Tobin and John Nunziata—agreed to adopt a lower profile so that Turner can have more opportunity to lead the fight in the Commons.

Last week’s setbacks left Mulroney and his party more determined than ever to demonstrate that the government is back on track. But some critics already wonder whether the Prime Minister will now move decisively on the next major challenge facing his government: whether or not to begin free trade negotiations with the United States. Like the Tories’ controversial plan to curtail increases in old-age security pensions—a proposal that was scrapped because of widespread public opposition—that is an issue that the reinvigorated opposition is sure to exploit. But this time it would be even harder for the government to retreat.

—ROY MACGREGOR in Ottawa with bureau reports