February 2 1987


February 2 1987



The Railway Committee Room of Parliament’s Centre Block is an austere meeting place. But when the Conservative caucus convened there on Sunday, Jan. 18, its members were in jovial spirits. Despite the government’s standing in public opinion polls—at a historic low point— the Tories were anticipating a return to the parliamentary fray. After a fourweek Christmas break, they seemed anxious to proceed with the government’s agenda: tax reform, a new budget and an overhaul of social programs. But the mood of relaxed optimism lasted barely more than a few minutes. After reviewing some routine business, Prime Minister Brian Mulroney announced that he had asked for—and received—the resignation of André Bissonnette, 41, minister of state for transport. The reason: a complex series of land sales in the minister’s Quebec riding of St-Jean that may have violated the government’s conflict-ofinterest guidelines—and the Criminal Code. “It was a very emotional few moments,” recalled Manitoba MP Brian White. “When Mulroney spoke, he was clearly shaken.”

Tremors: The Prime Minister was hardly alone. Last week the tremors of the Bissonnette affair (page 14) rippled through Conservative party circles across the country. The scandal, the latest in a series that has plagued the Mulroney government, plunged the government into what threatened to be its most serious crisis yet. By week’s end several news organizations reported allegations—unconfirmed—that Bissonnette, his wife, Anita Laflamme, and business partner Normand Ouellette, his former riding president, profited personally from the land deals. However, like many of the other charges during the week, no evidence was produced to support the allegations. The transactions, involving a 100-acre property in St-Jean, more than tripled the land’s value before it was sold to Oerlikon Aerospace Inc., which later won a $637million defence contract.

In the Commons, Liberal Opposition Leader John Turner and New Democratic Leader Ed Broadbent quickly seized the advantage. Bissonnette’s departure, the opposition noted, was the

sixth time in the past two years that a Tory minister has been forced to resign. Said Toronto Liberal MP John Nunziata: “This is another example of how rotten and corrupt this government is.”

Indeed, the scandal shook the govern-

Mulroney gave George Bush an earful, saying Cana with being taken for granted in Washingi

ment so severely that aides to Mulroney even debated the possibility of cancelling his scheduled trip this week to Africa (page 23). In the end, they decided to continue with the trip. But privately, advisers said that they feared that his visit would be a repeat of Mulroney’s Asian tour last May, when diplomatic successes in Japan,

China and South Korea were overshadowed by conflict-of-interest charges back home against former industry minister Sinclair Stevens. (The Prime Minister’s apparent streak of bad luck even extended to his family. Flying to Toronto Friday for a speaking engage-

ment, he and his wife, Mila, were told that their son, 10-year-old Benedict, had suffered a minor compression fracture in his back in a school-yard accident. Mulroney immediately cancelled his Toronto trip and ordered his plane to return to Ottawa.)

To compound Tory difficulties, the Bissonnette affair broke just as the

government suffered serious reversals on its most important policy initiative: enhancing Canada’s relationship with the United States. Buffeted for the past two months by criticism of his government’s handling of free trade talks and a range of trade disputes with Washington, Mulroney urgently requested President Ronald Reagan to send a high-level delegation to hear Ottawa’s concerns. Last week Vice-President George Bush and Treasury Secretary James Baker made a five-hour visit. With Bush at his side, Mulroney said, “Canadians don’t want to be on anybody’s back burner or taken for granted at any time.” For his part, Bush conceded that Mulroney had given him an “earful,” and agreed to relay Mulroney’s message to Reagan. But he promised no specific measures on any bilateral front.

Fumbles: Mulroney’s

aides said that the hastily arranged Bush visit demonstrated the Prime Minister’s influence in Washington. But opposition MPs refused to concede the Tories even a partial victory. Liberal 3 trade critic Lloyd Ax\ worthy said that Bush’s o visit was “simply a way of diverting attention away from the fumbles of this government.” Certainly, as the scandal widened, national attention was focused almost entirely on Bissonnette, not Bush.

Conservatives at all levels, and in all regions, were dismayed. Dalton Camp, a special adviser to the cabinet, described the scandal as “a very hard blow” for the Prime Minister. “I don’t suppose anything has hit him any harder than that,” said Camp, who acknowledged that Tory plans for the

winter sitting of Parliament had been thrown off course. Another senior Conservative said that before the Bissonnette affair broke open, Tory MPS believed that they could recover their lost popularity. But, he said, “to have this kind of thing come out of nowhere and deflect attention from your own agenda is psychologically damaging.”

Blame: The scandal may also have increased tensions in the Tory caucus. Some party officials said that a few veteran English-speaking MPs were be-

Under fire in the Commons from Broadbent (left) and Turner (right), Mulroney did not rule out a public inquiry

ginning to complain about less-experienced Quebec counterparts, blaming them for the party’s poor public image. In the past two years several rookie Quebec MPs have embarrassed the government. Aside from Bissonnette, Montreal-Gamelin MP Michel Gravel is scheduled to stand trial in March on charges of fraud. And former junior transport minister Suzanne Blais-Grenier resigned in 1985 amid questions about her performance in office. Said one Conservative insider: “The thing that is so unfortunate is the emphasis on Quebec. It is bringing out racist reactions.” However, Quebec MPs interviewed by Maclean's denied that there is friction.

The Bissonnette affair also threatened to inflict further damage on Mulroney’s personal credibility, which is already low, according to public opinion polls. Said Calgary MP Alex Kindy: “There is no doubt the image of the

Prime Minister is handicapped.” No evidence surfaced last week to suggest that Mulroney was personally implicated in the Oerlikon affair. But the names of two close personal friends— Montreal lawyer Jean Bazin, who is to be sworn in as a senator on Feb. 3, and Quebec businessman Roger Nantel— have been mentioned in connection with the controversy. Some Tories say that even if Bazin and Nantel are exonerated, their connection to the scandal may leave a lasting residue of suspicion.

In addition, political observers were increasingly questioning Mulroney’s ability to surround himself with competent, trustworthy people. One senior Conservative who has advised the Mulroney government described the Prime Minister’s staff contemptuously as “his knuckleheads,” and said that they have “a complete inability to run the machinery of government.”

Fired: Mulroney and his ministers maintained a stony silence on who knew what—and when—in the Oerlikon affair, saying it is up to the RCMP to investigate. Deputy Prime Minister Don Mazankowski acknowledged in the Commons that Bissonnette was fired at least partly because of suspicions of conflict of interest. But by calling in the RCMP, Mulroney left open the possibility of criminal wrongdoing.

Oerlikon itself shed some light on the affair last Wednesday when it filed suit in Quebec Superior Court asking

for $2.1 million from Normand Ouellette. The company contended that Ouellette “used his membership in Bissonnette’s entourage” to trick Oerlikon into the purchase, receiving $970,000 in the process. Still unclear last week was what part Bissonnette played, whether other family members and associates were involved, and whether the Prime Minister had evidence that Bissonnette and his wife profited from the deal.

Doses: Under fire in the House, Mulroney did not rule out some type of

public inquiry in the future, as demanded by the opposition. But he said that the RCMP believed a parallel inquiry could complicate its own investigation. In addition, a public inquiry could drag on for months, giving the opposition daily doses of information embarrassing to the government.

Meanwhile, opposition MPS, led by the Liberals’ Nunziata, said that they plan to mount a campaign to force Minister of State Roch LaSalle out of the cabinet as well. Last week they demanded an investigation into LaSalle’s hiring practices and his failure to ensure that his employees received security clearances. On Jan. 9 LaSalle fired his special assistant, Frank Majeau, after Maclean's questioned his office about Majeau’s criminal record. And last Monday LaSalle fired constituency assistant Gilles Ferland after it was discovered that Ferland had been convicted

in 1984 of attempted fraud and mischief.

LaSalle’s problems were compounded when he acknowledged writing a letter in 1985 recommending that Roger Perrault be hired as an accountant for a Crown corporation under his jurisdiction. Lasalle wrote the letter—to the Canada Land Corp. (Mirabel) Ltd.—even though he knew Perrault had been convicted of fraud. And yet another Tory cabinet member—Labor Minister Pierre Cadieux—faced personnel problems last week. Harold Hennessey, Cadieux’s chief of staff, resigned after a government-wide review revealed a discrepancy between what the aide had told the RCMP about his past and what the force’s own investigation turned up.

Licks: It was precisely to avoid recurrence of those problems that Mulroney turned last summer to two seasoned Conservative strategists—Camp and Norman Atkins. Camp, appointed a senior Privy Council office adviser, and Atkins, named to the Senate, have been credited with giving Mulroney a more decisive, statesmanlike and less partisan image. But according to two sources close to Mulroney, the Prime Minister often ignores their advice, relying instead on his senior adviser, Fred Doucet. Said one source: “Dalton gets in and gets his licks in, and his attitude is, ‘If they don’t listen, tough, it’s their problem.’ ”

Meanwhile, a Gallup poll published two weeks ago showed the party in third place, with only 28 per cent support among decided voters, compared with 30 per cent for the New Democrats and 41 per cent for the Liberals. Many Conservatives question whether they can recover in time for the next election, expected in 1988. Chief Tory pollster Allan Gregg predicted last August that the Tories had only a sixmonth “window of opportunity” in which to regain the public’s trust and confidence. Said David Cameron, political scientist at Dalhousie University in Halifax: “They can shuffle their cards a little bit, but the deck is basically dealt and there’s precious little time between now and the next election to make structural changes.”

Program: The government’s hopes for regaining lost popularity depend to a large extent on how successfully it handles the centrepiece of its economic program: negotiating a free trade deal with the United States. But Bush’s visit served only to underscore that the negotiations—and relations with the United States as a whole —have become a source of embarrassment.

President Reagan’s repeated assurances that he backs the trade talks have not been translated into concrete actions. In fact, Canada has been hit

by U.S. moves against one of its key exports, softwood lumber, and threatened with duties against others. Said one prime ministerial aide who refused to be named: “More and more we are being put in the position where we are seen as sacrificing Canada’s interests for a negotiation that [the Americans] don’t care about.”

Acid: Ottawa reacted sharply when, three weeks ago, the Reagan administration’s 1987 budget proposed no new money for controlling the acid rain that falls on Canada. The lack of ac-

A series of property flips tripled the land's value before Oerlikon bought it

tion, said Canadian officials, breached Reagan’s undertaking last March that he would endorse a five-year, $5-billion research program designed to reduce sulphur dioxide emissions, believed to be the major cause of acid rain. Ottawa was further chagrined when it learned that Washington had signed an acid rain agreement with Mexico.

The Mexican agreement provided a catalyst for action by Ottawa. On Jan. 15, Allan Gotlieb, Canada’s ambassador to Washington, was dispatched to Bush’s office to register Ottawa’s complaint and arrange a meeting with Mulroney. That same night the Prime Minister himself called Bush. The vicepresident consulted Reagan and the next day telephoned Mulroney to s^y he would come to Ottawa. Treasury Secretary Baker, who was already planning to meet with Finance Minister Michael Wilson, advanced his meeting to accompany Bush.

American officials last week acknowledged that the administration was eager to demonstrate that it does have a “special relationship” with Canada. Said Earl Fry, chairman of the Canadian studies program at Utah’s Brigham Young University: “They recognize that Mulroney has stuck his neck out and may have to toughen his rhetoric toward the United States. They worry about that.” Mulroney has a larger strategy as well to increase his popularity. Plans for major tax reform could increase

many Canadians’ take-home pay in time for the next election. Implementation of a national day care program could also earn the government some votes. And the Tories voice hopes for persuading Quebec to endorse the fiveyear-old Constitution.

Storm: The coming year will also allow Mulroney to portray himself as an international statesman, playing host to summits of both the Commonwealth and francophone nations. Conservative MPs praised him last week for his handling of the Bissonnette affair—but there was still uncertainty over how the Prime Minister will weather the political storm. Said Montreal Tory MP Vincent Della Noce: “If he doesn’t crack, we’ll get through this quite quickly. If he cracks, we’re dead.”