ROSS LAVER December 5 1988



ROSS LAVER December 5 1988




Last week’s general election apparently sealed the future of the Canada-U.S. free trade agreement,but it left an important issue unresolved: what Brian Mulroney will do for an encore. For better or worse, Canadians will likely have to wait a few more months before they find out. Mulroney’s immediate challenge as he maps out the agenda for his second term is to clear up the heavy backlog of unfinished business from his first. In addition to the trade legislation, the list includes bills to implement the Tories’ national child care program, update the broadcasting laws and reform the Canada Elections Act. The government also committed itself in the last Parliament to introducing a controversial new national sales tax. Only when those

tasks are completed will Mulroney be free to devote his full attention to deciding how he intends to proceed.

Promises: Despite his party’s resounding victory on Nov. 21, Mulroney’s task wifi not be easy. One factor that may work in his favor is that the Tories did not have to make a long list of campaign promises in order to win reelection, although during the run-up to the campaign, they committed $8 billion to new government projects and initiatives. By running on its record, the government made sure that its hands would not be tied. But in so doing, the Tories lost the opportunity to get a clear mandate for any major new programs. Mulroney already faces tough challenges as a result of his previous commitments and initiatives—particularly on the thorny issue of a new federal sales tax, the details of which have yet

to be made public, and the Meech Lake constitutional accord, still not ratified by the New Brunswick and Manitoba governments. Clearly, if he decides to move in any new, unheralded directions, he will have to tread cautiously if he wants to avoid alienating his supporters.

Promotions: The immediate agenda, at least, is clear. Last week, Mulroney announced that he was recalling Parliament on Dec. 12. After a brief throne speech, the Tories plan to reintroduce the trade bill in hopes of getting it approved by the House of Commons and the Senate before the Dec. 31 ratification deadline. The U.S. Congress has already approved the agreement and, in the aftermath of last week’s election, both the Liberal and New Democratic Party leaders pledged that they would not attempt to block it in either í chamber. The Canada-U.S. “ agreement would then go I into effect on Jan. 1, beginD ning a 10-year process to eliminate virtually all tariffs on goods and services traded between the two countries (page 40).

In most other respects, however, Mulroney’s government will be in a holding pattern until early in the new year. Six of his 39 cabinet ministers lost their seats in the election, most notably Justice Minister Ramon Hnatyshyn, Communications Minister Flora MacDonald and Solicitor General James Kelleher. But instead of replacing them immediately, Mulroney will ask other ministers to take over their duties while he decides how to reorganize the Tory front benches. One reason for the delay is that the Prime Minister wants to wait until the inevitable lobbying for promotions dies down.

When the shuffle does occur, probably in late January or early February, Mulroney aides said that he would probably attempt to streamline the cabinet structure by reducing the number of ministers to about 35. As well, there are likely to be changes in duties for senior ministers. Energy Minister Marcel Masse, who, in the past, has criticized the government’s cultural and energy policies, could be shifted to a less prominent portfolio, and International Trade Minister John Crosbie, to Justice. Crosbie’s harsh attacks on opponents of the trade agreement during the campaign angered some senior Tories. Said one senior policy adviser: “Crosbie has proven once again that he cannot discipline himself.” Party officials say that Employment and Immigration Minister Barbara McDougall, meanwhile, is in line for promotion to a senior economic portfolio, although she has told friends that she also would like Communi-

cations—a post that could go to David MacDonald, elected in Toronto. Most other senior ministers, including Joe Clark at External Affairs and Donald Mazankowski as deputy prime minister, will probably stay where they are. And last week, Mulroney announced that Michael Wilson will remain at Finance.

Impossible: But the appointments that likely will receive the closest scrutiny from Mulroney will be those in his own office. His chief of staff, Derek Burney, has been credited widely with establishing a sense of order in the Prime Minister’s Office (PMO) in the last year of his first term, but he is now leaving to become Canada’s ambassador in Washington. To avoid serious problems later, Mulroney will need to replace Burney with someone who has inside knowledge of the mechanics of power—some-


one who knows, as one adviser put it, “how to get things done when people tell you that it is impossible.” Reid Morden, currently director of the Canadian Security Intelligence Service, is one possible candidate for the position. Mulroney may also ask Toronto lawyer John Tory to become his principal secretary, responsible for political affairs—but only if current Principal Secretary Peter White decides not to stay on.

Privately, Mulroney’s advisers say that they expect the Prime Minister to play a far more

assertive role in his second term than in his first. His ability to endure a prolonged slump in the public opinion polls and then rebound to capture a second majority in the face of the Liberal resurgence has greatly enhanced his stature within the party. Said one official in the Prime Minister’s Office: “Mulroney has made a career out of being underestimated, but he is now much more sure of himself.” Another party veteran said that Mulroney had spent the past four years as a consensus-seeker within the party but that, from this point on, he will likely set the pace. “Mulroney is now his own man—he owes very little to anybody,” the adviser said. “I foresee more people turning to him and inviting him to make the decisions. He will put more of his own mark on the government and the party.”

Still, if experience is a guide, Mulroney will not want to take his government in any uncharted directions. A pragmatist, he instinctively shies away from controversy, believing that it is more important to reassure voters through continuity than to challenge them with dramatic new policies. That approach, his supporters maintain, was one of the major reasons behind the party’s success in winning a second term. “Some day, people are going to wake up and realize how good this guy is,” said Harry Near, a close adviser to the Prime Minister.

“He has a much better understanding than he used to of how things work in government. And his moderate brand of conservatism is the only conservatism that works in this country.”

Hard choices: But not all Tory MPS agree with that prescription. Some of the right wingers in his caucus were impatient with the slow pace of economic reform during Mulroney’s first term. Now that the government has won a second, they argue, the time has come to tackle some of the country’s problems—including the size of the federal deficit and the spiralling cost of the social-welfare system. “When we took office in 1984, a lot of our ministers did not have a clue as to what they were dealing with,” said Tory MP Donald Blenkarn, a prominent right winger and chairman of the Commons

finance committee in the last Parliament. “But now we have a good handle on management, and it is time to move on to some of the hard choices that we did not have time for in our first term.” Indeed, last week, Blenkarn ignited a storm in the capital when he said that, having been rejected by voters in 12 of 14 area seats, “why wouldn’t you cut back on everything you could in Ottawa?”

Wages: Among other things, Blenkarn said after last week’s election that the government should reassess the unemployment insurance


system as part of its search for ways to cut government spending. “Right now, people are refusing to take jobs that pay $300 a week because they can get more than that on UIC,” he said. “There is definitely excess cost in there, and it is forcing employers to pay higher wages just to attract people back into the workforce.” In addition, Blenkarn said that the government should consider shutting down governmentowned Via Rail Canada Ltd., which receives $500 million a year in federal subsidies, and selling off such state-owned enterprises as Petro-Canada and the country’s airports.

Hard-liners: Those who know Mulroney best insist that he will not be diverted from his moderate agenda by pressure from his party’s hard-liners, such as Blenkarn.

Indeed, the party’s commitments during the campaign may now keep the Tories on a more moderate track than they had originally intended.

One party official said last week that some Tories still want to re-evaluate social programs and bring costs under control, despite the fact that an earlier attempt to cut back pension increases was hastily abandoned in 1985 after widespread public criticism. But he said that the government is unlikely to accommodate those demands because of its repeated denials during the impassioned debate over free trade that the agreement placed social programs at risk. Added the official: “The opposition would be waiting to scream if we did anything now.”

Alienation: For their part, more moderate Tories say that in the wake of the free trade debate—and the loss of so many seats in less favored areas to the Liberals—Mulroney will have to work hard to convince Canadians that he shares their values and aspirations. Said Ronald Atkey, a former Toronto MP who worked on the winning campaign of former Tory minister and diplomat David MacDonald in the central Toronto riding of Rosedale: “The biggest task that Mulroney has is to prevent the alienation

of the poor. He has to break the developing image that he is a product of big business.” At the same time, Atkey said he is worried that the government could begin to drift further to the right of the political spectrum. “The sec-

ond term of a conservative government is usually more right-wing than the first because there is a growing confidence and cockiness.” Internationally, Mulroney can probably look forward to warm relations with U.S. presidentelect George Bush. Like Mulroney, Bush is a

pragmatist with little evident ideology. “In many ways, Mulroney has more in common with Bush than he did with Ronald Reagan,” said Richard Anderson, a consultant from Ottawa who now works as a lobbyist in Washington. “I frankly think that the relationship will work I out pretty well.” Anderson added that the I recent controversy over free trade and its effect on Canadian sovereignty has awakened many Americans to the sensitivities that exist in Canada over trade issues. As a result, he I said, American legislators will likely approach trade disputes between the

natives. For Mulroney, reI newed controversy over Meech Lake was another sign that his second term will be no less

two countries more carefully.

“I do not know how long it will last, but my hunch is that they will be more willing to

solve disagreements through

consultation rather than liti-

gation. Otherwise, they will know that they are píaying

with fire in terms of Canadian

emotions and nationalism.”

Support: Finally, Mul-

roney remains determined to

complete the other major initiative that has carried over

from his first term: the

Meech Lake constitutional

accord, which recognizes

Quebec as a “distinct society" and gives the provinces

mere power in areas such as

immigration and the selection

of senators. The agreement needs the support of all 10 legislatures before June, 1990, if it is to go into effect,

but, so far, only eight have

given their assent. Last

week, Mulroney said he

election victory, the two remaining provinces, Manitoba—where the Conservatives have a minority

Brunswick, would move quickly to ratify the accord. But his request earned a

sharp rebuke from Manitoba

Liberal Leader Sharon Carand provincial NDP Leader Gary Doer, both of whom said that they would not support the accord in its present form. And in New

Brunswick, Liberal Premier

Frank McKenna said that he

would continue pressing Ot-

tawa for amendments to pro-

tect the rights of women, mi-

nority language groups and

contentious than his first.