COVER

HOW MUCH CAN CANADA TAKE?

THE LIBERALS LOSE THEIR SENATE MAJORITY BUT STALL THE GST BY TACTICAL DELAYS

BRUCE WALLACE October 8 1990
COVER

HOW MUCH CAN CANADA TAKE?

THE LIBERALS LOSE THEIR SENATE MAJORITY BUT STALL THE GST BY TACTICAL DELAYS

BRUCE WALLACE October 8 1990

HOW MUCH CAN CANADA TAKE?

COVER

One by one, they walked down the aisle to be sworn in as new Conservative senators. For Prime Minister Brian Mulroney’s 13 political foot soldiers, the war revolved around a simple issue: ending Liberal control of the upper house and ensuring passage of the government’s controversial Goods and Services Tax (GST), which the Senate’s Liberal majority was preparing to block. For the most recent nominees, their appointments and arrival in Ottawa were arranged in less than 48 hours in order for them to take their seats for the Sept. 25 opening of the fall sitting. Montreal businessman John Lynch-Staunton, whose paternal grandfather was also a senator, did not even have time to arrange for his wife, Juliana, to be in Ottawa for his induction. Another new recruit, Montreal financier and former provincial Liberal cabinet minister Claude Castonguay, described his first day in the chamber as “curious,” and wandered the corridors late into the evening examining portraits of past speakers of the Senate.

But it was readily apparent that those new recruits would not be enough to break the Opposition’s grip on the Senate, entrenched during the years of Liberal rule from 1963 to 1984. Just two days later, Mulroney boldly resorted to a never-used constitutional provision that added eight new seats to the Senate—and named eight supporters to tilt control to the Tories. But Mulroney’s combative tactic tore at the already raw partisan nerves now exposed in Ottawa over the GST, which is intended to replace the existing manufacturers’ sales tax (page 22). In the upper chamber, the Liberals, under their crafty leader, Allan MacEachen, responded with a procedural tactic that effectively froze the GST legislation indefinitely. “The battle against the GST in the Senate has just begun,” said MacEachen. Then, from several quarters, challenges to the constitutionality of the Prime Minister’s actions arose. But Mulroney signalled a willingness to fight. Declared the Prime Minister: “What is at stake here is democracy itself and the principle of responsible government.” Democracy, responsible government—

THE LIBERALS LOSE THEIR SENATE MAJORITY BUT STALL THE GST BY TACTICAL DELAYS

those great ideals were cited frequently during last week’s struggle in Ottawa. The Tories attempted to take the high moral ground, arguing that the nonelected Senate did not have the right to reject legislation initiated by the elected Commons. For their part, the

Liberals claimed that the outpouring of public opposition to the GST and Mulroney’s Tories, at a time when the Conservatives had slipped to an all-time low of 15-per-cent support in public opinion polls, had left the Senate as the only body in the country representing the real interests of Canadians. But some analysts noted that both parties were playing with fire. “We are testing the patience of the people,” said University of Toronto political science professor Peter Russell. “Even for a good cause, playing with the Senate is an awful device to use. Gimmicks will just increase disdain for governments.”

Still, there were compelling signs that many Canadians were willing to set aside widespread reservations about the role of the upper house and support the Liberal senators’ stand against the unpopular tax (page 26). Said Sydney, N.S., Mayor Manning MacDonald: “People are not wondering or worrying about who is playing what political games in Ottawa. They just do not want this tax.” Many critics of the tax found its timing particularly troubling because of Canada’s current economic slowdown. Economic analysts noted that, with a recession possible, putting a new, wider-based sales tax into effect on Jan. 1, as the government plans, could further slow consumer spending and hasten a downturn (page 24).

'Repugnant’: Still, serious issues also arose over the nonelected Senate’s display of political might—and over Mulroney’s extraordinary response in blatantly packing the upper house with supporters. Said Preston Manning, leader of the Alberta-based Reform Party, a vocal proponent of Senate reform: “Mulroney does not appreciate how repugnant this stuff is.” But the Reform leader also accused the Liberals of masquerading as critics of the GST while secretly expecting it to be implemented. Added Manning, whose party’s popular strength has ^ increased dramatically in Alberta and British lt; Columbia largely because of its opposition to 9 the GST: “The Liberals would like to see the I Tories get the blame for the tax, while they get I the revenues from it if they form a government « next time.”

Liberal Leader Jean Chrétien may have rein-

forced that suspicion himself by waiting until last week to declare that he would encourage the Liberal senators to defeat the tax. But party strategists said that fears that Chrétien would be accused of playing politics with the GST accounted for the delay. And they expressed concern that some Liberal senators could not be counted on to show up to vote against the bill. Said one Liberal MP, who requested anonymity: “Chrétien was nervous that he would not be able to get enough votes to make good a pledge to kill the GST. They waited until they were sure they could really kill it before they acted.”

Obstinance: When the Liberals finally announced their intentions, less than an hour before the Senate’s fall sitting started on Sept. 25, they placed Mulroney in a precarious political situation. If the Senate defeated the bill, the Prime Minister, armed with a demonstration of its obstinance on such a fundamental issue, could then have had a stronger case for packing it. He could then have passed the GST legislation again through the Commons and taken it to a Tory-dominated upper house—ensuring in the process that the GST passed in time to meet its Jan. 1 implementation date. But that option had one major flaw: having MPs vote again on the GST could expose misgivings within the Tory ranks about the unpopular tax. As one

senior Chrétien aide observed, “We would love to force all those western Tories to stand up and vote for the GST all over again.”

Jet: Instead, Mulroney accelerated his counterattack. Senior Tories had previously threatened to invoke Section 26 of the British North America Act, which allows the government to apply to the British monarch to create four or eight new Senate seats. Last week, Mulroney sent a representative to London on a government Challenger jet. Early on Thursday, he announced that Queen Elizabeth II had approved his request to create eight additional Senate seats. Then, with her mandatory retirement date due on Oct. 20, Alberta Tory Senator Martha Bielish stepped down, clearing the way for Mulroney to appoint nine new senators in one day.

Among them was a former longtime Conservative party national president, now a Toronto lawyer, Michael Meighen, and Winnipeg consultant and Tory loyalist Janis Johnson. But they also included a former minister in Premier Robert Bourassa’s Liberal cabinet, Thérèse Lavoie-Roux, and such nonpartisan luminaries as Ottawa heart surgeon Dr. Wilbert Keon. The only litmus test for new senators: a readiness to help the Tory government frustrate the Liberals’ anti-GST strategy in the Senate. The appointments were needed, said Johnson, “be-

cause of the actions of Liberal senators who just do not like being out of power.”

Those new appointments brought to 24 the number that Mulroney has made since Aug. 30. That gives the Tories 54 supporters in the expanded, 112-seat upper chamber, barely outnumbering the Liberals’ 52. Those numbers shifted the odds in the Tories’ favor, but they did not automatically guarantee the GST’s passage. For one thing, there are also four Independents, one Independent Liberal and a Reform Party senator, and it was not immediately clear where their votes would go. As well, MacEachen and the Liberal senators had more tactical tricks to keep the GST bill from going to a vote at all.

Evidently worried about the imminent arrival of the final wave of Tory senators, Liberal Senator Royce Frith managed to pre-empt their appearance by invoking a little-known procedural tactic. By calling attention to “strangers”— visitors and media—in the Senate galleries, Frith was entitled to force the Senate to call a vote on adjournment. But then, as bells rang to call the senators to vote, the Liberals filed out of the chamber—paralysing it. Later, Frith explained the Liberals’ decision to match Mulroney’s Tories stunt for stunt. “They used an arcane constitutional provision to say, ‘Oh yes, we will,’ ” he said. “And we used an equally

arcane rule to say, ‘Oh no, you won’t.’ It all comes back to yes or no on the tax.”

The Liberals’ tactic left the GST legislation in limbo. By convention, the adjournment vote cannot be called until both party whips enter the Senate chamber. And even if that happens, explained one official, the GST vote could be delayed indefinitely because the Senate has no time limits on the length of speeches or the overall length of debates.

Said the official: “A motion can be put to set a limit on the debate, but that in itself is debatable.” As a result, the Liberals could conceivably gain political leverage by threatening to filibuster the GST past the Jan.l implementation date.

Meanwhile, challenges to the GST arose from other sources. The Alberta government said that it would go to court to contest Ottawa’s constitutional right to impose the tax. Some critics also questioned the constitutionality of the government’s Senate-packing manoeuvres.

The B.C. government launched a court challenge to Mulroney’s use of Section 26 on the grounds that it was not applicable in the present circumstances. And on Friday, NDP Leader Audrey McLaughlin said that, according to one legal interpretation, the new appointments may have violated the Constitution because they left New Brunswick with more senators (11) than MPs (10). The next day, after consulting with government and independent legal experts, Attorney General Kim Campbell said that the new appointees

were “a different kind of senator—a divisional senator” representing not specific provinces but regions of the country.

For his part, Nova Scotia Finance Minister Gregory Kerr, whose province has not decided whether to join the Alberta court challenge, said, “You have to separate what would be

perceived as posturing from what is a real possibility of winning a court case.” Declared Montreal constitutional lawyer Stephen Scott: “I would have to dig deep into my imaginative resources to come up with grounds to challenge the constitutionality of what Mulroney has done.” Still, some experts said that the possibility remained for the public to mount a revolt against the tax. Said Manning: “It remains to be seen whether or not we are passively prepared to be imposed upon.”

Clearly, the Liberals in the Senate were not willing to play a passive role. But some analysts said that the Liberals’ decision to block the tax—and Mulroney's unprecedented response—could actually haunt Chrétien in the future. As a result of the sudden emergence of a Tory majority in the Senate, the Liberal leader would be almost certain to face similar guerrilla tactics from the Tories if he ever formed a Liberal government. Said Calgary historian David Bercuson: “We will have government by Senate for the next six years, and that is intolerable in a democratic society.”

‘Crisis’: But Chrétien painted a different kind of future. He said that the crisis will ultimately fuel the drive for Senate reform—and bring the chamber's days as ¡2 an unelected body to an end. £ “The goal was to defeat the I tax, but the consequences £ were for the senators not to

1 be as secure in their jobs,” he

2 told Maclean’s. “I wanted to cause a crisis to change the

Senate.” Liberal strategists

also claimed that the slim Tory majority could be overcome in any post-reform Senate elections. Meanwhile, the unprecedented events left the GST’s future no more certain than that of the Senate—or the country—itself.

NANCY WOOD

E. KAYE FULTON

HAL QUINN

JOHN HOWSE

DAN BURKE

GLEN ALLEN

BRUCE WALLACE with NANCY WOOD and E. KAYE FULTON in Ottawa, HAL QUINN in Vancouver, JOHN HOWSE in Calgary, DAN BURKE in Montreal and GLEN ALLEN in Halifax