A hot time in the old town

E. KAYE FULTON June 24 1996

A hot time in the old town

E. KAYE FULTON June 24 1996

A hot time in the old town

Mulroney and the premiers dominate the presummer agenda


With his seemingly casual—and often disdainful— approach to Canada's enduring constitutional woes, Prime Minister Jean Chrétien likes to boast that he reflects the mood of the nation. In a display of considerable grumpiness last Thursday, for in-

stance, Chrétien waved off advisers who hovered impatiently outside his office with briefing books that detailed the bickering and bartering expected at his two-day meeting with Canada’s premiers in Ottawa this week. Instead of policy statements about renewed federalism or expert advice on constitutional obligations, Chrétien preferred to extend a five-minute courtesy visit with Acadian Rhéal Cormier, a starting pitcher for the Montreal Expos, into a half-hour of baseball gossip. Such nonchalance was both typical and deceptive. Behind the scenes, cabinet ministers and senior officials scrambled to secure the type of deals that Chrétien could showcase as proof that the liberal government not only has a national unity agenda, but one that will work. The mood at the top,

however, was blissfully serene. “You can tell,” said one Chrétien aide, “that it’s the end of the season.”

As the federal Liberal government prepares to close down Ottawa on June 21 for the traditional three-month summer break, the business of politics is anything but finished. Senior Liberal strategists are weighing the political fallout of an expected out-ofcourt settlement of more than $1 million to end former Conservative prime minister Brian Mulroney’s $50-million libel suit against Ottawa in the Airbus affair. In the midst of the turmoil, the arrival in Ottawa on Thursday of two territorial leaders and 10 provincial

premiers, including Quebec’s recalcitrant Lucien Bouchard, will likely expose more conflicting interests than goodwill in the Liberal plan to remould the economic and social framework of the country.

In fact, two premiers—Bouchard and British Columbia’s Glen Clark—have said they would boycott the brief portion of the First Ministers’ meeting dealing with the constitutional amending formula, while a third, Alberta’s Ralph Klein, has said he won’t participate in any private discussion of the matter. Publicly, the three premiers have complained that there is not enough time allotted on the official agenda to the economy and job creation. But privately, even after a series of meetings and telephone conversations, many provincial leaders could agree late last week on few, if any, of the nonconstitutional items on Ottawa’s agenda, ineluding the further dismantlement of interprovincial trade barriers, the formation of a national securities commission, and reduced federal spending powers. Ironically, there was one subject that seemed to meet little resis-

tance: a plan to embark on a joint federal-provincial ‘Team Canada” international trade mission, most likely to South Korea and Taiwan, as early as next January. Said one senior Liberal: “Everyone

says they want to work together for Canada, but so far no one can put aside parochial political interests long enough to do it.”

Last week, Chrétien delivered a pragmatic promise to fix the federal system “one problem at a time.” And behind the scenes, it appeared that the Liberal government was also trying to solve an-

other problem of its own: how to extract itself from the messy Airbus affair. Justice Minister Allan Rock conceded that federal officials had informally met with Mulroney’s lawyers to discuss a settlement of the suit launched by the former Tory prime minister last Novembér. Mulroney is seeking $50 million in damages over RCMP and federal justice department allegations that he received $5 million in alleged kickbacks related to the $1.8-billion purchase by Air Canada of 34 jets from the European Airbus consortium in 1988. But CBC News reported that the former prime minister may be willing to settle out of court in return for an emphatic apology, legal expenses and a contribution to the charity of his choice. Some Tory sources told Maclean’s that the liberals had in fact already broached the subject of an out-ofcourt settlement at the time of Mulroney’s pretrial testimony in Montreal last April—offering, among other things, to “express regrets” to Mulroney. Senior officials in Chrétien’s office would neither confirm nor deny those reports. Indeed, the jockeying on both sides of the

dispute to gain political, if not legal, advantage resurrected classic images of the long-standing rivalry between the Tories and the Grits. “No one can win in this situation,” said Tory Senate Leader John Lynch-Staunton. But Staunton acknowledged that he has been part of the political skirmishing—on May 14, he filed 35 pages of questions to the Liberals concerning the Airbus affair designed, he said, “to annoy the government.” Senior Tories privately concede that Mulroney might have garnered more public sympathy if he had sued the government and the RCMP for a nominal sum rather than $50 million that, in the event of victory, would come directly from the pockets of Canadian taxpayers. As for the Liberals, it is in their best interests to end the affair before a federal election—given the deepening perception that they have fumbled the case. But Rock insisted last week that it would be up to Mulroney, not Ottawa, to propose a settlement—and that an outof-court agreement would not be an acknowledgment of Mulroney’s innocence. Said Rock: “Parties reach an agreement for all kinds of practical reasons.”

Even if the government should reach a settlement with Mulroney, other agreements are certainly eluding Ottawa. It is making little progress in discussions with individual provinces to implement measures of the so-called renewal of the federation outlined in last February’s throne speech. Meanwhile, the state of the economy, the Prime Minister said, would be discussed over a private dinner at 24 Sussex Drive opening the conference on Thursday. A job creation scheme and internal trade would be covered during a 2y2-hour Friday lunch, followed by a re-

view of social policy. Scheduled in between was a perfunctory discussion of the constitutional amending formula and a detailed debate about Ottawa’s proposals for revamping the federation.

But the provincial leaders clearly have another agenda. Western premiers plan to push for a national debt-reduction strategy that would prevent Ottawa from off-loading its fiscal problems onto other levels of government. Saskatchewan and British Columbia want to protect themselves from key elements of an internal trade proposal to ensure labor and trade mobility among provinces. Quebec and British Columbia are adamantly opposed to a national securities commission that would intrude into provincial jurisdiction, while virtually every province west of New Brunswick disagrees with the $l-billion deal Ottawa made with three Atlantic provinces to harmonize their provincial taxes with the federal Goods and Services Tax.

The provinces are also prepared to push Ottawa to the wall over the issue of federal standards in the area of social programs. Most of the provinces want a fundamental shift: a 20-page report, compiled by provincial officials in 1995 and endorsed by all except Quebec, calls for Ottawa to stop imposing rules on provincial health and welfare programs. (Many provinces also want Ottawa to relinquish its control over unemployment insurance.) Arguing that Ottawa cannot cut federal cash transfers to the provinces and still expect them to live up to rigorous national standards, the premiers want the federal government to give the provinces equal say in determining which services should be covered by medicare—as well as how to penalize provinces that violate the Canada Health Act through user fees or extra billing. That proposal alone—and the remote possibility that Ottawa might go along with it—will distress many Canadians who cherish Ottawa’s role in the preservation of the social safety net. “This is not what the Liberals


Prime Minister Jean Chrétien’s announcement that a portion of this week’s First Ministers’ meeting would deal with “renewing the federation” brought a chorus of protest from premiers who said that Ottawa should steer clear of what they called the constitutional quagmire. A sampling:

“We’ve got to learn from the past We’re not going to solve constitutional questions by a bunch of premiers sitting around and talking about it”

—British Columbia Premier Glen Clark

“If it’s a constitutional meeting, I can’t go, given my public undertaking to not attend any meetings unless they were open and very public.”

—Alberta Premier Ralph Klein

“We don’t need to talk about this. We should get on to what Canadians want us to talk about—jobs, economy.” —Saskatchewan Premier Roy Romanow

‘There are people who want to gather us around a table to start over the same futile, sterile exercise we have lived through for the past 30 years and which has ended in failure. We no longer intend to fall into those traps, those swamps.”

—Quebec Premier Lucien Bouchard'

promised when they ran for office in 1993,” says social activist Maude Barlow, chairwoman of the 60,000-member Ottawa-based Council of Canadians. “Basically, this is a dramatic retreat from the whole role of governing. We are no longer a nation, we are just an economy.”

To some degree, that sentiment echoes Lucien Bouchard’s controversial statement on Jan. 27 that Canada is not a real country. Bouchard may not necessarily repeat such hardline comments at the First Ministers’ table this week—but observers are still wondering what to expect of the Quebec premier. Last week, Bouchard accused the Liberal government of secretly promoting a more centralized form of government in a “thinly veiled attempt at a Trudeauist renewal”—an accusation that puzzled many public policy experts who argue that, if anything, the Liberals of the 1990s are dismantling the very foundation of the social welfare system their predecessors built. The comment underlined

the unpredictability of the Quebec premier, who must satisfy hardline separatists with attacks on Ottawa, while reassuring more moderate Quebecers who, according to provincial opinion polls, want more emphasis on Quebec’s ailing economy.

More predictable was Bouchard’s refusal to participate in discussions involving the Constitution.

The Quebec premier plans to walk out of the room during a 30-minute session that was scheduled to satisfy a constitutional requirement that Ottawa and the provinces discuss the amending formula before next April. At one level, the controversy is pure politi-

cal theatrics—and beneficial to both Ottawa and Quebec. Anxious to avoid a full-blown constitutional conference next year in the walk-up to a federal election, the Liberal government is neatly sidestepping such a meeting that party strategists say could only help the separatist cause by providing it with a target to attack. For Bouchard, the presence of the Constitution on this week’s agenda lets him maintain his vow to shun any federal attempt to address the province’s constitutional demands.

Ironically, though, many of the topics on the agenda appeared in the failed Meech Lake and Charlottetown accords—which both contained proposals to devolve some federal powers to the provinces—but under the guise of administrative, rather than constitutional, reform. “There are some very fine distinctions here,” said Osgoode Law School dean Patrick Monahan, a constitutional expert. “Bouchard will have to shuffle in and out of the room if someone mentions a word he doesn’t like.” In the atmosphere that has descended on Ottawa, such behavior would perhaps not be considered strange.


in Ottawa