Column

PAUL, DO THIS FIRST, PLEASE

Business says Martin’s first priority is fixing the U.S. relationship

MARY JANIGAN October 27 2003
Column

PAUL, DO THIS FIRST, PLEASE

Business says Martin’s first priority is fixing the U.S. relationship

MARY JANIGAN October 27 2003

PAUL, DO THIS FIRST, PLEASE

Column

Business says Martin’s first priority is fixing the U.S. relationship

MARY JANIGAN

HE PROBABLY DOESN’T take over until early next year—but the Public Policy Forum has already devised its “to do” list for Paul Martin. The Ottawa-based think-tank had firm rules when it asked 75 senior executives across the country to mull over their priorities for the new PM last month: no one could prattle about tax cuts or other self-interested schemes; each had to consider the national interest. The resulting report, which will be released this week, does not mince words: the No. 1 priority is “the relationship deficit” with the United States. The executives did not advocate that Canada join the U.S. in its ruinous Iraqi adventure. “They believe we can stand firm with our values and differences of opinion,” says consultant Jodi White, who produced the study, “but that the U.S. is still our best friend and should be treated that way.” Martin and the premiers, she adds, should swing through Washington as soon as possible in a gesture of goodwill.

It is the season of lists—for a prime minister-in-waiting who cannot possibly fulfill every demand. But there are clearly three overwhelming challenges, including the forum’s first priority, that Martin will confront when he takes office. And there are no easy solutions:

U.S. SALES account for almost 40 per cent of Canada’s GDP: the country’s economic health depends on the maintenance of a hassle-free border

m For starters, I have found it difficult to watch Prime Minister Jean Chrétien gratuitously poison our relationship with the U.S.

He took a principled stand to keep Canada out of the Iraq war. But he did not stop Liberal MPs and aides from heaping invective on George W. Bush’s thinskinned, security-conscious administration. And he has made virtually no effort to repair the damage. This is not a healthy situation. U.S. sales account for almost 40 per cent of Canada’s GDP: our economic health depends on the maintenance of a hassle-free border.

In a C.D. Howe Institute lecture this week, historian Jack Granatstein will argue that Canada must recognize its reliance on the U.S. and patch up the relationship. “We simply cannot afford to lose that market,” he says. “And we simply cannot afford to alienate the Americans so they interfere with our ability to get to that market.” Unlike Granatstein, I do not believe this means we should have supported the Iraq war. But it does require more civility—and an increased emphasis within cabinet on Canada-U.S. issues. Easy to say. But it is not easy to say “No” to this administration. And it is not easy to rekindle cordiality in troubled times while avoiding the impression of pandering.

■ Martin has an ambitious agenda: tax cuts, debt reduction and spending proposals including more funds for cities. Those plans are always difficult to juggle. But Ottawa has also promised to give $2 billion to the provinces for health care—If the federal surplus exceeds $3 billion. Economists now say, however, that Ottawa will not know the extent of its 2003-2004 surplus until next fall, partly because it has recently introduced a new, complicated bookkeeping system. Worse, given unexpected crises such as SARS, that surplus is likely to be relatively small. (Finance Minister John Manley will offer a first glimpse at how small on Nov. 3.)

Two weeks ago, Manley added that he might dip into his $3 billion rainy day fund— because the provinces are counting on that money. Get in line. “Everywhere I go across the country, I meet people who think their cause is going to be Martin’s top priority,” says Toronto-Dominion Bank chief economist Don Drummond. “But Martin probably does not have huge funds above those contingency reserves, so he is going to have to work within the existing spending envelope to the largest degree.” In other words, folks are bound to be disappointed—and aggrieved.

» After a spate of headline-grabbing federal scandals, voters have reason to suspect that Ottawa is careless with their tax dollars. That impression is going to get worse: next month, Auditor General Sheila Fraser issues her long-awaited report on federal sponsorships and contracts. To appease public concern, Parliament is now considering an ambitious bill that creates new ethics officers for the House of Commons and for the Senate. A sensible and long overdue move.

But Ottawa has not gone far enough. As it stands, the prime minister will appoint the ethics officers—after consultation with the Opposition, although he does not have to secure its approval. And the legislation does not address the fact that the government’s watchdogs, from the auditor general to the information commissioner, do not have the power to force action and impose penalties. They can only recommend. “You are dealing with people who are used to rubberstamping whatever they do as ethical,” says Duff Conacher, coordinator of Ottawa-based Democracy Watch. “In order to clean up such a system, you need a system with no holes in it at all. Otherwise, any loopholes will be exploited. And there are loopholes.”

These three issues constitute tough, interconnected problems. How do you ensure good relations with the U.S. unless you put more money into defence and security? How do you find those funds when there may not even be cash for provincial health needs? And how do you convince anyone of your sincerity if money is being wasted? Alas, there is no quick fix. And that alone spells tough times ahead for the new PM and his endless lists. 171

Mary Janigan’s column appears every other issue. mjanigan@macleans.ca