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Home , David Crombie, Doug Lewis (politician), Gilles Duceppe, James Kelleher, Paul Dick, Perrin Beatty

LOOKING OUTWARD: A CONSERVATIVE IN A NEW WORLD ORDER

Charles McMillan

The 2011 election produced a Conservative government that changed the nation’s political landscape, decimated the Liberal Party and reflects suburban Canada and the new industrial growth centres across the country. Instead of turning policy issues into a political calculus, the new and Parliament itself will require non- ideological policy agility at home and clever diplomacy abroad. In policy terms, in a global world, Canada will do well as an outward-looking, exporting nation selling high-value-added manufacturing and services as well as leading commodities with state-of-the-art technology and supply chains. The Harper agenda, in short, must focus mainly on economic competitiveness through a series of incremental measures. But the cumulative impact will be dramatic over the five- and ten-year horizons.

La recomposition du paysage politique canadien opérée par l’élection d’un gouvernement conservateur majoritaire a laissé le Parti libéral en ruine tout en mettant en évidence le Canada suburbain et les nouveaux centres de développement industriel du pays. Face aux défis stratégiques qui les attendent, le nouveau Cabinet et le Parlement lui- même devront délaisser le calcul politique au profit d’une souplesse dénuée d’idéologie pour traiter les questions intérieures et d’une diplomatie avisée en matière d’affaires étrangères. En termes d’action, le Canada a tout à gagner en se positionnant en pays exportateur ouvert sur le monde, dont les entreprises à forte valeur ajoutée vendent des services et des produits de pointe fondés sur les dernières technologies et de solides chaînes d’approvisionnement. En clair, le gouvernement Harper doit donner priorité à la compétitivité du pays en adoptant un train de mesures progressives dont l’effet cumulatif sera pleinement ressenti à l’horizon des cinq à dix prochaines années.

very generation, the politics of Canada faces a sea broke the Liberal stranglehold in 1984, not change in the electoral map. Just before the only gaining a huge national majority of 211 seats in what E Charlottetown Conference of 1864, John A. was then a 282-seat House, but legitimizing Conservative Macdonald and George-Étienne Cartier developed a new candidates in the 110 ridings with francophone pluralities, political alliance between and John A.’s helped in part because many francophone voters thought in Canada West, and that pact brought them government he was a francophone. power for a generation. broke the back of the Now , cleverly uniting the fractious con- Conservatives in his electoral victory of 1896, setting the servative forces in the Reform and parties Liberal Party as the true governing party for the 20th centu- with the remnants of the Progressive Conservative Party, ry, one of the most successful political machines in the dem- and surviving five years of a , against ocratic world. Despite ups and downs, Mackenzie King three opposition parties, has gained uniquely a national continued Laurier’s coalition of francophones and strong majority with seats in every province. He has now decimat- regional ministers in each region, the pattern of every ed the Liberals in their two electoral fortresses, and Liberal prime minister from St-Laurent and Trudeau to , and they have virtually no support in western Chrétien and Martin, helped hugely by alternating fran- Canada, a cruel legacy of Trudeau’s National Energy cophone and anglophone leaders. Program. In the only area where his electoral fortunes are ’s election sweep in 1958 was in some low, the province of Quebec, Harper has the chance to build respects always ill-fated, leaving the Conservatives with a a new Conservative base from scratch, without relying on western-based rump when the Tories left office in 1963. any machine “borrowed” from other parties, Mario

POLICY OPTIONS 135 JUNE-JULY 2011 Charles McMillan

Dumont’s ADQ, the provincial Liberal tor” seemed to be in play in key ridings the legacy of the sponsorship scandal, Party, or a few stray Créditistes, nation- in Ontario and . The and continuing low standing in western alistes or independent voters in certain ordinary had become potentially Canada. While holding incumbent rid- ridings, including disgruntled federal extraordinary. As pundits know, a ings in Ontario, the island of Liberals. week is a long time in politics, as more and their core seats in , In short, Harper’s new majority coali- than 2.5 million shifted the Liberals hoped to make gains in BC, tion is truly widespread, by geography, by their voter allegiance toward the the Quebec City region and selected rid- ethnic and language support, among the Conservative and NDP candidates. ings in Ontario, helped by the provin- new urban voters in the bigger cities, and, Federal elections are sometimes cial Liberals. crucially, in the growth areas of Ontario decided in the final days. Armchair pre- But the NDP surge had changed these calculations, especially The “Jack factor” seemed to be in play in key ridings in Ontario with so many three-way and British Columbia. The ordinary had become potentially fights and fears of a low turnout, which tends to extraordinary. As pundits know, a week is a long time in favour incumbents. Political politics, as more than 2.5 million Canadians shifted their voter reality is often in short sup- allegiance toward the Conservative and NDP candidates. ply in political war rooms. For the NDP, the bad news and , which will gain at dictions ranged from a 1984 Brian may be that the chance to pick up Bloc least 28 new seats from redistribution. Mulroney-style blowout (never likely, seats in Quebec will provide the Winning a majority without seats in even if the Liberals collapsed to a Kim Conservative government with wedge Quebec — the subject of a controversial Campbell result), with Stephen Harper issues against their members outside memo to John Diefenbaker from his getting 200-plus seats, to a 1990 Bob Quebec. To most Canadians, the good national director, James Johnston in 1958 Rae NDP shocker with lead- news is that the Bloc’s support is coming — is now a mathematical certainty, with ing a minority government, a predic- to an end, remaining only as a political implications for all parties. tion made by Craig Oliver of CTV. The redoubt for old-line Parizeau separatists. Conservatives kept to their game plan The Prime Minister and his acing the last 14 days of the elec- and the Prime Minister kept his cool, Conservative organizers — a combina- F tion, Canadians seemed set to despite some adverse poll numbers, tion of western Reformers and Canadian return another minority Harper gov- knowing the reinforcement effect of Alliance street fighters, Mike Harris ernment. The Prime Minister had kept their massive TV and radio advertising operatives from Ontario and a select to a simple script — a stable majority would help close the deal. From the group of senators and constituency staff government instead of parliamentary beginning, they ran less a truly nation- from the Mulroney era — forged a for- coalition uncertainty and a jobs-ori- al campaign than one highly focused midable all-season election team, com- ented growth plan rather than tax- on about 30 targeted seats, hoping to bining the ruthless intensity of a Lee and-spend opposition platforms. retain their 142 seats but pick up anoth- Atwater-style desire to win with a Karl Then, like a bolt out of the blue — not- er 15 to 20 to give them a comfortable Rove-style understanding of the chang- ing two respectable national debates, but hardly overwhelming majority. ing political excellent Radio-Canada TV appear- Suburban — the 905 belt — and in particular of suburban Canada ances by Jack Layton, a humdrum remained the best bet, with a few select- and the new industrial growth centres Gilles Duceppe campaign, a con- ed seats in Toronto and Montreal (tar- of Ontario. The once impregnable cities tentious televised Parti Québécois con- geting the Jewish vote), Atlantic like Windsor, London, Brampton, vention and a highly visible NDP Canada and BC. Hamilton and St. Catharines, federal Quebec voice, , Quebec Going into the campaign, the other Liberal fortresses since the Second voters decided to shift. And shift they parties had a ready-made strategy: keep World War, and the new high-growth did, in droves. The CROP poll gave the Harper from getting a majority. The (economic and population) areas, from NDP the first-place spot in Quebec. It NDP could hold at least its 37 seats and Waterloo and the region north of also gave Layton the same leadership pick up a few in Ontario and BC. The Toronto to Peterborough, were targeted attributes as the Prime Minister. Even Bloc could run its usual pro-Quebec as Conservative seats from the begin- though barroom chats were focused on mantra in mostly francophone ridings. ning. They joined western Canada, allo- the playoffs, water cooler conversation In one sense, the Liberals under Michael phones in Quebec and francophones entertained the possibility of the NDP Ignatieff had the least to lose, because within and outside Quebec by abandon- forming the official opposition in the chances of getting even a minority ing the Liberal Party, perhaps forever. and getting the keys to government were lessened by their weak In retrospect, the Conservative team . In addition, the “Jack fac- brand among francophones in Quebec, knew the real demographic numbers as

136 OPTIONS POLITIQUES JUIN-JUILLET 2011 Looking outward: A Conservative Canada in a new world order the Liberals did not, so a series of policies better known for his political calculus use the oil sands to disguise deep-rooted and initiatives, from unwavering sup- than for his government agenda. From anti-Americanism. port for Israel to a rigid law and order his limited days as a policy adviser to stance against smugglers bringing immi- Jim Hawkes, a MP, after the he new government’s policy agen- grants by boat to Canada, became the 1984 election, where he left little T da will be announced in the June 3 policy fodder at the level. Good imprint, Harper, being from , was Throne Speech and the budget re-intro- candidates, good organization appear- a fiscal hawk, a low-spending, tax-cut- duced in June. Most second-term presi- ances by selected cabinet ministers and ting conservative who was skeptical dents and most prime ministers stress the PM’s entourage (for TV and radio about big-ticket agenda items, which their international credentials, but publicity) produced a treasure trove of usually meant big spending, often today, with the global economy voter support in highly targeted seats, encroaching on provincial jurisdiction remaining in a precarious position including the Liberal core in Toronto. and spending priorities. because of high government debt, a The Conservatives were helped enor- The campaign promises leading up stalled Doha round in international mously and unwittingly on the last to his majority win in 2011 were never trade, aggressive economic and invest- weekend by the surge of the NDP, three- big, legacy-type policies like repatriating ment strategies in and middling way splits and selected media like the the Constitution or the Bill of Rights, results of the high-cost war in endorsing the NDP. medicare or free trade. Some policy Afghanistan, it might be argued that Much will be made of the foreign policy will be a high pol- new partnership between the Harper’s new majority coalition is icy priority, soaking up prime Conservatives in western Canada truly widespread, by geography, by ministerial time and travel. and Ontario, a dramatic postwar ethnic and language support, by the During the campaign, barely a shift from the traditional Quebec- new urban voters in the bigger word was mentioned about for- Ontario centre of gravity, where eign policy, US-Canada relations Ontario premiers played national cities, and, crucially, in the growth or even subsidiary issues like the statesmen on significant issues areas of Ontario and western government takeover of like medicare (John Robarts) and Canada, which will gain at least Chrysler and General Motors, a energy, bilingualism and consti- 28 new seats from redistribution. perimeter security shield, con- tutional policies (). tinuing cross-border security Commentators claim Brian Mul- Winning a majority without seats in and congestion (especially for roney changed this equation with Quebec — the subject of a trucks flowing south) or the his conservative coalition of Que- controversial memo to John implications for Canada-US bec nationalists and western Diefenbaker from his national trade of a Canada-EU free trade Canadian Conservatives, but peo- agreement. ple ignore the fact that both in director, James Johnston in 1958 — The biggest bilateral chal- 1984 and 1988, it was the large is now a mathematical certainty, lenge facing Canada with the US Conservative and minis- with implications for all parties. is the proposed Vision for ters from Ontario and Toronto — Perimeter Security and Economic Barbara MacDougall, , stances, climate change, for instance, Competitiveness. This initiative is a natu- Michael Wilson, , Flora Mac- were seen negatively at home and ral extension of cross-border free trade, Donald, , , abroad, but the Kyoto Accord was but with special two-way safeguards for and that led the viewed realistically as a real threat to his border security, environmental protection charge for free trade, deregulated energy conservative base in western Canada. A and close regulation of border crossings, accords, Pacific Rim trade and invest- succession of environment ministers including bridges, pipelines, railroads, ment initiatives, and privatization of prevaricated as much as they formulated power grids and highways. The most con- Crown corporations, including Petro- serious policy initiatives, even in a Green troversial spark could come from the pro- Canada, the central policy priorities Paper, consultation-style exercise. posed Keystone XL pipeline from sought by western Canada. Paradoxically, the oil and gas industry northern Alberta south to Texas, where moved ahead of the federal government, the community fully n the run-up to the 2011 election, and leading spokesmen like former understands the importance of the envi- I which Harper accepted only reluc- Alberta Peter Lougheed knew ronmental issues, which constrains tantly after a defeat in the House of well that the perception of “dirty Alberta Canadian political actions, and border Commons, but knowing he was better oil” could become a bilateral trade issue security, which constrain American bifur- prepared — financially, organizational- in the polarized (and often protectionist) cated support. Properly negotiated, this ly, and personally — for a national cam- US Congress, not helped by too many vision could be a huge winner for paign fight, his five years in office are Canadian environmentalists who could Canada. Judicious investments can

POLICY OPTIONS 137 JUNE-JULY 2011 position this country as the gateway for found dysfunctions of mobile financial party’s, for him to move on, and for a goods moving in and out of North capital and the challenges of social new generation of Conservative leaders America, using Canada’s better-situated issues like petty crime rates, drugs, high to strengthen the national base. and superior infrastructure, for containers school dropout rates, youth gangs and Reducing government spending is flowing through Vancouver and Prince illegitimacy. never easy, because each spending Rupert on the West Coast with CN rail The throne speech and June budget allotment has a constituency, and links to Chicago, Memphis and south to will mostly be a replay of the some will coincide with renegotiations the Gulf. US ports, highways and associat- Conservative agenda, including initia- of the health-education pact with the provinces and . Learning from Brian Mulroney, Prime Minister Harper and his However, after October, key advisers know that Ottawa’s international influence in the elections will be over in corridors of power and international bodies is tied directly to Quebec and Ontario, so a Canada’s smooth relationship with Washington. majority national govern- ment has time to pace its ed infrastructure face increasing gridlock tives in defence procurement, a law and key initiatives, some of which could as and congestion. order justice package, financial initia- a package become very controversial Learning from Brian Mulroney, tives (continued corporate tax cuts, (privatizing the Post Office, the Royal Prime Minister Harper and his key advis- expanded tax-free savings accounts) and Mint and the Wheat Board; a dramatic ers know that Ottawa’s international possible changes to Investment Canada, change in funding the CBC; changes influence in the corridors of power and created by the Mulroney government in in foreign , health care reforms, and international bodies is tied directly to 1985. On balance, the minority status of funding the research councils, with a Canada’s smooth relationship with the previous Harper administrations bias toward engineering and science). Washington, starting with the president prevented an activist policy agenda of The Harper government’s minority but also with key congressional leaders, engaging the Conservative Party, the status for five years was largely reactive, members of the cabinet and outside civil service and key interest groups. and many policies and spending were a advisors for both the Republicans and However, numerous issues now need to reaction to the 2008 Wall Street crash, the Democrats, including key border be addressed, including privatizing and the deep recession. The govern- governors and, increasingly, the US Crown corporations, changes in ment also had the advantage of the five- media. American competitiveness has telecommunications and copyright law, year pact signed by with the been waning, shown by the falling dol- a new national park on the Rouge River provinces, funding health care, educa- lar, in part because of the deterioration in Toronto, financial reform (including tion and Equalization. This agreement of key trade-related infrastructure — the full impact of a national securities expires in 2014, and funding increases roads, ports, railways, airports, pipelines, regulator and the proposed merger of at 6 percent a year. While Harper and power grids, an estimated $2.3 trillion the TSX with London’s exchange), and Finance Minister said the worth — and growing labour market dis- opening up protected industries by Conservatives would renew the 2004 connect, with 40 percent of births occur- removing foreign ownership restrictions Health Accord for two years at current ing outside of marriage and 70 percent of and regulatory measures that protected funding levels, this is obviously not sus- black children and Hispanics born to sin- managers with limits on a single acquir- tainable in a world where the govern- gle, unwed parents. ing firm. ment has promised to return to fiscal Rising inequality is often linked to Policy analysts and the business balance in 2014, a year earlier than the convoluted US tax system where, as community have their own checklist for expected. Fed Chairman Ben Bernanke has a focused, four-year agenda, but a highly Short-term economic challenges observed, the income in the top 20 per- revamped cabinet and new heads of and associated job creation, depicted in cent steadily increased, but the bottom House committees, plus a possible re- the much-hyped Economic Action Plan, fifth fell (the top 1 percent, or even top alignment of the senior bureaucracy, will can be sustained by job-ready stimulus 4 percent, is shocking by international take time. New ministers and a possible measures, infrastructure improvements, standards), but these issues are the summer reshuffle of key deputy ministers lowering the GST and government pro- symptoms of vast differences in college (possibly with some changes in the curement. Long-term competitiveness is education and in training for the poor machinery of government — strengthen- far more challenging, requiring long and disadvantaged, and severe middle- ing Treasury Board functions, for time horizons impacts on the dollar due class wage compression for lower- instance, and mandates for privatization) to commodity prices, federal and provin- skilled jobs. The underlying issue for all will allow more time, reflection and poli- cial debt levels and a bias toward invest- of is that rising inequal- cy deliberation over the four-year Harper ment over consumption, and novel ity of income leads to deterioration in term, possibly his last. After nine years in trade promotion and cleverly negotiated social capital and cohesion, with pro- office, it may be in his interest, and the bilateral trade agreements. Challenges

138 OPTIONS POLITIQUES JUIN-JUILLET 2011 Looking outward: A Conservative Canada in a new world order

Jason Ransom, PMO

Canadian Prime Minister Stephen Harper and US President Barak Obama in the Oval Office of the White House on February 4. Charles McMillan writes that managing bilateral relations, including the Canada-US border initiative, will be a priority for the new Conservative majority government. include making Canada’s Aboriginal lation countries are re-ordering trade and communications circus. Besides, the peoples part of this entrepreneurial investment flows globally, with enor- international arena, more volatile, more advantage, strengthening Canada’s posi- mous implications for Canadian jobs and connected and at times more dangerous, tion in the Arctic and the need to competition (e.g., ’s Embraer in may offer its own shock and awe discon- improve Canada’s R&D capacity. Canada aerospace, or ’s energy sector), but tinuities (uprisings in Saudi Arabia, polit- suffers from an innovation deficit, par- also because they have the possibilities for ical crisis in China, debt crisis in the US, ticularly in the private sector. In policy markets and job creation, and the stellar implosions in or ). terms, in a global world, Canada will do Canadian brand is a selling point. Few The new cabinet and Parliament well as an outward-looking, exporting Canadian firms — RIM is the dramatic itself will require nonideological policy nation selling high-value-added manu- exception — have truly global brands. agility at home and clever diplomacy facturing and services as well as leading abroad. The Harper agenda, in short, commodities with state-of-the-art tech- verall, it is unlikely that future pol- focusing mainly on economic competi- nology and supply chains. O icy directions will be a series of big- tiveness, will be on incremental issues. NAFTA remains the centrepiece of ticket signature items. The Prime But the cumulative impact will be dra- Canada’s economy. Other areas, includ- Minister revealed a lot when he suggest- matic over the five- and ten-year horizons ing the giant markets of ed Canadians now don’t like big surpris- making Canada more entrepreneurial, and the Middle East (with not only oil, es. The Prime Minister won’t face the more global and more agile to face the but massive sovereign wealth funds) offer problems of Prime Minister Mulroney, new multi-polar global order. huge opportunities for Canada. However, with his sweeping victory in 1984, when the BRIC countries (Brazil, Russia, the Ottawa Citizen led the national media Charles McMillan is professor of strategic and China) must become part of the new in a journalistic chorus of “We are now management and international business at policy equation in Ottawa and Canada at the opposition,” joined by the Liberal Rat . He served as senior policy large, not only because these high-popu- Pack that turned Question Period into a adviser to Prime Minister Brian Mulroney.

POLICY OPTIONS 139 JUNE-JULY 2011