For the third time since taking office in february 2006, Prime Minister Stephen Harper sat down with Policy Options editor L. Ian MacDonald.

OPTIONS POLITIQUES : Monsieur le Premier ministre, merci d’avoir accepté de nous rencontrer encore une fois, à l’occasion de votre deuxième anniversaire au pouvoir. Êtes-vous surpris, si je peux utiliser cette expression, de constater que votre gouvernement a survécu une autre année, que vous êtes toujours là ?

LE PREMIER MINISTRE STEPHEN HARPER : Je ne suis pas certain si cela me surprend ou non. Mais j’en suis certainement ravi, parce que mon objectif depuis le début est de gouverner le pays, et de le gouverner aussi longtemps que possible. Nous sommes ici depuis deux ans et au cours de cette période nous avons effectué une transformation. Nous avons commencé avec un programme en cinq priorités tiré de notre plate-forme électorale, qui visait des objectifs à plus ou moins court terme. Depuis nous avons transformé notre programme sur le plus long terme, de manière à répondre aux besoins de l’économie, de l’environnement et de la fédération mais également soutenir la souveraineté du pays, la participation du Canada dans le monde et lutter contre la criminalité. Je pense que pour moi, pour nous, c’est une bonne chose.

La question originale était « suis-je surpris » ? « Est-ce que je pense que ça peut continuer » ? Je n’en suis pas certain. La nature d’un gouvernement minoritaire dépend toujours des partis d’opposition et je ne contrôle pas leurs agendas.

OP : C’était la prochaine question justement, Monsieur le Premier ministre. Quels défis entrevoyez-vous pour 2008 ? Pensez-vous que les libéraux vont trouver le courage de renverser le gouvernement lors du vote sur le budget ?

STEPHEN HARPER : Je ne sais pas. Franchement, je ne sais pas. À plusieurs occasions, nous avons vu M. Dion menacer, s’engager à défaire le gouvernement, pour ensuite changer d’avis. À la fin de l’année passée, il a encore prédit la défaite du gouvernement sur le budget, au printemps. Maintenant, ce n’est plus si clair. Dans cette situation, la seule responsabilité d’un gouvernement est de gouverner. Cela dit, nous sommes prêts ” si l’opposition nous défaisait à un moment donné, nous serions prêts.

POLICY OPTIONS : If you’ve seen our year-end Policy Options poll, The Mood of Canada by Nick Nanos, the country is in a very good mood. Two-thirds of Canadians believe the country’s moving in the right direction. Canadians are optimistic about the economy and our role in the world and they give the government generally high marks on performance, but it doesn’t translate yet into voting intention. You seem to be still knocking up against a glass ceiling short of majority territory. What are your thoughts on that? There seems to be a bit of a disconnect between the two.

PRIME MINISTER STEPHEN HARPER : Well, I don’t know. We’ll see. I’ve been leader now of a national political party for almost six years, and I don’t think I’ve seen a poll that accurately predicted an election in that entire time, and I’d just like to remind you last fall when we had the Quebec by-elections, the results of those by-elections were completely different than the polling numbers were the weekend before. So we feel pretty good about things, but we’ll cross the bridge of what the people actually decide when we get to an election.

PO : How do you feel you’re connecting with the voters on a personal level ?

STEPHEN HARPER : That’s a hard one to measure. Across the country, I meet a lot of people. I can’t believe the number of places I go to in the country where I’m told I’m the first prime minister to ever visit, the first sitting prime minister to ever visit, so we meet a lot of people, we talk to a lot of people. I think it’s hard to communicate much about yourself through conventional media, but our own sense is that the Canadian people have a fair amount of confidence in the job that we’re doing here and a fair degree of trust, and we just have to keep making our best efforts to build on that reputation.


PO : In your television year-enders, you warned of the impending slowdown in the United States with their economy almost tipping into a recession. Would that argue for a spring election before it affects us here, and are you concerned about the jobs report you saw in January with the economy shedding 18 000 jobs, even though it added a record 377,000 through the whole year ?

STEPHEN HARPER : Well, first of all in terms of election timing, the government’s preference remains to govern, and to govern through to October 2009. We set an election date. We’ve been very clear and unequivocal on this since the day we were sworn into office, and I don’t see the government’s view changing on election timing. There are certain things we have to do as a government to run the country. Those are confidence measures. The opposition will have to make their decisions at the appropriate time whether they do or don’t want to support the government.

Look, it’s always hard to go on one month’s labour survey. We lost jobs, yet that wasn’t enough to raise the unemployment rate. It remained at 5.9 percent, which is the lowest level in 33 years. We’re bringing in a series of tax reductions, which will continue to kick in over the next five years. It will give us the lowest federal tax rate, the lowest federal tax take in 44 years, which I think will help sustain business confidence in our economy going forward. Yes, I said very clearly at the end of the year, we are concerned about uncertainty in the global and more specifically in the American economy. We don’t think Canada’s immune, but we do think Canada’s well positioned, and I said that primarily what we’ll be doing as a response to this is making sure we remain well positioned and don’t undertake any radical new tax or expenditure obligations on a long-term basis. We’ll continue to pay down debt and we’ll be cautious with public finances.

PO : And what about the dollar ? We know you never comment on exchange rates or try to talk down the dollar, but in light of its run last year, an appreciation from 85 cents to US$1.10 at one point, and with all that implies for managing margins in export-reliant economies such as ours, I wonder if even hypothetically any thought might be given to moving from a floating to a fixed exchange rate. Or even in the long term having some kind of discussion about a common North American currency, what some call the NAMU, a North American monetary union.

STEPHEN HARPER : Well, I think, if I can just address the last question first, I think there is a practical difficulty in having a common North American currency, and that is that a common North American currency would be in reality Canada adopting the US dollar. I don’t think there’s any real prospect of a common currency. It would inevitably be a single dominant currency, and I think for various reasons that’s not on. I also believe that in terms of global trade, a relatively small trading economy, there’s a lot to be said for having a floating currency, particularly when you want monetary policy to control inflation and interest rates. It’s difficult to do those things simultaneously if you start fixing your dollar. I think we will inevitably have an independent dollar. We will inevitably have a floating dollar, and I believe we will also inevitably have, if we look over the past year, a higher dollar. And I don’t mean higher than today, I mean a dollar that’s gone up in value. It will stay up because we have a relatively strong economy and there are all kinds of reasons why the value of the dollar would be going up. To the extent we may have had briefly last year an overvalued dollar, there’s nothing inevitable or necessary about an overvalued dollar, but I think we will have a strong dollar, an independent dollar and a floating currency. I think those things would be the case regardless of who was running the federal government.

PO : Concerning federal-provincial relations, you proposed in the Speech from the Throne to limit the federal spending power in areas of provincial jurisdiction in return for a stronger, a strengthened economic union, a stronger common market clause in section 121 of the Constitution. Is it fair to say that you’re philosophically a classical federalist, a division-of-powers guy, that Ottawa does what it does in section 91 and the provinces do what they do in section 92 ?

STEPHEN HARPER : I think that I would qualify that with a recognition that government in the 21st century works best when governments work together on shared objectives. But that said, I think nothing can replace governments also taking care of their own areas of responsibility.

As you know, a historic, a longstanding critique I’ve had of federal governments has been that they were really good at intervening and interfering in provincial jurisdiction, not real good at managing their own responsibilities: criminal justice, national security, national defence, international trade negotiations, national infrastructure. These were all things that under successive federal governments had not had a lot of attention, even though they were really good at bullying the provinces into starting or augmenting programs that were clearly in areas of provincial jurisdiction. So one of our first responsibilities has been to fund properly and to have clear policy direction in core areas of federal responsibility. It’s one of the things our government’s been trying to do, from trade to security to national defence and infrastructure and the rest. At the same time, I think we are a government that as a matter of course has respected provincial jurisdiction. We don’t intervene in provincial jurisdiction. We certainly don’t intervene in provincial jurisdiction without a high level of cooperation with the provinces.

The Speech from the Throne ” I don’t see it as a trade-off. I think that’s a policy that needs to be continued and, to the extent we can do it, institutionalized. At the same time, I do think we need to have a stronger economic union. So I don’t see it as a trade-off. I think they’re both objectives and both things we’re going to want to take action on in the future.

PO: In terms of ”œopen federalism,” as you called it in your famous Quebec City speech of December 2005, so far there’s been only one real meeting with the premiers, other than a short one in February 2006, and this was in early January, a three-and-a-half-hour working dinner at 24 Sussex, and clearly there wasn’t time to get into any of this philosophical stuff, and some of the provinces were complaining about the format and that the federal rescue package was imposed unilaterally without consultation. So what are your thoughts on that ?

STEPHEN HARPER : Well, in terms of the support for vulnerable communities and the Community Development Trust, I mean, the triggering of that money requires agreements with all the provinces and territories, and we’re in the process. First of all, we responded to demands specifically for that kind of support, and it is proceeding only through the participation of provinces.

The program can’t proceed otherwise. Part of it is because, for various reasons, we want to spend the money in this fiscal year when we have a surplus and we require trust agreements with the provinces to release the money. So that’s what we’re doing. In terms of meetings with the provinces, I’ve had two multilateral meetings in the two years, but look, we also have ongoing meetings with all the premiers on a regular basis. And frankly, I think for the most part we’re not always going to agree. For the most part we’ve had productive relations with the provinces. We always have provinces where provincial interests are different than the national interest and there are premiers who will have a different philosophy of government than the federal government, but I think for the most part, we’ve had pretty productive relationships with the provinces, and the provinces certainly are coming out of their experience with this federal government with a lot stronger balance sheet. I think now with our ”œréglement du déséquilibre fiscal” as we call it, with the resolution of the fiscal balance question ” fiscal imbalance question ” I think the provinces collectively have stronger balance sheets than the federal government now.

OP : J’aimerais vous entendre en ce qui concerne votre relation avec Jean Charest. Pendant votre première année au pouvoir, vous avez entretenu une relation spéciale avec lui. Vous aviez une rencontre et une annonce après l’autre, au point où ça ne faisait pas l’affaire de certains autres premiers ministres provinciaux. Mais depuis l’élection québécoise, alors que M. Charest a été réduit au statut de gouvernement minoritaire, et surtout après la façon dont il a distribué les 700 millions $ transférés d’Ottawa pour le déséquilibre fiscal, il semble que cette relation se soit refroidie ?

STEPHEN HARPER : Je suis convaincu que les intérêts de toutes les provinces sont bien servis par de bonnes relations entre le fédéral et le gouvernement provincial. Il n’y a pas toujours des premiers ministres ou des cultures politiques provinciales qui appuient cette analyse, et je suis convaincu que c’est la meilleure chose. Je pense qu’une situation minoritaire à l’Assemblée nationale n’est pas facile pour n’importe quel premier ministre du Québec en ce qui concerne ses relations avec Ottawa, et c’est présentement la situation dans laquelle nous nous trouvons. En même temps, je pense que le pays est bien servi quand un bon fédéraliste est premier ministre du Québec.

OP : Mais les libéraux provinciaux du Québec n’étaient évidemment pas très contents que vous partagiez une estrade avec Mario Dumont, chef de l’opposition à Québec, à Rivière-du-Loup juste avant Noël, alors qu’il avait connu une très mauvaise session à l’Assemblée nationale. M. Dumont, pour sa part, a déclaré que s’il était porté au pouvoir, il exigerait plus d’autonomie pour le Québec. Pouvez-vous nous dire l’état de votre relation avec M. Dumont ?

STEPHEN HARPER : Je peux seulement dire que je connais M. Dumont depuis longtemps. Il a appuyé le Parti conservateur fédéral lors des deux élections fédérales de 2004 et de 2006. Mais la réalité politique est que le Parti conservateur fédéral est un mélange de tendances, trouvant des appuis tant dans le Parti libéral du Québec que dans l’Action démocratique. Ça, c’est la réalité. Nous devons continuer d’entretenir de bonnes relations avec ces deux camps. En même temps, comme je viens de dire, le pays est bien servi par un premier ministre du Québec qui appui fortement l’unité du Canada.

OP : L’environnement est sûrement un enjeu sur lequel Ottawa et Québec ne sont pas tout à fait d’accord, sur les objectifs de Kyoto par exemple. Est-il juste de dire que le Canada appartient toujours à la famille Kyoto, mais que Kyoto lui-même est mort et qu’on cherche un consensus post-Kyoto ?

STEPHEN HARPER : Le Canada fait partie de Kyoto depuis presque le tout début, mais la décision à cet effet a été prise par l’ancien gouvernement. Ils ne l’ont pas dit, mais ils ont décidé de ne pas respecter les engagements de Kyoto. Je peux dire ça parce que quand nous sommes arrivés au pouvoir, le Canada émettait déjà 35 p. 100 plus d’émissions que les cibles visées dans le protocole de Kyoto. Et ça c’est la réalité de ce gouvernement. Nous avons dit deux choses : que nous allions continuer de travailler dans le protocole de Kyoto et dans le processus international pour arriver à un nouveau protocole pour la période après 2012 ; que nous allions établir des cibles obligatoires nationales dans ce pays. Et nous avons faits les deux choses. Nous l’avons déclaré clairement, très clairement dans le discours du Trône, et le Parlement a appuyé notre approche.

PO : You have been trying in the G8 and APEC and the Commonwealth and at Bali and other places to promote a post-Kyoto framework whereby emissions would be reduced, the so-called 20/20 and 50/50 targets, at least 20 percent below current levels by 2020 and at least 50 percent by 2050. How do you think you’re doing, with our partners, in moving this along ? How attainable do your scientists tell you that these objectives are scientifically, and how are they tenable politically in terms of a new product in the marketplace ?

STEPHEN HARPER : Well, first of all, I would just say post-Bali, the world is a very long way from accepting the need for binding international targets that are effective. In fact, I would categorize the general tenor of the Bali discussions as being that targets are really important for everybody else. That was kind of the position virtually everybody had at Kyoto. You know, we are trying to lead by setting our own targets.

There are other countries that are trying to do the same thing, and I think it’s important we all make contributions, but we are a long way from having a protocol internationally that would reduce targets. The Kyoto Protocol : one of its grave weaknesses is it only regulated a third of world emissions. At the rate we’re going with the Bali discussions, the next protocol may only have — if we don’t have China and India and others in — may have targets that cover 20 percent or less of world emissions. So we’re a long way from having an effective global target. We’ve got to keep pushing our view forcefully, and I think we’ve got to keep having our own targets and actually meeting some of those targets. You know, I’ve often joked that ” and it’s maybe a little bit unfair ” but that Kyoto consisted of two countries, those countries that didn’t have targets and those countries that wouldn’t meet the targets. We’ve got to establish ” if we’re going to be a leader ” we have to establish targets and actually meet those targets.

PO : On foreign policy, which has again been a dominant frame in 2007 and going forward: first of all, in Afghanistan as we speak in mid-January, you’re two weeks away from receiving Mr. Manley’s recommendations of his eminent panel. But without anticipating that, how do you see the progress in the mission going forward and the difficulties ?

STEPHEN HARPER : Well, it’s a challenging mission. Afghanistan is a country that has no democratic tradition. It’s a country that has very little tradition of unity or stability. It’s coming out of 30 years of intense civil war of various kinds that has led to one of the poorest economies on earth where virtually all educated people have left. So we don’t talk about rebuilding Afghanistan. It’s a question of building : building its economy, building its governments, building its democracy and doing so from nothing.

I think the international community, notwithstanding all kinds of problems in the structure of the United Nations effort, the international community has made some remarkable progress in six years. That said, we’re making progress from zero, and there’s a long, long way to go before Afghanistan is the kind of society and kind of country that not only will enjoy even a small part of some of the benefits we enjoy and some of the advanced governments we enjoy, but a while before it’s a country that isn’t vulnerable to extremist elements and to falling back into the status of a fragile state. So we’ve got our work cut out for us.

We understand this. I think the previous government understood that pretty clearly when they made a commitment to Afghanistan and to Kandahar originally. I just hope that going forward, the country will take a position that protects our long-term interests and obligations in terms of rebuilding and in terms of building Afghanistan up, that sustains our international reputation, that honours the sacrifice and commitment that our soldiers and other public servants have shown to that cause.

PO : On the Middle East, on Israel, the West Bank and the settlements and so forth: President Bush has called on Israel to freeze settlements and withdraw to the 1967 boundaries. What are your thoughts on that and the prospects for peace in the region ?

STEPHEN HARPER : I think this government’s been very clear that further settlement activity is not helpful to the process of peace. And you know, without going into details: I think that the framework of a settlement between Israel and the Palestinians, the broad outlines of that have been clear to a lot of people for quite some time. I won’t get into the elements of that. You’ve mentioned some of them in your question. The real question will be whether the international community, led by the United States, wants to put the resources into that to drive that to a solution. Not just the United States, but also with the participation of Arab states as well, whether everybody wants to drive that to a solution, and then ultimately whether we have leaders on the Palestinian and Israeli side who can and who desire, who can and who will make that solution take hold. I’ve spoken in the recent weeks to both Prime Minister Olmert and President Abbas. I believe they both want peace. I believe they both understand the compromises that ultimately have to be made. I’m convinced that important players in the international community do want this thing to be resolved, but you know, there’s a lot of hard work ahead for that to happen.

PO : It’s a fascinating election year in the United States, the most interesting campaign in generations, probably, since the Kennedy-Nixon campaign in 1960. And certainly Senator Obama is a guy who changes the paradigm and a very powerful campaigner. I wonder if you have any longer-term concerns post the election about maintaining our economic interests and our trading relations with the US, because some of the Democrats, particularly Senator Clinton, are talking about reopening the NAFTA.

STEPHEN HARPER : Well, let me just say a couple of things. First of all, yeah, it is a fascinating election, and I would probably other than that never say anything on the public record about any of the candidates of either party.

PO : Except for polls being wrong, as they were spectacularly in New Hampshire.

STEPHEN HARPER : Polls are always wrong. The Republican one wasn’t actually that close either, even though it had the order right. Polls are always wrong, whether they’re good or bad. But I think I do believe, first of all, it’s important for any prime minister of Canada, regardless of party, to establish a good and constructive working relationship with the president of the United States, whatever party. And I just think that’s really critical to Canadians’ best interests. And so we will be prepared to work with whoever’s there, to advance our interests and our mutual interests and ultimately the interests of the planet.

We are also as a government ” and obviously our officials are keeping a very close eye on everything that potential presidents are saying to try and calibrate how those may or may not serve our interests and how, if we see a direction coming from a presidential candidate, how we can position ourselves to ultimately bring greater wisdom and clarity to any of those judgments in the future. Now, that all said, we are concerned about the direction in the United States that we have seen for some time now, and I’m not pointing at the current administration or anybody. I’m just saying it’s a reality. Realities we have seen are really falling into two categories. One is a trade-security axis, and the other would be an environment-energy axis.

On the trade and security axis, we see an increasing thickening of the border for security reasons or justified by security criteria, sometimes, not always, disguising protectionist sentiment that we think is very worrisome ” and we think, by the way, a view that’s shared by the American business community, that we think serves the interests of neither country particularly well. And so we are concerned about that. We have worked as closely as we can with the current administration to resist that and change that direction, but we’re obviously looking for an opportunity for a fresh start with a new administration. Likewise on energy and the environment, we are the largest energy provider to the United States. At the same time, as we’ve discussed earlier, Canada has been a signatory to Kyoto and is a firm participant in global efforts to reduce greenhouse gas emissions. Those efforts are undermined by an energy partner that doesn’t have targets and hasn’t seen it as a priority. And so on that axis as well, we would hope to make greater progress with a new administration, regardless of personality or party.

PO : And finally, after two years in this job, what do you like about it, what are you learning about it, and what is the hardest part of it ? I’m told that for you the hardest part is calling the families of servicemen and women who’ve lost their lives.

STEPHEN HARPER : Yeah, that is the hardest part. You know, it’s never a good day here when we hear of the loss of a young man or young woman in uniform. It is never a good day, regardless of the circumstances. These are our most committed citizens, people full of energy and idealism who believe in what they’re doing and are prepared to commit everything for it. You can’t replace that. That’s always tough when that happens.

In terms of what I like about it, I always tell people what I like best about it. They say what’s the best thing about being prime minister ? I say, ”Running the country.” It’s always the obvious. I enjoy governing. I have a great staff. I have a great cabinet. I have a great caucus. I have a great party apparatus. I have a great senior bureaucracy, all of which helps do that. And it’s a hell of a lot of pressure and a hell of a lot of strain on time and family life, but I really enjoy it. Every day I come in to work, and I think I live in the best country in the world, and I’ve got the best job in the best country in the world. It’s not going to get much better than this.

So you know, I don’t know how long all this will last, but I say that we’ll make the best of it while we’re here, enjoy it as much as we can. My definition of enjoying something probably involves more work than most people’s definition of having fun, but we’ll enjoy it while we can and get as much done as we can. In terms of what I’m learning, what can I say ? I think it’s a constant struggle to manage time and manage stress. Those are probably the biggest challenges. And when I say ”œmanaging time,” that involves obviously the managing of people and a whole bunch of other things. I’m not sure you ever perfect that in this job. I’m not sure you ever look back over a day and say, ”Geez, I wish I’d spend some time this way and not that way,” but you do your best. You know, it’s always a work in progress.