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.
Every generation, the politics of Canada faces a sea change in the electoral map. Just before the Charlottetown Conference of 1864, John A. Macdonald and George-Étienne Cartier developed a new political alliance between Canada East and John A.’s Tories in Canada West, and that pact brought them government power for a generation. Wilfrid Laurier broke the back of the Conservatives in his electoral victory of 1896, setting the Liberal Party as the true governing party for the 20th century, one of the most successful political machines in the democratic world. Despite ups and downs, Mackenzie King continued Laurier’s coalition of francophones and strong regional ministers in each region, the pattern of every Liberal prime minister from St-Laurent and Trudeau to Chrétien and Martin, helped hugely by alternating francophone and anglophone leaders.
John Diefenbaker’s election sweep in 1958 was in some respects always ill-fated, leaving the Conservatives with a western-based rump when the Tories left office in 1963. Brian Mulroney broke the Liberal stranglehold in 1984, not only gaining a huge national majority of 211 seats in what was then a 282-seat House, but legitimizing Conservative candidates in the 110 ridings with francophone pluralities, helped in part because many francophone voters thought he was a francophone.
Now Stephen Harper, cleverly uniting the fractious conservative forces in the Reform and Canadian Alliance parties with the remnants of the Progressive Conservative Party, and surviving five years of a minority government, against three opposition parties, has gained uniquely a national majority with seats in every province. He has now decimated the Liberals in their two electoral fortresses, Ontario and Quebec, and they have virtually no support in western Canada, a cruel legacy of Trudeau’s National Energy Program. In the only area where his electoral fortunes are low, the province of Quebec, Harper has the chance to build a new Conservative base from scratch, without relying on any machine “borrowed” from other parties, Mario Dumont’s ADQ, the provincial Liberal Party, or a few stray Créditistes, nationalistes or independent voters in certain ridings, including disgruntled federal Liberals.
The “Jack factor” seemed to be in play in key ridings in Ontario and British Columbia. The ordinary had become potentially extraordinary. As pundits know, a week is a long time in politics, as more than 2.5 million Canadians shifted their voter allegiance toward the Conservative and NDP candidates.
In short, Harper’s new majority coalition is truly widespread, by geography, by ethnic and language support, among the new urban voters in the bigger cities, and, crucially, in the growth areas of Ontario and western Canada, which will gain at least 28 new seats from redistribution. Winning a majority without seats in Quebec — the subject of a controversial memo to John Diefenbaker from his national director, James Johnston in 1958 — is now a mathematical certainty, with implications for all parties.
Facing the last 14 days of the election, Canadians seemed set to return another minority Harper government. The Prime Minister had kept to a simple script — a stable majority government instead of parliamentary coalition uncertainty and a jobs-oriented growth plan rather than tax- and-spend opposition platforms. Then, like a bolt out of the blue — noting two respectable national debates, excellent Radio-Canada TV appearances by Jack Layton, a humdrum Gilles Duceppe campaign, a contentious televised Parti Québécois convention and a highly visible NDP Quebec voice, Tom Mulcair, Quebec voters decided to shift. And shift they did, in droves. The CROP poll gave the NDP the first-place spot in Quebec. It also gave Layton the same leadership attributes as the Prime Minister. Even though barroom chats were focused on the playoffs, water cooler conversation entertained the possibility of the NDP forming the official opposition in Ottawa and getting the keys to Stornoway. In addition, the “Jack factor” seemed to be in play in key ridings in Ontario and British Columbia. The ordinary had become potentially extraordinary. As pundits know, a week is a long time in politics, as more than 2.5 million Canadians shifted their voter allegiance toward the Conservative and NDP candidates.
Federal elections are sometimes decided in the final days. Armchair predictions ranged from a 1984 Brian Mulroney-style blowout (never likely, even if the Liberals collapsed to a Kim Campbell result), with Stephen Harper getting 200-plus seats, to a 1990 Bob Rae NDP shocker with Jack Layton leading a minority government, a prediction made by Craig Oliver of CTV. The Conservatives kept to their game plan and the Prime Minister kept his cool, despite some adverse poll numbers, knowing the reinforcement effect of their massive TV and radio advertising would help close the deal. From the beginning, they ran less a truly national campaign than one highly focused on about 30 targeted seats, hoping to retain their 142 seats but pick up another 15 to 20 to give them a comfortable but hardly overwhelming majority. Suburban Toronto — the 905 belt — remained the best bet, with a few selected seats in Toronto and Montreal (targeting the Jewish vote), Atlantic Canada and BC.
Going into the campaign, the other parties had a ready-made strategy: keep Harper from getting a majority. The NDP could hold at least its 37 seats and pick up a few in Ontario and BC. The Bloc could run its usual pro-Quebec mantra in mostly francophone ridings. In one sense, the Liberals under Michael Ignatieff had the least to lose, because the chances of getting even a minority government were lessened by their weak brand among francophones in Quebec, the legacy of the sponsorship scandal, and continuing low standing in western Canada. While holding incumbent ridings in Ontario, the island of Montreal and their core seats in Atlantic Canada, the Liberals hoped to make gains in BC, the Quebec City region and selected ridings in Ontario, helped by the provincial Liberals.
But the NDP surge had changed these calculations, especially with so many three-way fights and fears of a low turnout, which tends to favour incumbents. Political reality is often in short supply in political war rooms. For the NDP, the bad news may be that the chance to pick up Bloc seats in Quebec will provide the Conservative government with wedge issues against their members outside Quebec. To most Canadians, the good news is that the Bloc’s support is coming to an end, remaining only as a political redoubt for old-line Parizeau separatists.
The Prime Minister and his Conservative organizers — a combination of western Reformers and Canadian Alliance street fighters, Mike Harris operatives from Ontario and a select group of senators and constituency staff from the Mulroney era — forged a formidable all-season election team, combining the ruthless intensity of a Lee Atwater-style desire to win with a Karl Rove-style understanding of the changing political demographics of Canada and in particular of suburban Canada and the new industrial growth centres of Ontario. The once impregnable cities like Windsor, London, Brampton, Hamilton and St. Catharines, federal Liberal fortresses since the Second World War, and the new high-growth (economic and population) areas, from Waterloo and the region north of Toronto to Peterborough, were targeted as Conservative seats from the beginning. They joined western Canada, allophones in Quebec and francophones within and outside Quebec by abandoning the Liberal Party, perhaps forever.
In retrospect, the Conservative team knew the real demographic numbers as the Liberals did not, so a series of policies and initiatives, from unwavering support for Israel to a rigid law and order stance against smugglers bringing immigrants by boat to Canada, became the policy fodder at the riding level. Good candidates, good organization appearances by selected cabinet ministers and the PM’s entourage (for TV and radio publicity) produced a treasure trove of voter support in highly targeted seats, including the Liberal core in Toronto. The Conservatives were helped enormously and unwittingly on the last weekend by the surge of the NDP, threeway splits and selected media like the Toronto Star endorsing the NDP.
Much will be made of the new partnership between the Conservatives in western Canada and Ontario, a dramatic postwar shift from the traditional QuebecOntario centre of gravity, where Ontario premiers played national statesmen on significant issues like medicare (John Robarts) and energy, bilingualism and constitutional policies (Bill Davis). Commentators claim Brian Mulroney changed this equation with his conservative coalition of Quebec nationalists and western Canadian Conservatives, but people ignore the fact that both in 1984 and 1988, it was the large Conservative caucus and ministers from Ontario and Toronto — Barbara MacDougall, David Crombie, Michael Wilson, Tom Hockin, Flora MacDonald, James Kelleher, Perrin Beatty, Doug Lewis and Paul Dick that led the charge for free trade, deregulated energy accords, Pacific Rim trade and investment initiatives, and privatization of Crown corporations, including PetroCanada, the central policy priorities sought by western Canada.
In the run-up to the 2011 election, which Harper accepted only reluctantly after a defeat in the House of Commons, but knowing he was better prepared — financially, organizationally, and personally — for a national campaign fight, his five years in office are better known for his political calculus than for his government agenda. From his limited days as a policy adviser to Jim Hawkes, a Calgary MP, after the 1984 election, where he left little imprint, Harper, being from Alberta, was a fiscal hawk, a low-spending, tax-cutting conservative who was skeptical about big-ticket agenda items, which usually meant big spending, often encroaching on provincial jurisdiction and spending priorities.
The campaign promises leading up to his majority win in 2011 were never big, legacy-type policies like repatriating the Constitution or the Bill of Rights, medicare or free trade. Some policy stances, climate change, for instance, were seen negatively at home and abroad, but the Kyoto Accord was viewed realistically as a real threat to his conservative base in western Canada. A succession of environment ministers prevaricated as much as they formulated serious policy initiatives, even in a Green Paper, consultation-style exercise. Paradoxically, the oil and gas industry moved ahead of the federal government, and leading spokesmen like former Alberta Premier Peter Lougheed knew well that the perception of “dirty Alberta oil” could become a bilateral trade issue in the polarized (and often protectionist) US Congress, not helped by too many Canadian environmentalists who could use the oil sands to disguise deep-rooted anti-Americanism.
The new government’s policy agenda will be announced in the June 3 Throne Speech and the budget re-introduced in June. Most second-term presidents and most prime ministers stress their international credentials, but today, with the global economy remaining in a precarious position because of high government debt, a stalled Doha round in international trade, aggressive economic and investment strategies in China and middling results of the high-cost war in Afghanistan, it might be argued that foreign policy will be a high policy priority, soaking up prime ministerial time and travel. During the campaign, barely a word was mentioned about foreign policy, US-Canada relations or even subsidiary issues like the government takeover of Chrysler and General Motors, a perimeter security shield, continuing cross-border security and congestion (especially for trucks flowing south) or the implications for Canada-US trade of a Canada-EU free trade agreement.
Harper’s new majority coalition is truly widespread, by geography, by ethnic and language support, by the new urban voters in the bigger cities, and, crucially, in the growth areas of Ontario and western Canada, which will gain at least 28 new seats from redistribution. Winning a majority without seats in Quebec — the subject of a controversial memo to John Diefenbaker from his national director, James Johnston in 1958 — is now a mathematical certainty, with implications for all parties.
The biggest bilateral challenge facing Canada with the US is the proposed Vision for Perimeter Security and Economic Competitiveness. This initiative is a natural extension of cross-border free trade, but with special two-way safeguards for border security, environmental protection and close regulation of border crossings, including bridges, pipelines, railroads, power grids and highways. The most controversial spark could come from the proposed Keystone XL pipeline from northern Alberta south to Texas, where the Canadian business community fully understands the importance of the environmental issues, which constrains Canadian political actions, and border security, which constrain American bifurcated support. Properly negotiated, this vision could be a huge winner for Canada. Judicious investments can position this country as the gateway for goods moving in and out of North America, using Canada’s better-situated and superior infrastructure, for containers flowing through Vancouver and Prince Rupert on the West Coast with CN rail links to Chicago, Memphis and south to the Gulf. US ports, highways and associated infrastructure face increasing gridlock and congestion.
Learning from Brian Mulroney, Prime Minister Harper and his key advisers know that Ottawa’s international influence in the corridors of power and international bodies is tied directly to Canada’s smooth relationship with Washington, starting with the president but also with key congressional leaders, members of the cabinet and outside advisors for both the Republicans and the Democrats, including key border governors and, increasingly, the US media. American competitiveness has been waning, shown by the falling dollar, in part because of the deterioration of key trade-related infrastructure — roads, ports, railways, airports, pipelines, power grids, an estimated $2.3 trillion worth — and growing labour market disconnect, with 40 percent of births occuring outside of marriage and 70 percent of black children and Hispanics born to single, unwed parents.
Rising inequality is often linked to the convoluted US tax system where, as Fed Chairman Ben Bernanke has observed, the income in the top 20 percent steadily increased, but the bottom fifth fell (the top 1 percent, or even top 4 percent, is shocking by international standards), but these issues are the symptoms of vast differences in college education and in training for the poor and disadvantaged, and severe middleclass wage compression for lower-skilled jobs. The underlying issue for all of North America is that rising inequality of income leads to deterioration in social capital and cohesion, with profound dysfunctions of mobile financial capital and the challenges of social issues like petty crime rates, drugs, high school dropout rates, youth gangs and illegitimacy.
The throne speech and June budget will mostly be a replay of the Conservative agenda, including initiatives in defence procurement, a law and order justice package, financial initiatives (continued corporate tax cuts, expanded tax-free savings accounts) and possible changes to Investment Canada, created by the Mulroney government in 1985. On balance, the minority status of the previous Harper administrations prevented an activist policy agenda of engaging the Conservative Party, the civil service and key interest groups. However, numerous issues now need to be addressed, including privatizing Crown corporations, changes in telecommunications and copyright law, a new national park on the Rouge River in Toronto, financial reform (including the full impact of a national securities regulator and the proposed merger of the TSX with London’s exchange), and opening up protected industries by removing foreign ownership restrictions and regulatory measures that protected managers with limits on a single acquiring firm.
Policy analysts and the business community have their own checklist for a focused, four-year agenda, but a highly revamped cabinet and new heads of House committees, plus a possible realignment of the senior bureaucracy, will take time. New ministers and a possible summer reshuffle of key deputy ministers (possibly with some changes in the machinery of government — strengthening Treasury Board functions, for instance, and mandates for privatization) will allow more time, reflection and policy deliberation over the four-year Harper term, possibly his last. After nine years in office, it may be in his interest, and the party’s, for him to move on, and for a new generation of Conservative leaders to strengthen the national base.
Learning from Brian Mulroney, Prime Minister Harper and his key advisers know that Ottawa’s international influence in the corridors of power and international bodies is tied directly to Canada’s smooth relationship with Washington.
Reducing government spending is never easy, because each spending allotment has a constituency, and some will coincide with renegotiations of the health-education pact with the provinces and territories. However, after October, elections will be over in Quebec and Ontario, so a majority national government has time to pace its key initiatives, some of which could as a package become very controversial (privatizing the Post Office, the Royal Mint and the Wheat Board; a dramatic change in funding the CBC; changes in foreign aid, health care reforms, and funding the research councils, with a bias toward engineering and science).
The Harper government’s minority status for five years was largely reactive, and many policies and spending were a reaction to the 2008 Wall Street crash, and the deep recession. The government also had the advantage of the fiveyear pact signed by Paul Martin with the provinces, funding health care, education and Equalization. This agreement expires in 2014, and funding increases at 6 percent a year. While Harper and Finance Minister Jim Flaherty said the Conservatives would renew the 2004 Health Accord for two years at current funding levels, this is obviously not sustainable in a world where the government has promised to return to fiscal balance in 2014, a year earlier than expected.
Short-term economic challenges and associated job creation, depicted in the much-hyped Economic Action Plan, can be sustained by job-ready stimulus measures, infrastructure improvements, lowering the GST and government procurement. Long-term competitiveness is far more challenging, requiring long time horizons impacts on the dollar due to commodity prices, federal and provincial debt levels and a bias toward investment over consumption, and novel trade promotion and cleverly negotiated bilateral trade agreements. Challenges include making Canada’s Aboriginal peoples part of this entrepreneurial advantage, strengthening Canada’s position in the Arctic and the need to improve Canada’s R&D capacity. Canada suffers from an innovation deficit, particularly in the private sector. 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.
NAFTA remains the centrepiece of Canada’s economy. Other areas, including the giant markets of South America and the Middle East (with not only oil, but massive sovereign wealth funds) offer huge opportunities for Canada. However, the BRIC countries (Brazil, Russia, India and China) must become part of the new policy equation in Ottawa and Canada at large, not only because these high-population countries are re-ordering trade and investment flows globally, with enormous implications for Canadian jobs and competition (e.g., Brazil’s Embraer in aerospace, or Russia’s energy sector), but also because they have the possibilities for markets and job creation, and the stellar Canadian brand is a selling point. Few Canadian firms — RIM is the dramatic exception — have truly global brands.
Overall, it is unlikely that future policy directions will be a series of bigticket signature items. The Prime Minister revealed a lot when he suggested Canadians now don’t like big surprises. The Prime Minister won’t face the problems of Prime Minister Mulroney, with his sweeping victory in 1984, when the Ottawa Citizen led the national media in a journalistic chorus of “We are now the opposition,” joined by the Liberal Rat Pack that turned Question Period into a communications circus. Besides, the international arena, more volatile, more connected and at times more dangerous, may offer its own shock and awe discontinuities (uprisings in Saudi Arabia, political crisis in China, debt crisis in the US, implosions in Mexico or Venezuela).
The new cabinet and Parliament itself will require nonideological policy agility at home and clever diplomacy abroad. The Harper agenda, in short, focusing mainly on economic competitiveness, will be on incremental issues. But the cumulative impact will be dramatic over the five- and ten-year horizons making Canada more entrepreneurial, more global and more agile to face the new multi-polar global order.