US embassy cable - 05OTTAWA999

UNCLAS SECTION 01 OF 03 OTTAWA 000999 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: CA, PREL, PGOV, Gomery Inquiry 
SUBJECT: CANADA: COULD GOMERY REVELATIONS TRIGGER AN 
ELECTION? 
 
 
1. (SBU) Summary:  The possibility of early elections has 
always been in the background for this minority government, 
but the revelations coming out of the Gomery inquiry over the 
past several days have moved that possibility to the 
foreground.  Testimony by ad executive Jean Brault, which 
remains under a publication ban but leaked out through a US 
website, was characterized by Deputy Conservative Leader 
Peter MacKay as something that, if verified, could &blow the 
doors right off this government.8  It is still anything but 
clear how this will all play out but there are huge equities 
involved -- for all the parties, for party leaders, and for 
the future of Quebec and separatism.  All parties are 
rattling sabers, but they are still sheathed sabers at this 
point. 
 
2. (SBU) If the testimony is as bad as has been described, 
however, and if the Liberals are not successful in their 
continuing campaign of damage control, it could get to the 
point where the Conservatives would no longer be punished for 
calling an election, and might well be dismissed as impotent 
for not doing so.  Timing will be everything, and the key 
piece of timing will be when the testimony is revealed.  This 
could be as early as this week if the Brault criminal trial 
is pushed back to the fall, or later in the year when the 
Gomery findings are published.  The sure winner in all this 
is the separatist Bloc Quebecois, with the Liberals a sure 
loser.  What is not clear is whether the Conservatives can 
get their act together to reap the spoils.  End Summary 
 
ELECTION RUMBLINGS GROW 
---------------------- 
 
3. (U) For the second time in 10 days there are rumblings of 
elections, with prominent Conservative MPs returning to their 
ridings to take soundings from constituents and one MP saying 
he was returning this week to prepare for an election.  The 
Conservative Party has renewed an order for ridings to secure 
candidates in case Canada goes to the polls, an order that 
was originally issued in December but was largely ignored 
because the likelihood of an election was assumed to be so 
low. 
 
4. (U) The first talk of a snap election occurred the week of 
March 28 and was triggered by the government,s handling of 
the omnibus budget implementation bill, to which the Liberals 
had appended changes to the Canadian Environmental Protection 
Act.  These changes were not included in February,s budget 
documentation.  The Conservatives claimed that the removal of 
the word &toxic8 from the act and the inclusion of 
&greenhouse gas emissions8 on the list of controlled 
substances would have over-taxed Canadian industry and driven 
up consumer costs.  Conservatives indicated that they wanted 
the bill broken up into three parts: the budget itself, the 
Kyoto-related measure to amend the Environmental Protection 
Act, and implementation of the Atlantic Accord on off-shore 
oil revenue. 
 
5. (U) Some observers believe that Conservative Leader Harper 
was merely flexing his muscles to regain some control over 
the details of the budget, after being forced to go along 
with the budget vote or risk an election in February.  He 
threatened that the Conservatives might vote the bill down, 
even if it meant a snap election.  But neither Harper nor 
Martin wanted an election, and both sides blinked -- Harper 
by scaling back his threat and seeking a compromise, and 
Martin by allowing the Environment Minister to indicate that 
the environmental provisions could indeed be made into 
separate legislation.  By week,s end the issue was defused. 
 
GOMERY INQUIRY TESTIMONY &EXPLOSIVE8 
------------------------------------ 
 
6. (SBU) But the question of early elections came back with a 
vengeance on April 4, when new revelations from the Gomery 
inquiry began to leak out.  Jean Brault, the former president 
of the ad agency Groupaction, began his testimony on the role 
his organization played in the Adscam scandal, in which 
millions of dollars in government funds intended to shore up 
support for federalism in Quebec were siphoned off to Liberal 
supporters.  Details of the scandal were seedy enough to all 
Canadians, and insulting enough to Quebecers -- who saw a 
federal government trying to buy their loyalty -- that the 
Liberals were knocked down to minority status and almost lost 
the 2004 election.  But the details were always sketchy 
enough to provide a measure of impunity for the Liberals, or 
at least a way to avoid full and direct indictment of the 
party. 
 
7. (SBU) Brault,s testimony appears ready to change that, as 
one conservative told a National Post reporter, &before we 
knew money was stolen, now we know by whom.8  Because Brault 
is up for criminal indictment, Justice John Gomery ordered a 
publication ban.  Former bureaucratic Chuck Guite and ad 
executive Paul Coffin, who are also facing charges, will also 
have their upcoming testimony protected.  But American 
conservative blogger Ed Morrisey has begun to leak 
information from an inside source and the background of 
Brault,s testimony is fast becoming public.  Morrisey's 
story provided some details of what the shady dealings were, 
but left the important question of who ordered it, 
unanswered.  Deputy Opposition Leader Peter MacKay 
characterized the testimony as &explosive,8 and said &if 
the information is true, it could blow the door right off 
this government.8 
 
8. (SBU) The key question is when the testimony will be made 
public.  This in turn could depend on when Brault goes to 
trial in the criminal case.  If the case moves forward 
immediately, the ban will remain in place and the information 
will not be fully out until the Gomery Commission report is 
released at the end of the year.  But Brault,s lawyers are 
seeking a delay in the trial until the fall, which would give 
Judge Gomery the option to lift parts of the publication ban 
as early as this week.  This then would put the election 
strategists in high gear. 
 
9. (SBU) The Liberals are engaged in a high stakes game of 
damage control, calling in the RCMP to assess whether fraud 
has been committed against the party, and obtaining full 
standing at the Gomery inquiry, with full entitlement to 
cross examine witnesses.  PM Martin rose in the House April 4 
to defend the party against the &rumors or the actions of 
the activities of a very small few who may have colluded 
against the party and against the well-being of Canadians.8 
In the most tense and spirited question period we have 
observed, the PM also dismissed the call for a snap election 
until the Gomery report is complete, &because Canadians 
deserve to know the facts.8 
 
WINNERS AND LOSERS IN A SNAP ELECTION 
------------------------------------- 
 
10. (SBU) The Conservatives until now have been extremely 
cautious not to trigger an election for which they would be 
punished at the polls -- there is still a sense here that the 
Canadian people would prefer to avoid the cost and hassle of 
a snap election.  But at some point Canadians will also not 
want fear of an election to allow the government to act with 
impunity.  If the Brault testimony is made public and is a 
bad as it is characterized, it would be difficult to defend 
the role of the conservatives as the Official Opposition if 
they did not call for a vote of confidence (which the Bloc 
could also do). 
 
11. (SBU) If it came to an election, who would be the winners 
and losers? 
 
-- Bloc Quebecois: In the Fall, commentators said that the 
Bloc had hit its high water mark by winning 54 out of 
Quebec,s 75 seats.  They were wrong.  In a snap election the 
Bloc could increase its holdings by as many as nine seats 
according to commentator Andrew Cohen.  Cohen is concerned by 
how the Gomery scandal is empowering the Bloc Quebecois not 
because overt support for separatism is growing but because 
it is the only viable alternative to the failing Liberals. 
In any event he believes that separatism is the de facto 
winner. 
 
-- NDP: The NDP lost a number of seats in Manitoba and BC by 
less than 200 votes and could pick up a few seats in a snap 
election at the expense of the Conservatives or Liberals. 
The NDP exists largely in its own world, however, and will 
remain fairly constant. 
 
-- Conservatives: To win the election, the Conservatives 
would have to draw away around a third of the 75 ridings that 
the Liberals won in 2004 in urban Ontario.  The only 
ammunition they have to do so is scandal, since their social 
policy agenda, though clearly defined after their March 
convention, not only falls flat but alienates large swaths of 
the electorate.  If the Brault revelations are serious, 
voters would still have to decide whether to vote 
Conservative or simply stay home.  It is difficult to tell 
which way it would go, but a serious scandal is as good as it 
gets for the Conservatives, and the young turks in the party 
will likely argue that the party should take its chances. 
 
-- Liberals: Corruption is the Liberal,s largest 
vulnerability and there is no question they would lose seats 
over serious, detailed, and true charges of malfeasance. 
Their success would depend on how skillfully they can isolate 
the damage and insulate current party leaders from 
implication of direct corruption.  In any snap election, the 
Liberals will lose ground, the question is will they lose 
their governing status? 
 
12. (SBU) Comment: We have tried hard not to cry wolf by 
suggesting that an election is just around the corner every 
time the Conservatives hold a press conference.  In the 
current scenario there are still a number of off-ramps before 
an election: Will the Brault testimony be released?  Will it 
be as bad has been characterized?  Will the Conservatives 
cost-benefit calculation lead them to a no-confidence vote? 
But this is the first time there is a clear path to an 
election and we should begin to take the possibility of a 
spring election seriously. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
DICKSON