US embassy cable - 05OTTAWA1371

C O N F I D E N T I A L SECTION 01 OF 03 OTTAWA 001371 
 
SIPDIS 
 
E.O. 12958: DECL: 05/05/2009 
TAGS: CA, PGOV, Liberal Party, Conservative Party, NDP 
SUBJECT: PARLIAMENTARY MELTDOWN WHILE THE SHARKS CIRCLE 
 
Classified By: POLMINCOUN Brian Flora, reasons 1.4 (b) (d) 
 
1. (C) Summary:  The Conservatives continue to press the 
Liberals to allow a vote in the House of Commons that would 
let them attempt to bring down the government, but the 
Liberal leadership has thus far skillfully maneuvered around 
the circling sharks.  Speaker Milliken announced today that 
the Conservative motion put forward in the Public Accounts 
Committee which calls on the government to resign was in 
order and could come to a vote on May 18, but Liberal leaders 
have suggested that this might not be considered a confidence 
motion.  Meanwhile the Liberals will put their budget out for 
debate next week; vote on this bill could also bring the 
government down the week of May 16.  When it does come to a 
vote, it is no longer clear the Conservatives and Bloc have 
the votes to win -- the contest will be in the hands of two 
Independents and two Conservatives whose cancer treatments 
make it difficult for them to travel.  Meanwhile the Gomery 
inquiry continues to chip away at the "Liberal brand," with 
testimony coming 
closer to the Prime Minister and the then inner circle of the 
Liberal Party.  The Liberals are fighting back politically by 
spending money, large sums of it, on the kinds of social 
programs many Canadians fear the Conservatives would be less 
enthused about, and raising the specter of a 
Conservative-Bloc alliance that would harm national unity. 
End Summary. 
 
SPRING ELECTIONS COMING 
----------------------- 
 
2. (C) There is a growing sense here that the question is not 
if there will be a spring election but precisely when.  The 
Conservatives have not backed down from their intention to go 
to the polls -- coming out of their caucus on May 2 
Conservative Leader Harper said the government "should face 
the House of Commons in a vote at the earliest possible 
opportunity."  He ignored the hesitation on the part of some 
members of his caucus, notably North Toronto MP Belinda 
Stronach, who expressed the belief that going to the polls 
before the passage of the budget would upset many Ontarians 
who were counting on the release of infrastructure and social 
funding.  The Conservatives have since pushed the government 
to bring the budget forward for a vote which would be their 
first opportunity to bring the government down. 
3. (SBU) There are a number of opportunities lining up for 
the Opposition to express a lack of confidence in the 
Government but the Liberals still control the agenda. 
Political analyst Bruce Campbell told Poloff that he believes 
the Liberals would rather see the government fall over a 
budget vote than a straight up no-confidence motion, as this 
would help them in their campaign as the guys who just wanted 
to make government work but were thwarted by the sneaky 
Conservative-Bloc alliance.  In Question Period May 5 when 
Government House Leader Valeri was asked by Opposition House 
Leader Jay Hill to clarify when he would bring the budget to 
the floor, he said he would do so next week.  Depending on 
how much debate the bill elicits, it could come to a vote the 
week of May 16 (theoretically even sooner, but it is 
difficult to see it making it to the floor in less than a 
week).  Valeri did not clarify when he would allow for the 
remaining six opposition days, but Speaker Milliken cleared 
the way May 5 for the Conservative motion in the Accounts 
Committee that calls on the Government to resign to be 
brought before the House on May 18.  Valeri told reporters, 
however, that he did not consider this a vote a no 
confidence. 
 
4. (SBU) There have been rumblings about the Liberals wanting 
to defer any possible no-confidence motions until after the 
Labrador bi-elections on May 24, but the National Post's John 
Ivison points out that the projected Liberal winner for this 
seat would not actually be sworn in until mid-June, too late 
to come to the help of the beleaguered Liberals. 
 
RUNNING THE NUMBERS 
------------------- 
 
5. (C) All sides continue to run the numbers and keep their 
members close to Ottawa for any upcoming votes.  The 
Liberal-NDP coalition, with Independent Carolyn Parrish, is 
at 151 (not counting Speaker Milliken, who only votes in a 
tie).  The Conservatives and Bloc have 153 but two 
Conservatives are ill with cancer and may have difficulty 
getting to Ottawa for a vote, especially on short notice. 
The two key votes then, become the two remaining 
independents.  Chuck Cadman has flip-flopped so many times 
that it is impossible to tell which way he will vote.  David 
Kilgour recently left the Liberal Party in disgust but has 
not declared which way he would vote; he was recently given 
support for his Sudan initiative by the PM, something he 
cares far more about than Parliamentary politics.  He told 
PolMincouns May 5 that he really was still undecided and was 
fed up with the whole game. 
 
6. (SBU) There are some signs of desperation.  Earlier in the 
week Tory MP Inky Mark accused a Liberal cabinet minister of 
trying to buy his vote with an appointment as an Ambassador, 
and Deputy Conservative Leader MacKay suggested that there 
were four other Tories who were offered patronage 
appointments by the Liberal Government.  Treasury Board 
President Reg Alcock vigorously denied the accusation.  In 
the end, the numbers could go either direction, which is 
probably why the Conservatives are trying to line up multiple 
opportunities to bring the government down. 
 
ONE DAY YOU'RE UP, THE NEXT DAY YOU'RE DOWN 
------------------------------------------- 
 
7. (SBU) Opinion polls continue to vacillate.  After leading 
the Liberals for several weeks, a poll conducted by the 
Strategic Council for the Globe and Mail between April 24 and 
27 showed the Liberals once again in the lead at 30 percent, 
with the Conservatives at 28, NDP at 18, and Bloc at 14.  A 
Pollara poll conducted between April 27 and May 1, however, 
had the Conservatives ahead of the Liberals, 36 to 31 (with 
the NDP at 17 and the Bloc at 15).  Significantly, most polls 
still show the choice of voters in Ontario (which has 106 of 
308 seats) to be the Liberals.  An Ipsos Reid poll conducted 
the weekend of 30 April had Ontario Liberals ahead of the 
Conservatives 40 to 33, and the Pollara poll had the Liberals 
ahead 41 to 36. 
 
8. (C) Another key polling question however, was whether 
Canadians are ready to go to elections.  Most polls have been 
consistent in assessing they do not, but another Pollara poll 
conducted between April 25 and May 1 could indicate the first 
sign of a shift.  It shows that 45 percent of respondents 
support a spring election, compared to 41 percent who do not. 
 There seems to be a growing sense of resignation and a sense 
that the current governing situation is largely dysfunctional 
in a way that only an election can fix.  "Might as well get 
it over with" appears to be the trend. 
 
PARLIAMENTARY MELTDOWN 
---------------------- 
 
9. (C) In the midst of all this, Parliament is in a state of 
near meltdown, with Question Period so raucous that half the 
time is spent with Speaker Milliken trying to calm the MPs 
down to listen to questions and responses, and the other half 
spent with MPs trading increasingly nasty barbs.  Calls for 
resignations or firings have become commonplace.  The past 
two days have seen the Conservatives call on PM Martin to 
fire the Immigration Minister after he called the 
Conservative Party a modern Ku Klux Klan, and May 5 the 
Finance Minister called for the resignation of the Finance 
Critic, a somewhat bizarre suggestion, even in a 
Parliamentary system.  The noise level in Parliament has 
become shrill, and even seemingly little things such as 
calling a truce in order that Canada's leaders could attend 
VE commemorations, took immense wrangling to accomplish (and 
even after the agreement was struck the Conservatives 
apparently tried to break it by calling for a no-confidence 
vote on the day the official party was supposed 
to be in the Netherlands).  The image is increasingly of a 
Parliament that simply doesn't work. 
 
THE CAMPAIGN IS UNDERWAY 
------------------------ 
 
10. (C) The parties, meanwhile, are doing whatever they can 
to maneuver for position in advance of the coming election. 
The Liberals are doing so with money, the Conservatives with 
Gomery.  Since his historic speech April 21 in which he 
apologized for the sponsorship scandal and appealed to 
Canadian voters to allow him to call an election 30 days 
after the Gomery commission ended in the fall, PM Martin has 
transitioned from looking beleaguered and tired, to being all 
smiles.  He rolled out a CN $35 million child-care program in 
Manitoba and Saskatchewan, the leading edge of a CN $5 
billion national childcare program that he insists will be at 
risk if the Conservatives take over.  Ontario also signed a 
child-care program which will yield CN $280 million for 
programs this year, and another agreement with Ontario will 
provide CN $301 million for low income housing. There are 
dozens of other spending initiatives being announced from 
coast to coast -- 72 projects in a week according to the 
National Post, everything from homeless shelters to dredging 
of fishing harbors.  The Conservatives have been calling it 
Paul Martin's non-election promises, and post a running total 
of recent Liberal spending on their website -- currently at 
CN $7,566,039,483 (although since it is not broken down it 
would take a high level of trust or cynicism to believe this 
figure, which appears to include a good deal of normal 
government spending).  On the margins of spending money, the 
Liberals do everything they can to inflate the specter of a 
hidden agenda by the Conservatives, attacking their health 
care policies and stances on social issues.  In addition, 
they are focusing on the alliance between the Conservatives 
and the separatist Bloc and its potential for undermining 
national unity. 
 
11. (C) The Conservatives do not have such deep pockets so 
they have been focusing their pre-campaign on the Gomery 
inquiry.  As he did during the Brault testimony, which for 
the first time began to lay out the extent of Liberal party 
corruption in the adscam scandal, Conservative leader Harper 
rose May 5 in Question Period with a simple question for the 
PM.  If Mr. Guite testified that the PM was involved in 
channeling contracts to Liberal supporters, will the PM 
himself finally stand and simply admit it before the House. 
The PM gave his standard answer, that he never interfered 
with the awarding of contracts, and Public Works Minister 
Brison later chided the Conservatives for putting so much 
stock in "testimony from the dubious (Guite) about the 
deceased (Tremblay - who ran the sponsorship program from 
1999-2001)." 
 
GOMERY INQUIRY -- DEATH BY A THOUSAND CUTS 
------------------------------------------ 
 
12. (C) The Guite testimony does, however, appear to be 
significant, and is sure to hurt the Liberals further.  Chuck 
Guite was the federal bureaucrat who administered the 
sponsorship program until he resigned in 1999, and was at the 
heart of the scandal.  After three days of testimony, the 
publication ban was lifted and his allegations were sprayed 
over the front pages of Canada's dailies -- "Guite's Sordid 
Tales" in the National Post, "Guite Points the Finger" in the 
Globe and Mail, and "Grits Abused, Manipulated Lucrative ad 
Contracts: Guite," from the Ottawa Citizen.  Guite was 
strategic in his testimony, unlike the tactical, detailed 
testimony of Mr. Brault.  But it was just as damaging for the 
"Liberal brand," as pundits here are calling it. 
 
13. (C) Guite said that there was a certain flexibility built 
into the sponsorship program, and advertising contracts in 
general, such as excluding price considerations when 
selecting agencies for contracts.  "I will be very blunt," he 
said, "it's because they can't get their agencies that ran 
their campaign.  A campaign is run by communication agencies 
and advertising agencies.  And when the campaign is over and 
they have won, they want payback."  In the piece of his 
testimony that the Conservatives have clued in on, he 
indicated that then Tourism Minister John Manley and then 
Finance Minister Paul Martin intervened to ensure that a 
contract with a key Liberal supporter would not be 
discontinued. 
 
14. (C) The Gomery inquiry continued May 5 with the testimony 
of Michel Beliveau, former Director General of the Liberal 
Party of Quebec, who detailed how sponsorship money was 
funneled back into the party through Liberal organizer and 
Chretien friend Jacques Corriveau.  The intent was to try to 
win back the "orphan ridings" that had been lost to the Bloc 
Quebecois.  Beliveau said he was approached by Corriveau and 
asked how much money he would need to win these ridings back 
and when he told him $300,000, he was later given the money 
in cash in a single envelope.  When asked whether he thought 
there were any irregularities in this procedure, he replied, 
"Yes, I never gave them a receipt." 
 
15. (C) Comment: It is all about the timing of an election 
and the issue that takes the government down.  The Liberal's 
optimal scenario was to avoid an election until the late fall 
in the hopes that anger over Gomery would subside.  Failing 
that they would apparently like to see the government fall 
over the budget rather than a no-confidence motion, but as 
late as possible so that Canadians will blame the 
Conservatives for an election during cottage season.  The 
Conservatives would prefer to bring the government down as 
soon as possible on a no-confidence motion, in order to set 
the stage for an election fought over the issue of integrity. 
 
 
15. (C) Comment, cont'd:  At this point trying to forecast 
with any precision what will happen next is like nailing 
jello to the wall -- the polls fluctuate daily, the timing of 
the election is up in the air, and in any case, the vote 
could go either way.  Still, the Liberals can't delay a vote 
forever, and the week of May 16, specifically May 18 and 19 
continue to be the favorite prediction of politicians and 
pundits for either a budget vote or a vote of no-confidence. 
How it turns out will then be in the hands of Independents 
Cadman and Kilgour, and the two cancer-striken Conservatives. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
DICKSON