1. (C/NF) SUMMARY: The Liberal Party will formally elect a
new party Leader on November 15, but that individual will
not/not become Prime Minister of Canada until incumbent Jean
Chretien's retirement - announced for February 2004. With
only two leadership contenders remaining, the question is not
whether former Finance Minister Paul Martin will become Prime
Minister but when. Though many pundits assert that Chretien
would never want to facilitate a Martin transition to power
by leaving early, Embassy sources (protect) suggest the PM
may in fact be considering a December exit. END SUMMARY.



2. (U) With the party membership drive ended on June 21, the
next hurdle in the contest for leadership of the Liberal
Party is the selection of delegates to the Liberals'
Leadership Convention in six weeks' time. Some 400,000
registered Liberals across 301 ridings nationwide will choose
representatives (13 per riding) to the November Convention
the weekend of September 20-21. This year's process will
inaugurate reforms designed to bring the selection of the
party leader and eventual PM of the country closer to the
grass roots level of the party: Delegates will be chosen
according to a procedure incorporating the percentage results
of a popular vote taken among the membership of each riding
association to reflect actual candidate support.



3. (C) Following Deputy PM John Manley's decision to bow out
of the race (reftel), general expectations are high that the
delegate selection process will demonstrate overwhelming
support for Paul Martin--a centrist candidate--as the next
party Leader. Though Heritage Minister Sheila Copps, the
remaining other candidate, enjoys a certain "cult following,"
her left-of-center ideological bent is deemed too narrow for
most Liberals.



4. (C) Martin insiders still are careful to maintain a
"cautiously optimistic" demeanor on prospects for their
candidate. At the same time, public political support for
Martin's bid has continued to grow even during Canada's
traditionally slower summer cottage season. The most recent
Cabinet-level endorsement came last week from International
Cooperation Minister Susan Whelan, a Manley supporter, whose
support brings to "at least 31" (out of a possible 39) the
number of Cabinet members backing Paul Martin.



5. (C/NF) COMMENT: Given Chretien's ingrained antipathy
toward his likely successor and longstanding political rival,
veteran political observers expect the PM -- against all
reason -- to throw obstacles in Martin's path. This would
include staying on as PM until the bitter end. At the same
time, at least one senior official told Ambassador Cellucci
that Chretien likely will depart in December, and that a
Martin cabinet could be sworn in before year-end. Adding
credence to this scenario is reliable information from a
contact of the DCM (please protect) that a senior advisor
close to the PM has lined up employment with a prominent
Ottawa firm beginning January 1, 2004.



6. (C/NF) COMMENT (cont'd): The Martin camp is maintaining
silence on what they do or do not know about Chretien's
plans. Other than to acknowledge that transition issues (such
as prospective Cabinet appointments) are on hold until after
the September delegate selection results, Martin's campaign
advisors claim no contact with the Chretien team. The
candidate himself (protect) commented to Ambassador Cellucci
that their recent meeting far exceeded the sum of his
exchanges with the Prime Minister in the past year.
KELLY