PARLIAMENTARY MELTDOWN WHILE THE SHARKS CIRCLE

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 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
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DICKSON