MARTIN SURVIVES BUDGET VOTE, WILL THE TORIES STAND

C O N F I D E N T I A L SECTION 01 OF 03 OTTAWA 001528

SIPDIS

E.O. 12958: DECL: 05/19/2014
TAGS: CA PGOV PREL NDP
SUBJECT: MARTIN SURVIVES BUDGET VOTE, WILL THE TORIES STAND
DOWN?

Classified By: POLOFF Keith W. Mines, reasons 1.4 (b) (d)


1. (C) Summary: The Liberal government survived a budget vote
May 19 by a one vote margin, the first time in Canadian
history that the Speaker had to vote to break a tie. The
impending cliffhanger kept Ottawa buzzing for a week and now
leaves MPs to return to their ridings for the long weekend
and take the pulse of constituents before charting their next
moves. It appears the Conservatives will not try again to
bring the government down this sitting, although they will
still have the option on a number of occasions between now
and the summer recess on June 23d. This then pushes the
election back to around February 2006, with the parties
effectively entering now into a ten-month campaign. While
the tactical victory goes to Martin, Harper will try to keep
his eye on the strategic prize of winning the next election,
which with the Liberal Party brand so badly damaged, he still
has a very good chance of doing. But in a system where
victory comes down to a gum-chewing independent with a
ponytail who decides how to vote 30 minutes before the
session, well, anything can happen. End Summary

LIBERALS SQUEAK BY
--------------


2. (C) In a cliffhanger, the Liberals, supported by the New
Democratic Party and two independents, survived a confidence
vote on the NDP amendment to the budget May 19. After the
defection of Belinda Stronach earlier in the week evened the
score at 151 a piece, the vote was in the hands of the two
independents, Chuck Cadman and David Kilgour. The Liberals
only needed one of them to win, since in a tie Speaker
Milliken would be obligated by Parliamentary procedure to
vote in favor of further discussion of the bill at hand.
There was high drama going into the vote, with a Liberal MP
the afternoon prior leaving the House on a stretcher with
chest pains, and the morning of the vote former Liberal MP
Carolyn Parrish announcing she had intense stomach pains (she
didn't let it stop her, stating later "come hell or high
water, there's no frigging way I'm going to let one ovary
bring the government down"). In the end all the MPs were in
their places but it was still not clear which way Cadman and
Kilgour would vote. Cadman had expressed that he would
follow his constituents, who were weighted against an early
election, and Kilgour indicated he would vote against the
government for not doing enough on Sudan and for unease over
how Martin had enticed Stronach to switch sides with a
cabinet position. The first vote on the original budget
passed with Conservative support but with the Bloc voting
against. Then the vote on the NDP amendment to the budget
ended in a tie. Speaker Milliken then assumed his historic
duty to break the tie, allowing the budget to go to third
reading and the government to survive. It was the first time
this had happened in Canadian history.


3. (C) The Liberals treated the victory like an election win,
with a televised caucus rally afterward in which the
strongest applause was given to the backroom Parliamentary
strategist who had figured out how to keep the government
alive amidst the many attempts by the Conservatives and Bloc
to bring it down. PM Martin's remarks to the party and the
country were that "tonight we stood up for a balanced budget.
Tonight we saw the value of cooperation over conflict.
Tomorrow we begin to put tonight's vote into effect." He
called on the opposition to put aside their efforts to bring
the government down and cooperate with the government on the
business they have been elected to conduct.

CONSERVATIVE NEXT STEPS
--------------


4. (C) The Conservative response is not yet clear, and
probably will not be for the next few days; they have a
week-long recess to listen to constituents and decide on
their next steps. Conservative House Leader Jay hill said
last week that if they lost this vote it was unlikely they
would continue their efforts to bring the government down.
After the vote, Conservative Leader Harper said "while
tonight's vote is an unfortunate result for this country at
the moment, it will provide us Conservatives with persuasive
arguments for change when Canadians finally and inevitably
head to the polls." Deputy Party Leader MacKay said on the
way into a caucus meeting after the vote, "Look, we're not
going to be obstructionist, we're not going to be
irresponsible, we're not going to simply play some kind of
partisan game here. This is very serious business." What
all this means is not entirely clear. It would seem that the
Conservatives hold out the possibility of defeating the
government this session if the numbers were to line up, but
will not be actively attempting to do so, and will allow the
business of Parliament to continue in the meantime. They
still have eight days when confidence votes will be held --
four on the budget, and four on opposition days -- between
now and the end of Parliament on June 23.

WHERE DID THE CONSERVATIVES GO WRONG?
--------------


5. (C) Where did the Conservatives go wrong in losing this
key vote? It may have been more a question of where the
Liberals went right. When Harper first threw down the
gauntlet it appeared he had the votes in the House to win and
only needed to wait for the right opportunity. He was taking
a chance because the polls showed that Canadians still did
not want to go to elections, but he was probably banking on
the fact that Gomery was taking a large enough toll on public
confidence and would continue to do so through the election
season. He reasoned that people's anger over Liberal scandal
would ultimately outweigh their anger about being dragged to
the polls so soon after the last election. Unfortunately for
Harper, the Liberals controlled the public checkbook, the
Parliamentary calendar, and the appointment of Ministers.


6. (C) PM Martin went to work, showing himself as anything
but Mr. Dithers in the process. First, he secured the
support of the NDP by tacking on an additional CN $4.2
billion to the budget for social programs, thus raising his
vote totals to within striking distance of the
Conservative-Bloc alliance. Then he manipulated the calendar
to buy time while he drew out some more support, denying the
Conservatives their normal Opposition Days which would have
brought the government down. When the government did lose a
non-binding no-confidence vote, he simply ignored it, and
then accused the Conservatives of obstructing the business of
government when they refused to show up for work in the
vote's aftermath. He then went to work trying to swing the
last needed one or two votes, trying first to buy David
Kilgour's vote with a major aid package for Sudan. When that
didn't work he tried to get to Cadman. Feelers were also
sent out for Conservatives who risked losing their seats in
an election who might want a Senate or other high-level
posting. Then in a stroke of luck Belinda Stronach crossed
the isle. Assuming Cadman stuck to his story of following
his constituent's wishes, the PM was secure.


7. (C) For Harper it was most definitely a tactical defeat,
and will not bode well for his future leadership of the
party, which is already on shaky ground. And while Harper
had few of the tools and none of the money that the PM did,
he nonetheless made some mistakes that will resonate. First,
he may have gotten ahead of the electorate and of his own
caucus, many of whom had doubts about plunging into an
election so soon. Second, he started to get somewhat
emotional in his exchanges with the governing party and
especially with the PM. His reference to the PM's career
"going down the toilet" in question period was precisely the
kind of thing that generous-minded Canadians don't like in
politicians. But it was the background that is emerging from
the Stronach affair that hits the Conservative leader the
hardest. Harper apparently dressed Stronach down after her
public questioning of the Conservative position on the
budget, and then sources inside the party report that at a
recent pre-campaign training session a Stronach photo was
used as an example of what candidates ought not to do. He
also reportedly made it clear to Stronach that she would not
have a place of prominence any time soon in the party. All
of this undoubtedly accelerated this key departure.

ELECTION SHAPING
--------------


8. (C) Losing the vote last night was a tactical defeat but
the looming question regards the strategic picture. Assuming
the Conservatives do not force a vote in coming weeks, the
two parties are effectively locked in a 10-month campaign
that could culminate in a February election. University of
Ottawa political historian and popular commentator David
Mitchell told PolOff the day of the vote that it will all
come down to the same question as the last campaign. The
2004 election, he said, was the triumph of fear over anger.
Voters were angry about Gomery, but fearful of the
Conservative "hidden agenda" that the Liberals so skillfully
exploited. This time the question will be whether anger will
trump fear. Mitchell believes that the anger will be greater
and the fear mixed. Anger will continue to grow as Gomery
grinds on. It has seriously damaged the "Liberal brand" and
there is more to come. And it is no longer just Gomery,
there are also the public accounts hearings that are showing
Liberal malfeasance in more routine areas of contracting and
the way the Liberals have bought support over the past few
weeks will probably resonate negatively.


9. (C) The fear factor is a mix of the supposed Conservative
hidden social agenda, some of which was put aside in the
recent Conservative Convention. But with recent fissures
emerging among Western and more progressive Conservatives,
something Stronach's departure served to highlight, this will
continue to resonate, especially with Ontarians. Added to
social fears there is the concern that a Conservative victory
would strengthen the separatists in Quebec, with the ultimate
fear that Canada could, in Mitchell's word's "sleepwalk"
toward a catastrophe. It is indeed ironic that the Liberal
Party, whose sponsorship scandal has done more than anything
to bolster the separatist cause, would be seen as the party
which could keep the country together, but such is how many
Canadians will see it.


10. (C) Comment: All of this will play out in the coming
months as the two sides continue to volley for position for
the coming election. But there is now some breathing space.
For the U.S. it gives us a bit of stability with which to
advance our agenda in the SPP, defense spending, Haiti, and
other initiatives. We are destined to deal with a minority
government for the foreseeable future and the election,
whenever it comes, will presumably bring another minority
government. But no government in the future could possibly
have the kind of even numbers that this one has. This has
been an anomaly that is unlikely to be repeated. Meanwhile
it makes for, and will continue to make for, a very wild ride.

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DICKSON