NEW BY-ELECTIONS MAY SIGNAL CONSERVATIVE CONFIDENCE

C O N F I D E N T I A L OTTAWA 002308 SIPDIS SIPDIS E.O. 12958: DECL: 12/21/2012 TAGS: PGOV CA SUBJECT: NEW BY-ELECTIONS MAY SIGNAL CONSERVATIVE CONFIDENCE Classified By: PolMinCouns Scott Bellard, reason 1.4 (d) ¶1. (U) Prime Minister Stephen Harper on December 21 set the date of March 17 for by-elections in the Commons' ridings in Toronto Centre (Ontario),Willowdale (Ontario),Vancouver Quadra (British Columbia),and Desnethe-Missnippi-Churchill River (Saskatchewan). Liberals (including three former Cabinet ministers) had held all four seats before their resignations. The Prime Minister was obliged to set dates for the two Ontario seats by the end of the year (within six months from the vacancies) but could have waited on the other two ridings, and could have set virtually any date(s) in the new year for the by-elections. ¶2. (C) According to Liberal Party National Director Greg Fergus, the Liberal Party mechanism is now stronger than in years, both in terms of morale and finances, contrary to numerous accounts of serious dissatisfaction within the caucus about the current policy of "whipped abstentions" on confidence votes and of a critical lack of funding. While not predicting early elections, he pledged that the Liberals would be in great shape both for the by-elections and for eventual federal elections. He described the average Liberal Party member as "happy." The latest Canadian Press Harris-Decima poll put support for the Liberals at 32 pct (up four points, and with support in Ontario as high as 41 pct), with the Conservatives falling six points to only 30 pct -- a statistical dead heat. ¶3. (U) In a typically blunt message, PM Harper warned in a December 20 press interview that Canada may face tougher economic times ahead, in part due to the U.S. economy and in part to the costs of new environmental programs in Canada. (Polls consistently show the environment as the single most important issue to voters.) He brushed off criticism of being too controlling by noting that "I'd rather have the criticism of leading from strength than leading from weakness." ¶4. (C) Comment: Harper is nothing if not a master strategist. The March date may indicate that the Conservatives now believe their government is not apt to fall early in the new Parliamentary session beginning on January ¶28. It probably also reflects their calculation that the by-elections will force the Liberals to acquiesce in the upcoming budget vote (which Liberal leader Stephane Dion has repeatedly suggested in recent days might be a confidence issue that could bring down the government). The Liberals are fairly confident of success again in all four ridings, and will hope for some additional "bounce" from these likely electoral gains before eventual elections. The Liberals are also keen to have their new Foreign Affairs Critic Bob Rae (running in Toronto Centre) actually in the Commons, although he will miss the expected Parliamentary debate on the recommendations of the Manley Panel and the way forward on Afghanistan. In the meantime, the Harper government will do everything in its power to make progress on its legislative agenda in 2008 (septel). Visit Canada,s Economy and Environment Forum at http://www.intelink.gov/communities/state/can ada WILKINS