CANADA'S POLICY PRIORITIES FOR 2008

C O N F I D E N T I A L SECTION 01 OF 03 OTTAWA 000001

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/02/2018
TAGS: PREL PGOV ECON SENV AF CA
SUBJECT: CANADA'S POLICY PRIORITIES FOR 2008

REF: A. 07 OTTAWA 1928


B. 07 OTTAWA 1924

Classified By: CDA Terry Breese, reason 1.4 (d)


1. (C) Summary: The government of Prime Minister Harper
intends to maintain a steady course in implementing the
policy priorities of the October 2007 ""Speech from the
Throne"" (reftels),while the Conservative Party's minority
status in both Houses of Parliament makes demonstrable
progress problematic. The government is determined to find a
way to win Parliamentary support for an extension of the
Canadian Forces' mission in Afghanistan beyond February 2009,
and counts on help from the upcoming recommendations of the
Manley Panel. With polls showing climate change as the
biggest single issue for voters, the government is striving
to come up with some tangible new policies, and likely looks
to forming a solid front with the U.S. and other major
economies in charting a common course. In the wake of the
January 1, 2008 cut in the GST, the government's tax-cutting
days are over for the present, and declining surpluses may
make the budget leaner in 2008 - and more difficult to pass.
Key legislation on terrorism and crime remain in Parliament,
but probably have sufficient support in both Houses to pass,
unless there is a spring election. The government has
pledged to pursue strengthened copyright legislation early in
2008, but it, too, will face tough prospects. The government
plans a new strategy in 2008 to strengthen Canada's presence
in the Arctic, a popular issue. However, virtually all
political pundits are already looking for signs of federal
elections, with the only real debate now as to whether they
will come in the spring or the fall of 2008. End Summary.

PURSUING A CONSISTENT AGENDA
--------------


2. (C) Twenty-three months after taking office, the minority
Conservative government under Prime Minister Stephen Harper
has made some progress in advancing a consistent policy
agenda focused on incremental change in limited priority
areas: delivering ""clean"" and accountable government, tax
cuts, reinvesting in defense, bolstering Canada's northern
sovereignty, promoting national unity, and raising the
profile of Canada's role abroad through its combat mission in
Afghanistan, contribution to stabilization in Haiti, and
renewed partnership with the Americas. However, it has had
less success in pushing through a tough crime agenda,
achieving a sustainable environment, ensuring democratic
(Senate) reform, and introducing comprehensive copyright
legislation. Meeting these objectives, and determining the
future of Canada's mission in Afghanistan, will be the themes
of Parliament's upcoming sitting, with the House of Commons
returning on January 28 and the Senate on January 29.

WINNING SUPPORT FOR THE AFGHAN MISSION
--------------


3. (C) PM Harper has made clear privately and publicly that
the government believes Canadian Forces should remain in
Afghanistan until at least 2011, while acknowledging that
Parliament will need to approve any extension of the mission
beyond February 2009 (although such a vote is not a
Constitutional requirement). The government is clearly
counting on tangible recommendations from the independent
Manley Panel in late January that could improve the political
QManley Panel in late January that could improve the political
climate on this issue and broaden domestic support, but the
late December death of another Canadian soldier (the 30th in
2007 and 74th overall) as well as instability in Pakistan
complicate this goal. In an ideal world, Canada would like
to inform NATO allies of Canada's decision at the 2008 NATO
Summit in Bucharest on April 27, but it appears increasingly
possible that the Parliamentary vote may not take place until
as late as May (even assuming the government remains in
place). Harper wistfully admitted in a year-end interview
that ""I don't know whether Canadians do - or don't -
understand"" the importance of remaining involved in
Afghanistan and what is at stake. The government's key
challenge is to get them to understand - and soon.

PLACATING FEARS ABOUT ENVIRONMENT
--------------


4. (C) Climate change remains - according to polls - the
single most important issue to voters, but the government has
yet to convince the voting public that its policies are

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effectively addressing climate change or that it is best
suited to handle the issue. While the performance of
Environment Minister John Baird at the UN climate change
conference in Bali won mostly negative reviews at home,
Canada seems certain to continue resisting calls for
near-term emissions reduction targets that it deems are too
aggressive for its economy. Domestically, the government
will continue to push a patchwork of energy efficiency and
alternative fuels programs while it struggles to devise,
implement, and enforce nationwide emissions standards. The
Conservatives' most effective claim to the voters - so far -
is that the Liberals had a weak record in meeting Kyoto
commitments and protecting the environment while in office.
Harsher than usual winter weather in late 2007 and early 2008
may, ironically, help the government to kick this can a
little further down the road and give its programs more
opportunity to achieve noticeable progress in the run-up to
eventual elections.

ECONOMY AND THE BUDGET
--------------


5. (SBU) PM Harper has claimed that the Canadian economy is
""arguably the strongest in three decades."" He was able to go
ahead with a long-promised second cut in the federal GST, now
down to 5 pct. Concerns remain high, however, about the
longer-term effects of a U.S. slowdown, including possible
job losses in Canada. PM Harper has already indicated that
no more tax cuts are forthcoming for the foreseeable future.
At the same time, the government will need to deliver its
third federal budget to Parliament in February or March, and
its passage is by definition a confidence vote. The
Conservatives need the support of at least one other party to
pass the budget. The government already used up most of its
fiscal flexibility in its Fall Economic Statement, which
provided C$60 billion in broad-based personal, corporate, and
sales tax relief over five years, and which Parliament
approved in December. The cuts will put tax savings in
voters' hands in time for spring tax-filing season. The
willingness of opposition parties to support or abstain on
the government's budget will probably decrease this year,
however. The budget may contain regionally targeted
initiatives, such as aid for the Ontario and Quebec
manufacturing and forestry sectors, aimed at garnering the
support of the Bloc Quebecois. PM Harper will meet with
provincial premiers on January 11, at which time he will
likely explain these upcoming initiatives, which he
undoubtedly hopes will win some support for the budget.

PASSING TERRORISM AND CRIME BILLS
--------------


6. (SBU) Parliament will have to move quickly to pass
amendments to Canada's system of immigration security
certificates in order to meet a February 23 deadline from the
Supreme Court of Canada, or face the mandatory elimination of
the use of these certificates. The bill still faces
additional debate in the Commons and must also pass the
Senate before that deadline, but has broad support given that
it follows the Court's guidelines on how better to balance
civil rights and national security. A bill to revise the
Anti-Terrorism Act will be more controversial. Introduced
first in the Senate and still in committee, the bill would
Qfirst in the Senate and still in committee, the bill would
restore two powers - investigative hearings and preventive
arrest - that were subject to sunset clauses and lapsed in
February 2007 when Liberal MPs voted against extending them.
This time, however, the Liberals have promised to approach
the bill with no ""preconceived bias.""


7. (SBU) Tackling crime has long been a central plank in the
Conservatives' platform, but the their ""safe streets"" agenda
has proved difficult to push through Parliament. Five
flagship crime bills introduced in 2006 all failed to pass.
In October 2007, the government grouped all five bills
(including some revisions reflecting opposition concerns)
into a comprehensive ""Tackling Violent Crime"" bill that would
establish mandatory prison sentences for serious gun crime,
toughen bail provisions for serious firearms and other
weapons offenses, make it easier to designate someone a
dangerous offender, crack down on drug and alcohol-impaired
driving, and raise the age of sexual consent to 16 years.
The bill passed the House of Commons without amendment and is
now in committee in the Senate. Its fate may rest on
election timing. Liberal senators (who form a majority in
the upper house) may have an incentive to hold the bill up in

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the short term to avoid handing an election eve gift to the
Conservatives if it looks like the government may not last
long into 2008. However, if the government continues to
survive for the foreseeable future, the Liberals will want to
avoid being tagged as ""soft on crime"" and the Senate will
probably also pass the legislation.

COPYRIGHT REFORM
--------------


8. (SBU) After failing to introduce stronger copyright
legislation in the fall 2007 session as expected, the
government now plans to introduce a major copyright reform
bill after Parliament returns in late January. The
government has expressed confidence that the revised
legislation will both placate both domestic concerns and meet
international standards. Despite calls for stronger
copyright protection from two parliamentary committees in
2007, recent grassroots opposition nonetheless makes passage
of this legislation rough sledding ahead.

ARCTIC IMPROVEMENTS
--------------


9. (SBU) Voters remain concerned about the Arctic, and the
public has been broadly supportive of the government's
ongoing efforts to assert Canadian sovereignty and to improve
its ability to defend its Arctic interests. Especially
popular were programs to modernize Halifax-class frigates, to
purchase new Arctic patrol ships, to deploy additional
Canadian Rangers, and to develop a deep water port in the far
North. The government will announce a ""Canada First"" defense
strategy early in 2008 further to demonstrate its attention
to this issue, as well as to bolster its long-term military
modernization program, including purchases of four C-17
Globemaster strategic airlift aircraft, 17 C-130 Hercules
tactical airlift aircraft, 16 CH-47 Chinook Helicopters,
modern Leopard tanks, and heavy trucks. The new strategy may
include purchases of new search-and-rescue aircraft and
utility planes, as well as unmanned aerial vehicles, for
Arctic coverage and an improved Arctic underwater
surveillance system.


BUT THE BAD NEWS IS...
--------------


10. (C) Even with a recent poll showing 92 percent of
Canadians optimistic that 2008 will be a good one for them
personally (up from 88 heading into 2007) and 80 percent
optimistic about Canada's prospects in the new year, the
government still faces a tough year ahead. The Conservatives
have come off a difficult late fall, during which their
support drifted from a high of 42% in early November to a low
of 30% in mid-December. However, the opposition parties --
especially the Liberals -- have not been able to gain much
traction so far. This has not prevented the Liberals and New
Democratic Party from stepping up their election rhetoric,
with Liberal leader Stephane Dion warning voters to prepare
to vote in 2008. The government's already tenuous ability to
manage a fractious parliament from a minority position will
face even more challenges in 2008. Increasingly, the chatter
in political circles is not over whether there will be new
federal elections in 2008, but rather about when - spring or
fall? The growing prospects of upcoming elections make
passage of any major new legislation or adoption of any major
new policies extremely problematic, leaving the Conservatives
in somewhat of a caretaker role. However, PM Harper has
Qin somewhat of a caretaker role. However, PM Harper has
shown himself an adept and shrewd parliamentary tactician,
and the Conservatives retain the advantage of clarity and
consistency on major issues, mostly in sync with U.S.
priorities and interests.

Visit Canada,s Economy and Environment Forum at
http://www.intelink.gov/communities/state/can ada

BREESE