CANADA: ODDS RISE FOR GOVERNMENT TO SURVIVE -- THIS WEEK

UNCLAS SECTION 01 OF 02 OTTAWA 000719



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TAGS: PGOV, CA

SUBJ: CANADA: ODDS RISE FOR GOVERNMENT TO SURVIVE -- THIS WEEK



REF: OTTAWA 709



1. (SBU) Summary: Odds of the federal government's survival -- for

now -- rose again on September 14 following a Conservative gesture

to the opposition on Employment Insurance (E.I.) that may be enough

to allow the New Democratic Party (NDP) to switch tactics and back

the government, at least temporarily averting an election that the

NDP is ill-equipped to fight. However, the left-wing NDP is

unlikely to risk alienating its core supporters by propping up the

Conservatives for very long. For their part, the Conservatives

currently occupy a sweet spot -- ahead in the polls and governing as

the economy improves, but election-ready if the opposition parties

unite to topple the government in the coming weeks. While the

government looks likely to survive a confidence vote on a Ways and

Means motion on September 18, it will likely face another confidence

vote on September 29 or 30, which it may well lose. End Summary.





CONSERVATIVES SEIZE THE INITIATIVE

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2. (U) The House of Commons reconvened on September 14 after its

summer break, and the Conservatives moved quickly to test their

support in the House of Commons after Liberal leader Michael

Ignatieff announced on September 1 that his party would no longer

prop up the government (reftel). The Conservatives tabled notice of

a Ways and Means motion (a procedural device and an automatic

confidence matter) to implement tax credits announced in the 2009

budget -- but not yet approved by Parliament, unbeknownst to most --

including a popular home renovation tax credit, help for first-time

home buyers, and aid to farmers. The House of Commons will vote on

the motion on September 18. In a separate initiative, the

government announced its intention to table legislation on September

16 to enhance Employment Insurance (E.I),including extending

benefits by up to 20 weeks for long-tenured workers. The measure

would help an estimated 190,000 workers, especially in the hard-hit

manufacturing, auto, and forestry industries.



MINOR PARTIES TO HOLD THEIR NOSES?

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3. (U) Liberal leader Michael Ignatieff quickly made clear that his

party would vote against the Ways and Means motion. However, the

New Democratic Party (NDP) and the Bloc Quebecois have signaled that

they might support it, dialing down expectations of the government's

imminent defeat. NDP leader Jack Layton insisted that, although

ready for an election, he preferred to stay in Ottawa and "make

Parliament work." He stated that the proposed E.I. changes appeared

to be "a step in the right direction," while still falling short of

what the NDP would like to see. Unlike the NDP's decision earlier

this year to oppose the 2009 budget without even reading it, Layton

pledged to wait until he had seen the proposed E.I. legislation

before deciding how the party would vote on the Ways and Means

motion (although the two pieces of legislation are not directly

linked). Layton nonetheless underscored that the NDP was not

prepared to give the government a "blank check" and that its

support, if any, would be on a vote-by-vote basis.



4. (U) Separately, Bloc Quebecois leader Gilles Duceppe indicated

that his party would have "no problem" supporting the Ways and Means

motion if only to ensure adoption of the popular home renovation tax

credit, but "if it's on all of the government's work, we are not in

agreement with this government." Duceppe has not yet formally

confirmed how his party would vote on the motion, expressing concern

that the bill might contain a "poison pill."

Qthat the bill might contain a "poison pill."



PUSHING THE ENVELOPE

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5. (U) The Conservatives have insisted that they have not, and will

not, engage in back-room deals to secure opposition support.

Following the confidence vote on the Ways and Means motion on

September 18, the government may present its third "report card" on

the economy as early as September 18, although it is not due until

the week of September 28, according to the terms of an agreement

between the Liberals and the government in June. This agreement

also provides for a Liberal "Opposition Day" two sitting days after

the government tables the report. If the report card is tabled on

September 18, the Liberals would have their first opportunity to

table an explicit motion of non-confidence on September 29 or 30.

(The House of Commons does not sit the week of September 20 due to

G-20 meetings.)



POLLS GIVE CONSERVATIVES THE EDGE

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6. (U) In the polls, the Conservatives continue to open a lead over

the opposition parties after late summer shifts in voting intentions

broke the stalemate of the past ten months. An Ipsos Reid poll

released September 15 suggested that the Conservatives had the



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support of 39 pct of decided voters nationally (close to majority

territory),while the Liberals had 30 pct and the NDP 12 pct.

Support for the Bloc remained steady, and it remained in first place

in Quebec. A separate Nanos poll gave PM Harper a wide margin over

the Liberals' Ignatieff on trustworthiness, competence, and vision.





7. (SBU) Comment: The increasingly confident Conservative

government has moved methodically through the summer to undermine

the political raisons d'etre for a fall election by announcing

stimulus funding, crafting changes to E.I., and warning of the

damage to the economic recovery of a needless campaign. The

Conservatives appear well-positioned -- financially and in the

polls -- either to continue governing or to fight an election.

Although the government is likely to survive its next confidence

test on September 18, the Liberals appear increasingly determined to

topple the Conservatives, and sooner rather than later will likely

be able to garner the support of the NDP and the Bloc in doing so.



BREESE