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Cablegate: Newfoundland-Labrador Provincial Election: Tory Sweep Ends

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS HALIFAX 000356

SIPDIS

STATE FOR EB/ESC/IEC/EPC AND WHA/CAN
DOE FOR PI (DEUTSCH)

E.O. 12958: N/A
TAGS: PGOV ENRG EPET CA
SUBJECT: NEWFOUNDLAND-LABRADOR PROVINCIAL ELECTION: TORY SWEEP ENDS
LIBERAL HOLD

1. SUMMARY: There could be a new round of political wrangling
between the federal government and the newly elected Progressive
Conservative Party in Newfoundland-Labrador. In an October 21
provincial election campaign, the Tories led by the charismatic
business leader Danny Williams, solidly toppled a 14-year
Liberal hold on the province. A key plank in the successful
Tory platform was a pledge to seek a new jurisdictional and
fiscal arrangement with Ottawa over energy and other resource
development, contentious issues that have the potential to cause
friction. END SUMMARY

2. Newfoundland-Labrador Progressive Conservatives, under
leader Danny Williams, crushed the incumbent Liberal government
of Premier Roger Grimes in an October 21 provincial election.
Williams, a successful business leader and lawyer from St.
John's, led his party in capturing 34 of the 48 seats in the
House of Assembly, a significant gain over their previous 19
seats. The Liberals, now the official opposition, saw their 27
seats reduced to 12, while the largely ineffectual New
Democratic Party maintained the two seats they held before the
September 29 election call.

3. The Tories' roll to a comfortable majority ended a 14-year
Liberal hold on the province that saw Grimes as the last of four
Liberal Premiers since 1989. However, Grimes ascension to the
Premier's office in 2001 had come at a high price through a
nasty and divisive leadership race. Election watchers reason
that Grimes was never was able to heal those wounds. Coupled
with a general mood on the part of the electorate for a change,
the combination spelled defeat even as Grimes was calling the
election. Another significant factor was the popularity of Tory
leader Williams, who like Grimes, took over his party in 2001.
A Rhodes scholar and successful business leader, Williams is
credited with single-handedly revitalizing the party and making
it a formidable alternative to the Liberals.

4. With the focus now on the future, Premier-elect Williams is
busy putting together his transition team and working out who
will sit in his cabinet. Of importance to U.S. interests will
be Williams' pick for heading up the Mines and Energy portfolio.
Given that the Tory platform contains some tough talk on seeking
greater control and ownership of energy resources and a new
offshore revenue arrangement with Ottawa, Williams can be
expected to pick one of the several seasoned veterans he has in
the Tory caucus to spearhead this task. While evidently
pleasing to the electorate, this commitment could very easily
spark a high profile battle with the federal government and
other provinces over issues such as jurisdiction of offshore oil
and gas exploration and development, local content in energy
projects and increased hydroelectric development in Labrador.

5. Comment: In voting overwhelmingly for a change in the
leadership of the province, the voters in Newfoundland-Labrador
will be getting just that, a new look in government. Williams'
staff has been telling us all along that the new Premier is
deeply committed to making some solid improvement in the
province's economic status and wants to try ideas that have
never been tried before. Just how much that will affect
relations with Ottawa and the rest of the provinces is unclear
at this point. What is perhaps more certain is Williams'
reputation for not backing down on any issue, especially those
that he views as having the potential to improve
Newfoundland-Labrador's situation relative to the rest of
Canada. END COMMENT


HILL

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