Cablegate: Canada: Layton Pulls the Plug -- The Gomery Effect

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

072135Z Nov 05

UNCLAS SECTION 01 OF 03 OTTAWA 003317

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: CA PGOV PREL
SUBJECT: CANADA: LAYTON PULLS THE PLUG -- THE GOMERY EFFECT
ON THE PARTIES, ELECTION TIMING, KEY LEADERS, AND BILATERAL
RELATIONS

1. (SBU) Summary: NDP Leader Jack Layton announced today that
the NDP cannot express confidence in the Martin government,
and "the life of this Parliament is limited," after receiving
what he considered an inadequate Liberal response to NDP
concerns over creeping privatization in health care. Layton
did not go so far as to say when he would try to bring the
government down and the other opposition leaders were just as
cautious, but there is now a greater possibility of a
snap-election. This possibility is increased by the recent
sharp (albeit probably temporary) rise in Conservative
fortunes in the polls. For the U.S. this means further
distraction for a weak minority government in Canada, which
will remain in campaign mode for the foreseeable future. End
Summary

GOMERY REPORT PART I EXONERATES MARTIN
--------------------------------------

2. (SBU) Part I of the Gomery Inquiry was released November
1. The report, subtitled "Who Is Responsible?" attempts to
assign blame for the scandal while the second report, due out
February 1, will make recommendations on avoiding a similar
mishap in the future. The report essentially exonerates the
current government and, significantly, PM Martin, whom the
report stated was responsible as Finance Minister for setting
department budgets but not managing them. Former Prime
Minister Jean Chrtien and persons close to him took the bulk
of the blame for creating and operating the program in a way
that left it open to abuse. High-ranking members of the
Quebec Liberal Party and several Quebec advertising agencies
were also pegged with abusing the program for personal gain,
and in some cases to funnel money to the Quebec Wing of the
Liberal Party.

BUT SO WHAT
-----------

3. (SBU) The upcoming "recommendations" section of the report
was supposed to draw the greatest attention, but it appears
most observers, especially the opposition parties, are more
than satisfied to attack the Liberal Government now. It also
appears that the Canadian people are not letting the PM off
the hook, at least not in the short term. A poll released
over the weekend conducted by the Strategic Counsel for the
Globe and Mail and CTV news showed the Conservatives ahead at
31 percent and the Liberals at 28 percent, with the NDP also
up to 20 percent and the Bloc steady at 12. (Polling data
from three weeks ago had the Liberals at 38, Conservatives at
25, and NDP at 17). Results in Ontario put the Conservatives
at 35, Liberals at 37, and NDP at 20, also a significant
slippage for the Liberals.

4. (SBU) Significantly, 60 percent of respondents do not
accept the findings that PM Martin was not involved, and 71
percent believe that Martin should be held accountable. Also
of interest, both parties are given equally low marks for
their ability to clean up the mess (20 percent each). But
regardless of how they feel about Liberal culpability for the
affair, 60 percent of respondents support the idea of waiting
until the 2d report is issued before going to the polls. It
would take a lot of scandal to get people here to support a
deep winter election.

DOES IT GET ANY BETTER THAN THIS?
---------------------------------

5. (SBU) What the opposition parties will do with this
scandal-driven traction is still an open question. According
to Strategic Counsel Chairman Allan Gregg, "the temptation to
defeat the government will be overwhelming, since the
opposition parties know that when the issue fades, their
fortunes will fade with it." Indeed there seems to be new
enthusiasm and some buzz coming from the Conservatives about
defeating the government, although just when and how to do so
is still under review.

6. (SBU) Stephen Harper has stated that he will not bring the
government down without the NDP on board, presumably because
he doesn't want to be painted as being in narrow coalition
with the separatist Bloc. He was in Montreal November 7
trying to convince Quebec federalists that the Conservatives
are a viable option for those who cannot stomach the Bloc.
This comes on the heels of a proposal November 4 for
improving government ethics -- a Federal Accountability Act
that would implement a series of measures to clean up the
ties between private money and lobbyists and politics. The
Bloc has said it does not want to see a winter election but
was otherwise quiet about its intentions until today.

NDP ASSUMES THE OPPOSITION HELM
-------------------------------

7. (SBU) The decision then rested with Jack Layton and the
NDP. In a speech November 7 Layton answered a letter from
Health Minister Dossanjh outlining the government's offer to
support the NDP health care position by saying that "what the
government is proposing is unacceptable." While stopping
short of stating how and when he would seek to bring the
government down, Layton said that he "does not believe there
are grounds to go forward" with the Liberals and "the life of
this Parliament is limited." He suggested that the Canadian
people should not have to wait for months to bring the
government to account for sponsorship. After the speech
Layton clarified that the NDP could not support the Liberals
in a confidence motion. Political Analyst Keith Boag said he
didn't see much room for future Liberal negotiations with
Layton over the issue, although some have suggested that it
may be a ploy to gain more leverage. This will be clear
within the next day or two.

8. (SBU) The Conservatives reacted cautiously to the
announcement (in part because Harper spoke without having
seen it), while the Bloc confirmed that if the other two
opposition parties got their act together to defeat the
Liberal government, his party would definitely not support
the Liberals. The issue now is when a confidence motion
could actually come to the floor. The Conservatives have an
Opposition Day on November 15 which has a no-confidence
motion waiting on the order paper. Harper had said he would
only go through with this if supported by the NDP. The Bloc
has its Opposition Day on the 17th and the NDP on the 24th.
But the Liberals have been conducting a filibuster of the
Commons process over a Bloc Quebecois mailing on the
Sponsorship program that could push back some or all of these
Opposition Days. The next key date will be December 8 when
there is vote on the spending supplemental which will be a
firm confidence vote.

TIMING IS EVERYTHING
--------------------

9. (SBU) All of the parties are trying in all of this to
avoid being responsible for bringing on an election in "deep
winter." The worst case would be responsibility for bringing
the election on during the Christmas season, but anything in
January would be only slightly less unpopular. It is,
however, quickly getting to the point where it will be
difficult for the opposition parties to maneuver to avoid a
crash by supporting the government as they did for a time in
the spring to avoid a summer election. If the NDP does not
walk back from today's gauntlet quickly, all three parties
will be on record as not supporting the government, and there
are no numbers games that could avert a fall in that case.

10. And even if the NDP were brought back in the fold, the
numbers are currently not in the government's favor. If
everyone votes (i.e. no illnesses), and the Independents
split 2-2, the Conservatives and Bloc have the votes to bring
down the government) The breakdown is:

Liberals 133 (minus the Speaker who only votes in a tie)
NDP 18
151

Conservatives 98 (three members are ill enough to
possibly miss a vote)
Bloc 54
152

Independents 4 (former Liberals Carloyn Parrish, David
Kilgour, and Pat O'Brien, and former NDP member Desjarlais;
in the last confidence vote Parrish and Desjarlais, the
latter still in the NDP, voted with the government, Kilgour
and O'Brien voted against)

Vacancy 1

CANADA'S NEW REALITY SHOW -- LIBERAL SURVIVOR
---------------------------------------------

11. (SBU) The Liberals will be scrambling over the coming
days to devise a survival strategy. Speaker Milliken
indicated to Ambassador that it would be possible using the
filibuster to avert the demise of the government; we
certainly saw in the last term that the Liberals have an
excellent capacity to manipulate the calendar. Finance
Minister Goodale is scheduled to give an annual economic
update on November 14 in which he is expected to highlight PM
Martin's current and future good stewardship of the economy
in what he calls a prosperity plan -- showing that the
Liberals have a viable strategy for the future by promoting
education and skills training, infrastructure, and research
and development. He could still include tax cuts and
spending as well. PM Martin has suggested, in what sounds a
bit desperate, that the country would not be well-served by a
government crash in the midst of its hosting of the climate
change conference. But it is difficult to see how they can
avoid the moment of truth over the
budget vote in early December, and if the NDP doesn't back
down fairly quickly and come back to the table, it is equally
difficult to see how it would endure.

U.S. INTERESTS
--------------

12. (SBU) For the U.S. this means simply that the Martin
government is far less stable and able to focus at the end of
the day November 7 than it was when at the start of the day.
It will for the near future be consumed with its own survival
and virtually incapable of pursuing ambitious or far-reaching
policies. Every initiative or change of policy course will
be vetted through the lens of political calculation. If
there is a campaign, all sides will need to keep a healthy
distance from the United States, and the Liberals and
Conservatives will also need to show the ability to work with
the U.S. on shared issues while standing up to the Yankees
during disputes. It is not clear whether issues like
softwood will be a direct campaign prop, but it has of late
faded into the background. Who could gain points from it
during a campaign is also not clear -- the Conservatives
could presumably beat up the Liberals for not having the kind
of relationship with the U.S. that would allow them to solve
such disputes, while the Liberals could try to show strength
by ratcheting up the rhetoric. But the campaign will be
fought over the single issue of simple government
accountability, and both sides will probably have their hands
full managing that one topic.

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