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Cablegate: Embassy Ottawa

VZCZCXRO6324
OO RUEHGA RUEHHA RUEHMT RUEHQU RUEHVC
DE RUEHOT #0719/01 2581945
ZNR UUUUU ZZH
O 151945Z SEP 09
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9849
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 OTTAWA 000719

SIPDIS

SENSITIVE

E.0. 12958: N/A
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
----------------------------------

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?
----------------------------------

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
--------------------


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
---------------------------------

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

OTTAWA 00000719 002 OF 002


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

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