VZCZCXRO0702
PP RUEHGA RUEHHA RUEHMT RUEHQU RUEHVC
DE RUEHOT #1027/01 2132133
ZNR UUUUU ZZH
P 312133Z JUL 08
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC PRIORITY 8272
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE

UNCLAS SECTION 01 OF 02 OTTAWA 001027 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV CA
SUBJECT: CONSERVATIVES SETTING THE STAGE FOR THIS FALL 
 
Ref: A.  OTTAWA 1006 
-    B.  OTTAWA 886 
-    C.  OTTAWA 866 
 
¶1. (SBU) Summary:  Over the past two months, the Conservative Party 
has fine-tuned the Cabinet, shaken up its managerial team, and 
revamped communications strategy to re-group ahead of the return of 
Parliament in mid-September.  The new look was on display at the 
Conservative caucus summer policy retreat in Levis, Quebec on July 
30 and 31, notably by allowing Cabinet ministers much greater 
inter-play with the media.  These changes appear part of renewed 
efforts to re-position the party for the final phase of this 
minority government, to move forward on its policy agenda, and to 
ready itself for a possible fall 2008 federal election.  Although 
the main Conservative theme is that its focus remains on governing, 
Prime Minister Harper on July 30 again challenged Liberal leader 
Dion to "fish or cut bait" -- i.e., acquiesce in the Conservative 
agenda again this fall or face an election.  End summary 
 
SETTING THE PARTY LINE 
---------------------- 
¶2. (U) Conservative members of Parliament and other key party 
figures gathered in Levis, Quebec on July 30 and 31 for the annual 
summer caucus retreat.  Ministers publicly reiterated that the 
government is "on track" and will continue to advance its agenda to 
control spending, to provide prudent economic management, and to 
crack down on crime, while the party's priority is "governing." 
 
¶3.  (SBU)  The media welcomed a new Conservative approach to public 
relations in this year's caucus with the unusual access to key 
Ministers, a sharp contrast with the earlier tightly controlled 
events.  Defence Minister Peter MacKay briefed reporters on 
Afghanistan, insisting that NATO must send more troops to RC-South, 
describing the region as the "flashpoint" of the mission and 
insisting that Canada will not relent in pressing its partners to 
send more personnel.  Public Safety Minister Stockwell Day and 
Justice Minister Rob Nicholson praised the party's tough-on-crime 
agenda and pledged to pursue other new crime bills this fall, 
including on juvenile justice.  Finance Minister Jim Flaherty 
insisted that Conservative tax measures would add C$21 billion in 
"structural" economic stimulus to the economy this year, and held 
out the prospect of future tax reductions (not actual cuts) to 
assist Canadians with the rapid rise in the cost of living.  Senior 
Quebec minister Lawrence Cannon indicated that the government would 
extend greater economic autonomy to the provinces, such as offering 
a green light to a new labor mobility agreement between Quebec and 
France. 
 
NEW BLOOD 
--------- 
 
¶4. (SBU) The apparent new tactics follow a June Cabinet reshuffle 
(ref c) and the more recent shakeup of the managerial team in the 
Prime Minister's Office (PMO).  New Chief of Staff Guy Giorno took 
up his duties on July 1, succeeding long-term Harper loyalist Ian 
Brodie, who also helped plan the recent reorganization.  Giorno, a 
Toronto lawyer and former top aide to Conservative then-Ontario 
premier Mike Harris in the late 1990s, has a reputation as a smart, 
aggressive, and highly partisan political operator.  He moved 
swiftly to streamline reporting structures, to reduce the number of 
deputy chiefs of staff from three to one, and to replace some key 
personnel.  According to one senior PMO official, upon return 
recently from vacation, he found half of his colleagues fired or 
reassigned. 
 
¶5.  (SBU)  PM Harper also replaced his highly unpopular (with 
reporters, at least) Director of Communications, Sandra Bucker, with 
Kory Teneycke, the former director of the Conservative Resource 
Group.  Teneycke has garnered most of the credit for the more open 
QGroup.  Teneycke has garnered most of the credit for the more open 
caucus.  Pundits expect Teneycke and Giorno to do the heavy lifting 
to succeed in the immediate goal of winning the next federal 
election -- perhaps as early as fall 2008 but no later than October 
2009 -- as well as the longer-term objective of effecting a durable 
transformation of Canadian politics. 
 
READY - OR NOT? 
--------------- 
 
¶6.  (SBU)  In a speech that won widespread coverage nationally (but 
almost none in Quebec), PM Harper publicly called upon Official 
Opposition Leader Stephane Dion to "fish or cut bait" by either 
acquiescing in the Conservative Parliamentary agenda again this fall 
or by bringing the government down in an early confidence vote and 
then facing the electorate this fall.  The key test for both parties 
will their performances in the September 8 by-elections in Quebec 
and Ontario (ref a).  Dion continues to send mixed messages on his 
party's intentions.  He recently insisted in an interview that "I 
want to have elections yesterday," but he has also again emphasized 
that he will also choose a "good time" for an election, which might 
be any time "between the fall and October 2009."  PM Harper again 
tweaked Dion on July 31 for showing "poor judgment" in offering the 
 
OTTAWA 00001027  002 OF 002 
 
 
Liberals' carbon tax ("Green Shift") and vaguely warned the Liberals 
not to block the government's agenda this fall. 
 
¶7. (SBU) Comment:  The Liberals remain underfunded and poorly 
organized, while most Liberal candidates in the 2006 leadership race 
-- including Dion -- have not even yet repaid their debts.  The 
Conservatives have the more coherent policy agenda and the fatter 
bank account, but, having already accomplished most of their major 
agenda items (ref b), have few dramatic legislative achievements 
left for the upcoming parliamentary session, which will begin on 
September 15.  The shake-up within the PMO likely reflects the 
Conservatives' assessment that the government may well remain until 
the obligatory election date of October 19, 2009, under the 
assumption that -- somewhat to the Conservatives' chagrin -- the 
Liberals will continue not to call their bluff. 
WILKINS