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

151701Z Jul 03

UNCLAS SECTION 01 OF 02 OTTAWA 001996 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL CA
SUBJECT:  CANADA'S PROVINCIAL PREMIERS TAKE A STAND 
 
 
¶1.  Summary:  Canadian premiers met for their annual 
conference on July 9-11 at Charlottetown, Prince Edward 
Island (PEI).  The tone was upbeat.  The premiers went 
beyond the ritual criticism of federal heavy-handedness and 
demands for more funding out of Ottawa and focused on ways 
to make their collective voice better heard.  Their 
frustration over the perceived domination by Ottawa of the 
common agenda provided impetus for their proposal for a new 
Council of the Federation, a regular gathering of the 
provincial and territorial premiers to hammer out common 
positions on the major shared issues facing the provinces 
and territories.  The premiers, buoyed by the welcome 
participation of the newly elected federalist Premier of 
Quebec, Jean Charest, have taken an impressive first step 
toward the establishment of a more balanced consensual joint 
governance.  The GOC has not given the proposed Council much 
consideration, as new leadership will soon take command and 
have to deal with the challenge.  End Summary. 
 
¶2.  Canada's provincial and territorial premiers met July 9- 
11 in Charlottetown, PEI, for their annual gathering. Three 
main themes dominated the discussion:  provincial/federal co- 
operation, the role of the premiers in Canadian-U.S. 
relations, and a more equitable sharing of federal- 
controlled resources in support of provincial 
responsibilities.  The highlight was the group's attempt, 
led by newly elected Quebec Premier Jean Charest, to inject 
more provincial input into the national agenda, heretofore 
largely dominated by the federal government.  The vehicle is 
to be a newly created "Council of the Federation."  The goal 
is to give the premiers a forum to discuss and hash out 
common positions on key Canadian issues under their purview 
and, as a result, reassert provincial prerogatives.  The 
thirteen premiers will initially meet alone, excluding the 
Prime Minister and the federal government until the Council 
decides to invite them.  It is particularly noteworthy that 
the impetus for this initiative was the newly elected Quebec 
Premier, Jean Charest, a federalist without the anti-federal 
baggage of some previous Quebecois premiers.  This 
impressive display of national leadership from Quebec bodes 
well for inter-provincial cooperation vis-a-vis Ottawa, 
which has been impeded for at least the past decade by 
Quebecois determined non-participation. 
 
¶3.  The Council intends, most basically, to improve federal 
and provincial co-operation.  It is a renewed expression of 
provincial strength and unity that may replace the annual 
premiers' meetings.  The exuberant premiers termed the 
establishment of the Council (which, however, will not 
require an amendment to the Canadian Constitution) as 
approaching in importance the historic 1864 meeting in 
Charlottetown, which set the basic outline for the creation 
of the Canadian Confederation.  Despite the headlines, 
however, it is very much a work in progress, and it is far 
from clear what the Council will do for the ordinary 
citizen.  The follow-up meeting of the premiers and 
territorial leaders on October 24 in Quebec City will 
indicate what kind of legs, if any, the Council has.  It 
will meet perennially and likely have a small secretariat to 
help organize the agenda, but will primarily serve the role 
of a think-tank to help the premiers focus on and consult 
over such issues as health care, inter-provincial trade, and 
mobility rights. 
 
¶4.  The premiers also discussed their potential role in 
Canadian-U.S. relations.  International affairs have not 
fallen within provincial jurisdiction in the past, but they 
argued that they can act as effective interlocutors with 
their counterparts in the U.S. states.  The Canadian federal 
government, they argue, could use help on the various issues 
that affect the provinces and territories directly, such as 
BSE-related embargoes of Canadian beef, softwood lumber, 
pipeline construction, cross-border pollution, SARS, wheat 
exports, and fisheries.  They contend the governors and 
legislators, including Federal Senators and Congressmen from 
U.S. states that have similar issues, would be more likely 
to be receptive to their arguments than Washington. 
 
¶5.  The flow of funding from the federal government to the 
provinces has been a constant source of friction. 
Constitutionally, the federal government has greater tax 
powers, but the provinces have the responsibility for 
providing costly services such as roads, health insurance, 
and education.  Typically, after such gatherings, the 
meeting ended with a call for Ottawa to inject an already 
promised C$3 billion into the healthcare system over the 
next two years and to make good on federal promises to top 
this up with some C$2 billion in surplus revenues projected 
for the current year. 
 
¶6.  Comment:  To claim that the creation of the Council of 
the Confederation will represent a serious challenge to 
federal authority would greatly overstate the meaning of the 
recent provincial premiers' meeting.  However, Premier 
Charest, throwing Quebec's newfound federalist weight into 
the mix, has energized his provincial colleagues and has set 
in train an interesting and potentially significant positive 
development.  This fresh attempt to redefine federal- 
provincial relations, while it may come too late to be 
implemented by the outgoing Prime Minister, will pose his 
successor with an interesting option.  Will he (or she) be 
tempted to underplay this potential challenge to federal 
authority, or be tempted to deal with it in a positive, 
creative manner, one which might well lead toward a 
constructive redefinition of the federal-provincial 
partnership?  Prime Minister Chretien has not responded to 
the proposed Council of the Federation; however, Liberal 
Party leader Paul Martin, the suspected future PM, continues 
to give this proposal thoughtful consideration.