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. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS