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UNCLAS SECTION 01 OF 02 HALIFAX 000092 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR WHA/CAN 
 
E.O. 12958: N/A 
TAGS: PGOV ETRD ECON CA
SUBJECT: NOVA SCOTIANS OFF TO THE POLLS IN A JUNE PROVINCIAL 
ELECTION 
 
REF: A)  HALIFAX 35; B)  HALIFAX 90 
 
HALIFAX 00000092  001.2 OF 002 
 
 
SENSITIVE BUT UNCLASSIFIED -- PROTECT ACCORDINGLY 
 
¶1.  (SBU)  SUMMARY:  Conservative Premier Rodney MacDonald has 
called a provincial election for June 13.  Issues of potential 
bilateral interest will be: offshore energy and liquefied 
natural gas (LNG) policies, subsidies to forest products 
companies, legislation aimed at shielding personal data from USG 
access and enhanced ferry service to the U.S.  Although 
MacDonald's early poll numbers look good, don't count out Nova 
Scotia's New Democrats, who have a decent shot at forming the 
first NDP government in Atlantic Canada.  END SUMMARY 
 
¶2.  (SBU)  In what was the worst kept political secret of the 
year, on May 13 Tory Premier Rodney MacDonald called an election 
for June 13.  Although there are over two years left in the 
mandate that MacDonald inherited from former Premier John Hamm, 
MacDonald has been anxious to put his own stamp on the 
legislature.  In addition, the rookie Premier, who has been on 
the job since February, wants to end the increasingly cumbersome 
and weakening coalition that Hamm had skillfully forged and run 
with the two opposition parties to keep the government afloat 
and pass key legislation (ref A).  The 2003 election left the 
Tories without a majority and they hold only 25 of the 52 seats 
in the provincial legislature.  The official opposition New 
Democrats have 15, while the third-place Liberals have 10. 
Currently, there is one vacancy in the Legislature and one 
member sits as an Independent, a former Liberal who previously 
indicated that he would run as a Conservative when an election 
came. 
 
¶3.  (SBU)  Also influencing the Premier's decision to call the 
election is his standing in public opinion polls. 
Election-watchers believe that if his numbers hold at their 
current 39% level, MacDonald could walk away with a majority 
government.  However, these are early predictions that do not 
take into account how the two opposition parties will structure 
their campaigns and what the response from the electorate will 
be.  While Macdonald can be expected to craft a platform focused 
heavily on the Tory record under the well-respected John Hamm, 
he has also tried to out-flank the NDP by introducing a 
relatively free-spending budget that takes several items from 
the New Democrats' platform, including a tax rebate on heating 
fuel. 
 
¶4.  (SBU)  From the opposition side, the NDP, behind leader 
Darrell Dexter, will try to sell the party as a viable and 
experienced alternative to the Tories.  We can expect Dexter to 
make a strong effort to keep the momentum going for his party 
which just a few short years ago was in a distant third-place 
position in the province.  NDP officials have their eye on the 
history books -- if they succeed in forming a government it will 
be the first for the party in Atlantic Canada.  For Liberal 
Francis Mackenzie, who observers generally agree has had a 
lackluster tenure as party leader so far, the main challenge 
will be to keep the 10 seats he now has, plus ensure that he can 
win election himself and get his own seat in the House. 
 
¶5. (SBU)  Issues in the campaign undoubtedly will be the basic 
bread-and-butter items such as health, education, the size of 
the provincial debt and creating a more favorable climate for 
business and industry.  Four issues likely to emerge that will 
be of interest to the United States are:  the energy sector, 
subsidies for forest products companies, privacy legislation and 
transportation. 
 
--  ENERGY:  Whoever forms the government will need to deal with 
declining interest in Nova Scotia's offshore energy resources, 
which have proven harder to find and produce than expected.  The 
MacDonald government is committed to moving ahead on development 
of offshore energy and is also looking at expanding LNG 
facilities in the province.  The other parties can be expected 
to come up with own ideas in these areas which will probably 
take until the campaign gets fully underway. 
 
--  SUBSIDIES:  The government has already proposed paying paper 
maker Stora Enso C$65 million over six years to help it keep 
operating a plant in Cape Breton, a high unemployment area and 
the Premier's home region (ref B).  In addition, the government 
announced the day before the election that it would buy land 
valued at C$26 million from Bowater Mersey, a paper 
manufacturer.  The Liberals have said that more needs to be done 
for Stora Enso, and other forest products companies have already 
started asking: "Where's mine?" 
 
--  PRIVACY:  Shortly before the election was called the 
government introduced legislation that aimed at keeping data on 
Nova Scotians held by U.S. data processing companies out of the 
 
HALIFAX 00000092  002.2 OF 002 
 
 
reach of the USG.  This issue has been important for the NDP as 
well so regardless of who wins the election we can expect to see 
new legislation proposed by the next government. 
 
--  TRANSPORTATION:  The issue of government help for improved 
or new ferry links from southwestern Nova Scotia to New England 
might emerge as an issue in those areas, especially in those 
districts where there are tight races. 
 
¶6.  (SBU)  COMMENT:  While the campaign is just starting, this 
seems certain to be a close and exciting race.  Of paramount 
interest will be how the new Premier handles himself in his 
first electoral campaign as the head of Nova Scotia's 
Progressive Conservatives.  The other big story will be whether 
the NDP can build on its improved standing in public opinion and 
win enough seats to form the government.  END COMMENT. 
HILL