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C O N F I D E N T I A L SECTION 01 OF 03 OTTAWA 000001 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 01/02/2018 
TAGS: PREL PGOV ECON SENV AF CA
SUBJECT: CANADA'S POLICY PRIORITIES FOR 2008 
 
REF: A. 07 OTTAWA 1928 
 
     ¶B. 07 OTTAWA 1924 
 
Classified By: CDA Terry Breese, reason 1.4 (d) 
 
¶1. (C) Summary:  The government of Prime Minister Harper 
intends to maintain a steady course in implementing the 
policy priorities of the October 2007 ""Speech from the 
Throne"" (reftels), while the Conservative Party's minority 
status in both Houses of Parliament makes demonstrable 
progress problematic.  The government is determined to find a 
way to win Parliamentary support for an extension of the 
Canadian Forces' mission in Afghanistan beyond February 2009, 
and counts on help from the upcoming recommendations of the 
Manley Panel.  With polls showing climate change as the 
biggest single issue for voters, the government is striving 
to come up with some tangible new policies, and likely looks 
to forming a solid front with the U.S. and other major 
economies in charting a common course.  In the wake of the 
January 1, 2008 cut in the GST, the government's tax-cutting 
days are over for the present, and declining surpluses may 
make the budget leaner in 2008 - and more difficult to pass. 
Key legislation on terrorism and crime remain in Parliament, 
but probably have sufficient support in both Houses to pass, 
unless there is a spring election.  The government has 
pledged to pursue strengthened copyright legislation early in 
2008, but it, too, will face tough prospects.  The government 
plans a new strategy in 2008 to strengthen Canada's presence 
in the Arctic, a popular issue.  However, virtually all 
political pundits are already looking for signs of federal 
elections, with the only real debate now as to whether they 
will come in the spring or the fall of 2008.  End Summary. 
 
PURSUING A CONSISTENT AGENDA 
---------------------------- 
 
¶2. (C) Twenty-three months after taking office, the minority 
Conservative government under Prime Minister Stephen Harper 
has made some progress in advancing a consistent policy 
agenda focused on incremental change in limited priority 
areas:  delivering ""clean"" and accountable government, tax 
cuts, reinvesting in defense, bolstering Canada's northern 
sovereignty, promoting national unity, and raising the 
profile of Canada's role abroad through its combat mission in 
Afghanistan, contribution to stabilization in Haiti, and 
renewed partnership with the Americas.  However, it has had 
less success in pushing through a tough crime agenda, 
achieving a sustainable environment, ensuring democratic 
(Senate) reform, and introducing comprehensive copyright 
legislation.  Meeting these objectives, and determining the 
future of Canada's mission in Afghanistan, will be the themes 
of Parliament's upcoming sitting, with the House of Commons 
returning on January 28 and the Senate on January 29. 
 
WINNING SUPPORT FOR THE AFGHAN MISSION 
-------------------------------------- 
 
¶3.  (C) PM Harper has made clear privately and publicly that 
the government believes Canadian Forces should remain in 
Afghanistan until at least 2011, while acknowledging that 
Parliament will need to approve any extension of the mission 
beyond February 2009 (although such a vote is not a 
Constitutional requirement).  The government is clearly 
counting on tangible recommendations from the independent 
Manley Panel in late January that could improve the political 
QManley Panel in late January that could improve the political 
climate on this issue and broaden domestic support, but the 
late December death of another Canadian soldier (the 30th in 
2007 and 74th overall) as well as instability in Pakistan 
complicate this goal.  In an ideal world, Canada would like 
to inform NATO allies of Canada's decision at the 2008 NATO 
Summit in Bucharest on April 27, but it appears increasingly 
possible that the Parliamentary vote may not take place until 
as late as May (even assuming the government remains in 
place).  Harper wistfully admitted in a year-end interview 
that ""I don't know whether Canadians do - or don't - 
understand"" the importance of remaining involved in 
Afghanistan and what is at stake.  The government's key 
challenge is to get them to understand - and soon. 
 
PLACATING FEARS ABOUT ENVIRONMENT 
--------------------------------- 
 
¶4. (C) Climate change remains - according to polls - the 
single most important issue to voters, but the government has 
yet to convince the voting public that its policies are 
 
OTTAWA 00000001  002 OF 003 
 
 
effectively addressing climate change or that it is best 
suited to handle the issue.  While the performance of 
Environment Minister John Baird at the UN climate change 
conference in Bali won mostly negative reviews at home, 
Canada seems certain to continue resisting calls for 
near-term emissions reduction targets that it deems are too 
aggressive for its economy.  Domestically, the government 
will continue to push a patchwork of energy efficiency and 
alternative fuels programs while it struggles to devise, 
implement, and enforce nationwide emissions standards.  The 
Conservatives' most effective claim to the voters - so far - 
is that the Liberals had a weak record in meeting Kyoto 
commitments and protecting the environment while in office. 
Harsher than usual winter weather in late 2007 and early 2008 
may, ironically, help the government to kick this can a 
little further down the road and give its programs more 
opportunity to achieve noticeable progress in the run-up to 
eventual elections. 
 
ECONOMY AND THE BUDGET 
---------------------- 
 
¶5.  (SBU) PM Harper has claimed that the Canadian economy is 
""arguably the strongest in three decades.""  He was able to go 
ahead with a long-promised second cut in the federal GST, now 
down to 5 pct.  Concerns remain high, however, about the 
longer-term effects of a U.S. slowdown, including possible 
job losses in Canada.  PM Harper has already indicated that 
no more tax cuts are forthcoming for the foreseeable future. 
At the same time, the government will need to deliver its 
third federal budget to Parliament in February or March, and 
its passage is by definition a confidence vote.  The 
Conservatives need the support of at least one other party to 
pass the budget.  The government already used up most of its 
fiscal flexibility in its Fall Economic Statement, which 
provided C$60 billion in broad-based personal, corporate, and 
sales tax relief over five years, and which Parliament 
approved in December.  The cuts will put tax savings in 
voters' hands in time for spring tax-filing season.  The 
willingness of opposition parties to support or abstain on 
the government's budget will probably decrease this year, 
however.  The budget may contain regionally targeted 
initiatives, such as aid for the Ontario and Quebec 
manufacturing and forestry sectors, aimed at garnering the 
support of the Bloc Quebecois.  PM Harper will meet with 
provincial premiers on January 11, at which time he will 
likely explain these upcoming initiatives, which he 
undoubtedly hopes will win some support for the budget. 
 
PASSING TERRORISM AND CRIME BILLS 
--------------------------------- 
 
¶6.  (SBU) Parliament will have to move quickly to pass 
amendments to Canada's system of immigration security 
certificates in order to meet a February 23 deadline from the 
Supreme Court of Canada, or face the mandatory elimination of 
the use of these certificates.  The bill still faces 
additional debate in the Commons and must also pass the 
Senate before that deadline, but has broad support given that 
it follows the Court's guidelines on how better to balance 
civil rights and national security.  A bill to revise the 
Anti-Terrorism Act will be more controversial.  Introduced 
first in the Senate and still in committee, the bill would 
Qfirst in the Senate and still in committee, the bill would 
restore two powers - investigative hearings and preventive 
arrest - that were subject to sunset clauses and lapsed in 
February 2007 when Liberal MPs voted against extending them. 
This time, however, the Liberals have promised to approach 
the bill with no ""preconceived bias."" 
 
¶7.  (SBU) Tackling crime has long been a central plank in the 
Conservatives' platform, but the their ""safe streets"" agenda 
has proved difficult to push through Parliament.  Five 
flagship crime bills introduced in 2006 all failed to pass. 
In October 2007, the government grouped all five bills 
(including some revisions reflecting opposition concerns) 
into a comprehensive ""Tackling Violent Crime"" bill that would 
establish mandatory prison sentences for serious gun crime, 
toughen bail provisions for serious firearms and other 
weapons offenses, make it easier to designate someone a 
dangerous offender, crack down on drug and alcohol-impaired 
driving, and raise the age of sexual consent to 16 years. 
The bill passed the House of Commons without amendment and is 
now in committee in the Senate.  Its fate may rest on 
election timing.  Liberal senators (who form a majority in 
the upper house) may have an incentive to hold the bill up in 
 
OTTAWA 00000001  003 OF 003 
 
 
the short term to avoid handing an election eve gift to the 
Conservatives if it looks like the government may not last 
long into 2008.  However, if the government continues to 
survive for the foreseeable future, the Liberals will want to 
avoid being tagged as ""soft on crime"" and the Senate will 
probably also pass the legislation. 
 
COPYRIGHT REFORM 
---------------- 
 
¶8.  (SBU) After failing to introduce stronger copyright 
legislation in the fall 2007 session as expected, the 
government now plans to introduce a major copyright reform 
bill after Parliament returns in late January.  The 
government has expressed confidence that the revised 
legislation will both placate both domestic concerns and meet 
international standards.  Despite calls for stronger 
copyright protection from two parliamentary committees in 
2007, recent grassroots opposition nonetheless makes passage 
of this legislation rough sledding ahead. 
 
ARCTIC IMPROVEMENTS 
------------------- 
 
¶9.  (SBU) Voters remain concerned about the Arctic, and the 
public has been broadly supportive of the government's 
ongoing efforts to assert Canadian sovereignty and to improve 
its ability to defend its Arctic interests.  Especially 
popular were programs to modernize Halifax-class frigates, to 
purchase new Arctic patrol ships, to deploy additional 
Canadian Rangers, and to develop a deep water port in the far 
North.  The government will announce a ""Canada First"" defense 
strategy early in 2008 further to demonstrate its attention 
to this issue, as well as to bolster its long-term military 
modernization program, including purchases of four C-17 
Globemaster strategic airlift aircraft, 17 C-130 Hercules 
tactical airlift aircraft, 16 CH-47 Chinook Helicopters, 
modern Leopard tanks, and heavy trucks.  The new strategy may 
include purchases of new search-and-rescue aircraft and 
utility planes, as well as unmanned aerial vehicles, for 
Arctic coverage and an improved Arctic underwater 
surveillance system. 
 
 
BUT THE BAD NEWS IS... 
---------------------- 
 
¶10.  (C)  Even with a recent poll showing 92 percent of 
Canadians optimistic that 2008 will be a good one for them 
personally (up from 88 heading into 2007) and 80 percent 
optimistic about Canada's prospects in the new year, the 
government still faces a tough year ahead.  The Conservatives 
have come off a difficult late fall, during which their 
support drifted from a high of 42% in early November to a low 
of 30% in mid-December.  However, the opposition parties -- 
especially the Liberals -- have not been able to gain much 
traction so far.  This has not prevented the Liberals and New 
Democratic Party from stepping up their election rhetoric, 
with Liberal leader Stephane Dion warning voters to prepare 
to vote in 2008.  The government's already tenuous ability to 
manage a fractious parliament from a minority position will 
face even more challenges in 2008.  Increasingly, the chatter 
in political circles is not over whether there will be new 
federal elections in 2008, but rather about when - spring or 
fall?  The growing prospects of upcoming elections make 
passage of any major new legislation or adoption of any major 
new policies extremely problematic, leaving the Conservatives 
in somewhat of a caretaker role.  However, PM Harper has 
Qin somewhat of a caretaker role.  However, PM Harper has 
shown himself an adept and shrewd parliamentary tactician, 
and the Conservatives retain the advantage of clarity and 
consistency on major issues, mostly in sync with U.S. 
priorities and interests. 
 
Visit Canada,s Economy and Environment Forum at 
http://www.intelink.gov/communities/state/can ada 
 
BREESE