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PP RUEHGA RUEHHA RUEHMT RUEHQU RUEHVC
DE RUEHOT #0884/01 1792106
ZNR UUUUU ZZH
P 272106Z JUN 08
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC PRIORITY 8112
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE

UNCLAS SECTION 01 OF 04 OTTAWA 000884 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON PTER SOCI CA
SUBJECT: A CONSERVATIVE SCORE-CARD: A SOLID B+, BUT NO GOLD STAR 
 
Ref A: OTTAWA 833 
Ref B: 07 OTTAWA 1928 
Ref C: OTTAWA 866 
 
¶1. (SBU) Summary.  Two-and-a-half years into its mandate, the 
minority Conservative government is effectively implementing its 
policy agenda and delivering on core pledges to rebuild Canada's 
armed forces, tackle violent crime, and cut taxes.  The extension of 
Canada's combat mission in Afghanistan to 2011 and the weakness of 
the Liberal official opposition defined the spring sitting of 
Parliament.  The Conservatives capitalized on the opposition vacuum 
to push through far-reaching budget, justice and immigration changes 
under threat of an election, although a bill to strengthen the 
Anti-terrorism Act is still pending in the Commons and the 
government has yet to deliver a promised formal statement on 
national security.  The Conservatives plan to stick with the same 
formula for the fall, but the Liberals have nailed their colors to a 
new carbon tax (ref A) in the hope of reshaping the national debate 
on their terms.  The tax is a "Hail Mary", sink or swim proposition 
for Liberal leader Dion and one that will make an already volatile 
political situation even more uncertain.  End summary. 
 
"A RECORD OF ACHIEVEMENT" 
--------------------------------------------- 
 
¶2. (U) PM Harper lauded the Conservative government's record during 
the spring sitting that ended on June 20 as "a remarkable record of 
achievement," especially given the opposition's prior vow to defeat 
key policies.  Harper repeatedly used the threat of an election to 
force the official opposition Liberals to swallow policies they 
opposed.  Liberal leader Stephane Dion practiced what he called 
"strategic patience," offering up only a handful of Liberal MPs to 
vote on 42 major and minor confidence votes since October while the 
remainder of his caucus sat on their hands.  In the short-term, the 
strategy hurt Dion's credibility and allowed the Bloc Quebecois and 
New Democratic Party (NDP) to posture with impunity.  However, after 
the economy slowed in the spring, and the Conservatives became 
distracted by minor scandals, Dion was given some credit for buying 
time. 
 
¶3. (U) The Conservative agenda as set out in the October Speech from 
the Throne (ref B) eschewed a "Big Bang" policy approach and focused 
on five achievable priorities: strengthening Canadian sovereignty 
and Canada's international role, delivering effective economic 
leadership, tackling crime, building national unity, and improving 
the environment.  The focus on practical deliverables bolstered the 
government's claim that it was "getting the job done" and keeping 
its promises as it methodically ticked items off the list.  Taken 
cumulatively, the government made significant progress on a broad 
range of issues consistent with Harper's stated objective of 
bringing about incremental, but fundamental, change to how Canada 
works. 
 
AFGHANISTAN, DEFENSE, AND NATIONAL SECURITY 
--------------------------------------------- 
 
¶4. (U) The Conservatives' signal achievement was the crafting of a 
bipartisan consensus to extend Canada's combat mission in 
Afghanistan to 2011.  PM Harper's ability to build bridges in a 
minority parliament was an act of statesmanship that belied the 
perception that the present minority situation is inherently 
dysfunctional.  It demonstrated a degree of flexibility on the part 
of the government and of the official opposition that was unmatched 
on any other issue.  The government followed this success with 
efforts to secure helicopters and aerial drones for the mission -- 
as per the conditions of the extension -- which are ongoing.  On 
Qas per the conditions of the extension -- which are ongoing.  On 
June 10, Canada pledged an additional $600 million in development 
aid to Afghanistan, bringing total Canadian aid between 2001 and 
2011 to $1.9 billion. 
 
¶5. (U) In May, the Conservatives announced their Canada First 
Defence Strategy to expand the regular Canadian Forces to 70,000 and 
the Reserve Force to 30,000, improve key military infrastructure, 
increase overall Canadian Forces readiness, and proceed with major 
combat fleet replacements of surface combat ships, maritime patrol 
craft, fixed-wing search and rescue aircraft, fighter aircraft, and 
land combat vehicles and systems.  The Strategy complemented steps 
the government had already taken to rebuild the Canadian Forces, 
including new investment in Arctic defense to bolster Canadian 
sovereignty in the North, and a commitment in the 2008 Budget to 
stable, predictable funding with annual increases in defense 
spending of two percent starting in 2011-2012 that will provide an 
additional $12 billion over 20 years.  However, systemic bottlenecks 
in the procurement process have hampered progress on materiel and 
recruitment targets. 
 
 
¶6. (U) The government enacted revised immigration security 
certificate legislation in February to better balance national 
security with the Charter of Rights.  It has also introduced 
amendments to the 2001 Anti-terrorism Act to reinstate powers to 
 
OTTAWA 00000884  002 OF 004 
 
 
compel testimony at investigative hearings and permit preventive 
arrest that expired under automatic sunset clauses in February 2007. 
 The bill -- introduced first in the Senate -- has passed the upper 
House, and is pending in the Commons.  It should pass the Commons in 
the fall, unless Parliament is prorogued or there is an election. 
 
 
THE ECONOMY AND COPYRIGHT 
--------------------------------------------- 
 
 
¶7. (U) The Conservatives have rested their claim to be prudent 
fiscal managers on tax cuts and debt repayment. To combat the 
slowing economy, they delivered $60 billion over 5 years in 
individual and corporate tax cuts in October, including an 
earlier-than-expected second cut to the GST sales tax to 5 percent. 
The 2008 Budget introduced a Tax-Free Savings Account aimed at the 
middle-class and allocated $10.2 billion to debt reduction.  When 
added to locked-in spending commitments to the armed forces and to 
the provinces in the 2007 budget, the effect of the Conservative tax 
cuts has been to profoundly constrain the fiscal capacity of future 
governments to spend on new programs.  The 2008 Budget projected 
only a razor-thin operating surplus of $1.3 billion in 2009, the 
smallest since 1998.  Responding to calls to do more to assist 
displaced workers in central Canada's hard-hit manufacturing and 
auto industries, the government established a $1 billion trust fund 
for manufacturing and resource communities in January. 
 
¶8. (U) The Conservatives signed a Free Trade Agreement with the 
European Free Trade Association in January, and, as part of Canada's 
renewed engagement with the Americas, concluded negotiations for a 
FTA with Peru in January and with Colombia in June.  They have also 
appealed to women and families with bills to improve product and 
food safety and to stiffen regulations for made-in-Canada labeling 
to bolster the agricultural sector. 
 
¶9. (U) The Conservatives introduced a bill to amend the Copyright 
Act, a key USG priority, on June 12.  However, initial reaction in 
the media and the internet community has been negative, and all 
three opposition parties have made statements critical of the bill, 
making its future in the Commons uncertain. 
 
IMMIGRATION, JUSTICE AND ABORIGINAL AFFAIRS 
--------------------------------------------- 
 
¶10. (U) In spite of controversy, the government used the 2008 Budget 
as a back-door channel to change immigration policy, granting the 
Minister of Immigration discretionary authority to fast-track 
applications for specific categories of immigrants.  By folding this 
authority into the Budget bill -- an automatic confidence matter -- 
the Conservatives overrode charges that the changes are unfair to 
those already in line, allow the government to cherry-pick 
immigrants, and threaten to politicize the immigration process. 
They argued the changes are necessary to cut wait times of up to six 
years and bring in the skilled immigrants Canada needs when it needs 
them.  Stephane Dion has promised to repeal the changes, but the 
Liberals no longer own the immigration issue in Canada, nor can they 
continue to count on immigrants as a rock-solid base of support. 
Immigrant communities themselves are divided on the changes and a 
May poll suggested the Conservatives may be on the right track; 85 
percent of respondents thought it was important to select immigrants 
whose skills fit the needs of the workforce. 
 
¶11. (U) The Conservatives have made significant progress on their 
flagship "safe streets" justice agenda, enacting their key Tackling 
Violent Crime Act in February, a compendium of five earlier justice 
QViolent Crime Act in February, a compendium of five earlier justice 
bills raising the age of sexual consent, increasing penalties for 
impaired driving, cracking down on dangerous offenders and bail 
provisions, and imposing mandatory minimum sentences for serious gun 
crime.  The government has also introduced new bills targeting 
property, auto and identity theft, and establishing mandatory 
minimum sentences for serious drug crime to complement a revamped 
National Anti-Drug Strategy in October. 
 
¶12. (U) The Conservatives have also made progress on aboriginal 
affairs, establishing a landmark Indian Specific Land Claims 
Tribunal to streamline the land claims process and passing a bill to 
extend the Canadian Human Rights Act to aboriginal reserves.  On 
June 11, PM Harper issued a historic formal apology for the federal 
role in the operation of Indian Residential Schools and a national 
Truth and Reconciliation Commission on the Residential Schools issue 
began work in May. 
 
¶13. (U) The Conservatives have moved forward with bills important to 
their western Canadian support base, such as dismantling the 
Canadian Wheat Board marketing monopoly on barley, and have made 
largely symbolic progress on Senate reform (bills to limit 
senatorial terms and allow for public consultation on the 
appointment of senators). 
 
SOLID MARKS, BUT NO GOLD STAR 
 
OTTAWA 00000884  003 OF 004 
 
 
--------------------------------------------- 
 
¶14. (U) Voters generally give the government good marks, and the 
Conservatives scored two seats in upset by-election victories in 
September and March from the Bloc Quebecois and the Liberals 
respectively.  In a late May poll, the Conservatives were at 37 
percent nationally compared to 29 percent for the Liberals, and 55 
percent of those surveyed felt the country was on the "right track" 
in spite of rising anxiety over the economy.  Harper is still the 
first choice among voters for prime minister at 35 percent to 26 
percent for Dion (whose overall performance rating plunged to a 
historic low of 10 percent in May), and more Canadians (43 percent) 
appear to have faith in Harper to manage the economy than Dion (25 
percent).  However, the Conservatives have not been able to capture 
the public imagination and Canadians appear evenly split over 
whether the government deserves re-election (46 believe the 
Conservatives deserve re-election and 47 percent want a change). 
 
¶15. (SBU) Unease over the economy in central Canada has sapped 
Conservative support, and the government has suffered the wear and 
tear of minor 'scandals', including the resignation of former 
Foreign Minister Maxime Bernier, the so-called "In and Out" dispute 
with Elections Canada over 2006 campaign financing that prompted a 
humiliating "raid" on federal Conservative headquarters, allegations 
that the party tried to bribe the late independent MP Chuck Cadman 
in 2005 to vote to defeat the-then Liberal government, "NAFTA-gate", 
and former Conservative PM Brian Mulroney's questionable business 
dealings with Karlheinz Schreiber.  None of the 'scandals' appear to 
have significantly dented the Conservatives' popularity, but they 
consumed valuable energy and will prevent the Conservatives from 
playing the "clean" card again in the next election.  Extreme 
partisanship on both sides of the Commons prompted Speaker Peter 
Milliken privately to express his frustration to U.S. officials over 
the government's refusal to consult and negotiate -- the "grease" of 
any minority government -- with the opposition.  The negativity of 
Question Period also spilled over to committees, the workhorses of 
the Commons. 
 
WHAT'S NEXT? 
--------------------------------------------- 
 
¶16. (SBU) Major issues left to be dealt with include legislation to 
place formal limits on the federal power to spend in areas of 
exclusive provincial jurisdiction, national security, and more 
effective action on the environment.  However, with key components 
of the Conservative economic, defense and justice agenda passed, PM 
Harper has taken minor steps to reposition his government.  These 
include a new Chief of Staff, Guy Giorno, on July 1, replacing Ian 
Brodie, and a Cabinet shuffle (ref C).  Giorno, a key aide to former 
Conservative Ontario premier Mike Harris in the late 1990s, will 
work to improve relations with the media and to engage the public 
service more effectively. 
 
¶17. (U) Pundits continue to speculate whether Harper will prorogue 
Parliament for the second successive year, and return in the fall 
with a fresh Throne Speech that will serve as a platform for a fall 
election or a blue-print to take him to the fixed-date election of 
October 19, 2009.  Parliament is currently scheduled to resume on 
September 15, but prorogation -- if it happens -- could push that 
back to October, or even November, after the Conservative policy 
conference in Winnipeg from November 13 to 15. 
 
¶18. (SBU) The PM has made it clear that his agenda is on track and 
voters can expect more of the same.  Conservatives appear to believe 
Qvoters can expect more of the same.  Conservatives appear to believe 
that their bumper-sticker formula of lower taxes, safer streets and 
promises kept, will prevail over the Liberals' complex "Green Shift" 
carbon tax plan.  A June 22 poll, the first since Green Shift's 
launch, indicates the plan has the potential to be a game-changer 
for the Liberals (47 percent in favor, 39 percent opposed), with 
cross-cutting support among New Democrats, Greens and Bloc 
supporters, women (48 percent) and those under 35 years (61 
percent).  However, most respondents conceded they did not know the 
details, and much depends on Liberal leader Dion's ability to pitch 
it convincingly as energy costs rise.  He has effectively staked his 
leadership on the tax and, if Canadians are receptive, he may be in 
the mood to gamble on an election in the fall. 
 
COMMENT 
--------------------------------------------- 
 
¶19. (SBU) Election brinkmanship has been the tool of choice for this 
minority Conservative government; one Liberal MP told us a year ago 
that he had already signed leases for an election campaign office 
three times and had to cancel each one.  Conservative insiders have 
similarly told us that the government script for the next election 
-- whenever it comes -- has already been written, subject to ongoing 
fine-tuning.  In office, Harper's motivation has been less to 
implement a radical vision than to establish a credible record of 
governance, to engender confidence, and to implement incremental but 
significant change.  On that score, the last nine months have been 
the Conservatives' most productive to date.  However, the Liberals 
 
OTTAWA 00000884  004 OF 004 
 
 
may be more willing to push back in the fall, making developments in 
the coming months even more difficult to predict.  End Comment. 
WILKINS