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id: 242400
date: 1/4/2010 15:32
refid: 10OTTAWA1
origin: Embassy Ottawa
classification: CONFIDENTIAL//NOFORN
destination: 08OTTAWA1574
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C O N F I D E N T I A L SECTION 01 OF 03 OTTAWA 000001
NOFORN
SIPDIS
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC
AMEMBASSY BELGRADE PASS TO AMEMBASSY PODGORICA
AMEMBASSY ATHENS PASS TO AMCONSUL THESSALONIKI
AMEMBASSY MOSCOW PASS TO AMCONSUL YEKATERINBURG
E.O. 12958: DECL: 2020/01/04
TAGS: PREL PGOV MARR ECON ETRD SENV CA AF
SUBJECT: CANADA; TOP FIVE POLICY PRIORITIES IN 2010
REF: 08 OTTAWA 1574
CLASSIFIED BY: Terry A. Breese, DCM, Ottawa, DCM; REASON: 1.4(D)
¶1. (C/NF) Summary. PM Harper's top goal for 2010 is remaining
in power, preferably without an election that the public does not
want but, if need be, to force the weak opposition parties to bring
on another election and bear the political consequences. The
Conservatives will need to demonstrate slow but steady progress on
the economy and to claim credit even when it is not necessarily due
to them. Resolving "Buy America" provisions in U.S. legislation
would win the Conservatives some domestic political points, but
failure to do would probably not hurt them measurably. After an
almost invisible role in Copenhagen, the Conservatives will still
want to portray themselves as taking some pro-active steps on the
environment to counteract public impressions that Canada is merely
following a U.S. lead (however true this may be). For the present,
the Conservatives will move toward as graceful as possible a
withdrawal of Canadian Forces from Afghanistan by the end of 2011
as mandated under a Parliamentary motion. However, they still face
some specific decisions soon about other future assistance there.
Winning a Parliamentary majority in a new federal election and/or
significant changes on the ground in Afghanistan could arguably
enable the Conservatives to change course. End Summary.
Sitting pretty, but not pretty enough
¶2. (C/NF) In February 2010, Prime Minister Stephen Harper will
complete his fourth year as Canada's head of government, despite
the continued minority status of the Conservative Party of Canada
in the House of Commons (145 members to the Official Opposition
Liberal Party's 77 members in the 308 seat chamber). His party
remains ahead in the polls - although still somewhat below the 40
pct national support that could arguably translate into a majority
in a federal election. His own approval ratings are nearly double
those of Liberal leader Michael Ignatieff. As was true for all of
2009, the Conservatives will spend 2010 waiting for an election,
whether one that they trigger themselves (as in 2008) or one that
results from losing a vote of no confidence in the House of Commons
if the three opposition parties join forces against them.
Top priority: stay in power
¶3. (C/NF) The Conservatives increasingly see themselves as the
21st century's new "natural governing party" for Canada, a title
the Liberals gave themselves in the previous century. However, in
the federal elections in 2004, 2006, and 2008, the Conservatives
under PM Harper failed to convince the public to give them a
majority, although they won the largest number of seats in the
House of Commons in the latter two elections and formed the
government. Their greatest weaknesses have been in Quebec (where
the Bloc Quebecois now has 48 of the province's 75 seats), in the
major urban areas (Montreal, Toronto, and Vancouver), and among
immigrants and women, although they have made some in-roads in the
past year in all these populations.
¶4. (C/NF) The Conservatives and most pundits had viewed a fall
2009 election as virtually a sure bet, especially after Liberal
leader Ignatieff rhetorically declared to PM Harper at the end of
the summer that "your time is up." Few predicted that the New
Democratic Party would reverse a long-standing course of blanket
opposition to the Conservatives by instead propping up the
government, ostensibly to ensure two unemployment
compensation-related bills that the NDP, along with the
Conservatives, supported. Both had become law by the end of 2009,
when Parliament recessed, giving the NDP no particular reason to
support the government any further.
¶5. (C/NF) How long into 2010 the Conservatives can face off the
opposition parties is a crapshoot; all four parties in Parliament
must continually re-examine how well they might fare in a new
election and craft their short-term tactics accordingly. The
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Conservatives arguably have the most to gain in a new election,
given the many self-inflicted wounds suffered by the Liberals under
Ignatieff over the past year. The Conservatives nonetheless do not
wish the public to blame them for a new and still unwelcome
election. Liberal disarray and disappointing fundraising in the
second half of 2009 leave the Liberal party in poor shape to face
an election, which Ignatieff now admits that the public does not
want. Nor have the Liberals hit upon a potentially winning issue.
They and the NDP have tried to turn the treatment of Afghan
detainees transferred by the Canadian Forces to Afghan authorities
in 2006 and 2007 into a major embarrassment for the government. So
far, the public isn't biting (51% remain unaware of the issue,
according to a recent poll), and it is far from clear that there is
much political utility for any of the opposition parties in making
a major push to continue this probe in 2010.
¶6. (C/NF) The December 30 temporary suspension ("prorogation") of
Parliament at PM Harper's request will give the Conservatives some
political peace until March - notably, during the
publicity-friendly 2010 Winter Olympics -- but has also further
alienated the opposition parties and potentially raised the
likelihood that they will revolt together against him over the 2010
budget in March. If so, this could lead to another federal
election just before the G-8 and G-20 Summits in June (and Queen
Elizabeth's visit in June and July). The Conservatives and the
Liberals in particular will be carefully watching the polls in the
coming months as they attempt to guess the relative advantages of a
spring versus fall 2010 election. If neither timing appears
inherently desirable to either, the Conservatives could conceivably
coast in office until 2011.
Second priority: Re-grow the economy
¶7. (C/NF) The Conservatives have touted their careful pre- and
post-recession stewardship of the economy as the main reason Canada
was less battered by the global recession than their G-8 partners
as well as other key economies. The jury is still somewhat out on
whether long-standing monetary and fiscal policies were the main
factors, or whether Canada's huge resource base and openness to
international trade were not at least as much factors; our view is
that both elements were part of the serendipitous mix. The
Conservatives have in any event pretty much succeeded in convincing
the public that they are more trustworthy on this issue than the
Liberals would be (no one even bothers to contemplate what the NDP
or Bloc might have done) - but they know they need to do more in
¶2010. ¶8. (C/NF) The 2010 budget, which the government must present to
Parliament by March, will be the next indicator of what the
Conservatives plan to do, especially given growing public anxiety
about the sizeable (by Canadian standards) deficits projected not
only in 2010 but at least through 2014. While the Conservative
mantra of tax cutting sounded good to voters (if not to all
economists) in 2006 and 2008, now it is more likely to scare the
public. Spending cuts are the inevitable alternative, but the
Conservatives cannot yet risk any sizeable reductions, at least
until the economy takes off again. The budget - which is a
confidence vote -- likely will have to include something for
everyone and give the Liberals, Bloc, and possibly even the NDP
something that they can vote for, or at least not oppose.
¶9. (C/NF) The Conservatives do not appear to have any bold
measures up their sleeves to improve the economy, but appear
content to wait for more results from their uncharacteristic
stimulus packages and for a rising global economy - especially in
the U.S. - to lift all boats.
Third priority: Resolve "Buy America"
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¶10. (C/NF) PM Harper has raised Canadian concerns over "Buy
America" provisions in the American Reconstruction and Recovery Act
(ARRA) so often with President Obama that it has become somewhat of
a private joke. Any success on this issue from the ongoing
bilateral negotiations will be political gold for the
Conservatives, and also potentially a win/win for
federal/provincial relations. The public -- but not the business
community -- has largely lost track of the dispute, however, so
even a failure in the talks might hurt the Conservatives less than
would have been likely only a few months ago. None of the
opposition parties has any better plan on how to reverse any U.S.
inclinations on protectionism.
Fourth priority: Do something on climate change
¶11. (C/NF) PM Harper somewhat grudgingly went to Copenhagen for
the UN Summit on climate change, but only after President Obama
announced that he would attend. PM Harper's participation was
virtually invisible to the Canadian public, and there was
considerable negative coverage of his failure to play a more
prominent role - or even to sit in on the President's key meetings
with world leaders. Environment Minister Jim Prentice was sent out
to do the media scrums and to insist that Canada was a helpful
participant and would work closely with the U.S. on a continental
strategy on climate change. Now he must come up with some
proposals that make Canada not seem merely to be going slavishly
along with whatever its American "big brother" decides to do -
which will not be easy. At the same time, a substantial
proportion of the Canadian public and industry (as in many
resource-rich industrialized countries) are opposed to Harper
taking a leading role and are even opposed to him following any
likely leads set by the Obama Administration. In that respect,
given Canada's role as a major petroleum and natural gas producer,
he will have an even more difficult political balancing act than
will the U.S. or the Europeans. No big, sexy initiatives are
likely from the Conservatives, however. Luckily for the
government, the Liberals also do not have any great ideas up their
sleeves, having especially been burned in previous Liberal leader
Stephane Dion's "carbon tax" campaign platform in 2008.
¶12. (C/NF) Regional differences - notably among the oil/gas rich
provinces of Alberta and Saskatchewan, the industrial province of
Ontario, and the hydro-blessed province of Quebec - will complicate
the federal government's ability to come up with a climate change
policy that will please or at least satisfy all major
constituencies.
Fifth priority: Get out of Afghanistan as gracefully as possible
¶13. (C/NF) PM Harper has insisted over and over that, in
according with the bipartisan March 2008 House of Commons motion
extending Canada's military presence in Afghanistan only through
2011, the Canadian Forces will indeed pull out NLT December 2011,
and planning is underway on how to do so. Diminishing public
support for the mission, a sense that Canada had done more than its
share, and unspoken relief that the U.S. surge will let Canada off
the hook all argue against any Canadian political leader rethinking
Canada's strategy, at least for now. Absent a federal election in
which the Conservatives win an actual majority, a significant and
positive change in the conditions on the ground in Afghanistan,
and/or a formal U.S./NATO request for Canada to remain post-2011 in
some military capacity, the likelihood at present is that Canada
will withdraw on schedule, as gracefully as possible. The
government has been deliberately vague on post-2011 plans, apart
from pledging -- without specifics -- a robust "civilian,
developmental, and humanitarian" role, and will have to come up
with an ambitious plan sometime in 2010. Some Conservatives as
well as defense officials and media commentaries have already begun
to express concern that the Canadian military pullout will diminish
whatever special attention and consideration Canada has received
from the U.S. and NATO as a result of its sacrifices in Kandahar.
JACOBSON
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