by Paul Wells
Harper also talked about providing a seat for Quebec at the Canadian delegation in UNESCO. Two weeks after the Board of Trade speech he would fly to Quebec City to sign an agreement with Jean Charest setting out the terms of Quebec’s participation in UNESCO. The coverage of the UNESCO deal would be huge. The ceremony, in the ceremonial Salon Rouge of the National Assembly, would be front-page news. It’s the little things that count. And in the mind of Harper’s team, UNESCO was definitely a little thing.
“So this idea of the UNESCO thing,” a senior Harper advisor said much later. “I don’t know where the hell that came from. In a certain sense it was a very convenient idea. Because, really, on the Conservative side of the House of Commons, English-speaking MPs don’t give a flying fuck about UNESCO. Really don’t give a flying fuck about UNESCO.” But Charest wanted to show he could get things done with a new team in Ottawa. So letting Quebec appoint somebody to be the Quebec person in Canada’s UNESCO delegation was a fun way to put something nice in the window.
As a bonus, it was perhaps the only way to get English-speaking MPs to pay even passing attention to UNESCO. “The objective, then, in bringing an ambassador to UNESCO is to keep track of the Quebec guy,” our senior Harper man says. That is, the Canadian government’s UNESCO ambassador would keep an eye on Quebec’s provincial representative.
But while the Outremont salon set was busy poring over the fine print of the UNESCO deal, the broadest, most durable elements of Harper’s approach to federalism were getting little scrutiny. The GST cuts—a point in 2006, a second point on the way for 2007—durably chiselled away at federal government revenues. Continued transfers to the provinces, growing at a rate far ahead of the general growth of the economy, would take an ever-larger bite out of the feds’ ability to spend on anything else.
In 2001, as president of the National Citizens Coalition, Harper, along with five other Alberta conservatives, had famously signed an open letter to Alberta premier Ralph Klein in the pages of the National Post. “It is imperative to take the initiative, to build firewalls around Alberta, to limit the extent to which an aggressive and hostile federal government can encroach upon legitimate provincial jurisdiction,” this notorious “Firewall Letter” said.
Now, Harper’s first two grand economic gestures worked together to implement a variation on the firewall agenda, not by shielding the provinces but by disarming Ottawa. Tax cuts—“the ultimate decentralization”—would ensure that less money ever got to Ottawa. Increased transfers would ensure less of it stayed there long enough to do anything that might annoy the kind of people who write firewall letters.
The Laval University economist Stephen Gordon has written that it was the Martin health-care transfer increases, phased in by Harper on Martin’s schedule, and Harper’s GST cuts that together eliminated the string of federal surpluses that began in 1998. The GST cuts alone, Gordon wrote, “blew a $12 billion hole in the federal balance that will have to be filled somehow.” Or, you know, not. By 2010, federal revenues as a share of GDP would hit their lowest level since 1963.
Like just about every economist in Canada, Gordon was sharply critical of the Harper GST cuts because cutting value-added sales taxes is not the best way to boost productivity. But Harper was not interested in boosting productivity. He was interested in clearing a lot of money out of Ottawa fast. He wanted to do it in a way that would be noticed by voters every single time they acted as consumers; because those consumers had noticed, a future government from another party would not feel able to revoke that cut. If your objectives have more to do with federalism and elections than with productivity, a GST cut is a fine cut indeed.
In 2011, after I began to do some journalism about the combined long-term effects of tax-cuts-plus-transfer-hikes in sucking the activist air out of Ottawa, a long-time Harper associate sent me an e-mail. “You are correct on the PM’s desire to reduce successive federal governments’ ability to intrude in provincial jurisdiction,” my correspondent wrote.
“This is due, in part, to his decentralist convictions (he has never renounced, or even qualified, the firewall letter, to my knowledge). But, more pertinently, it is about his desire to wean Canadians from the Liberal Party and others, like the NDP, who see a strong—and flush—federal government as their personal social-engineering playground. Politically this is working. Witness the last [2011] election, where any grand pronouncements on this front were greeted with the inevitable ‘How are you going to pay for it?’ The only answers are (1) raise taxes or (2) forgo other federal expenditures. Responses to either one are favourable political ground for the Conservatives—especially in dodgy economic times.”
Much of the context for all these decisions came from two big elements of the Liberal legacy that Harper inherited: a healthy federal balance sheet and a huge measure of fatigue with federal-provincial summitry.
“Those were good times,” a former senior bureaucrat says. “We were running surpluses and it was clear we were going to have another sizable surplus—probably close to ten billion I think in 2005; 2006 maybe it was thirteen billion-ish—which is pretty good. The government’s coming in with this large agenda. It all seemed very affordable at the time, partly because we had this economy running faster than potential.”
The result was something approaching giddiness among the new crew. “These were kids in a candy store that had a big allowance. They were saying, ‘Well, we can do all this stuff.’ ” It didn’t inspire a lot of caution. In fact there wasn’t a lot of patience with people who sounded cautious notes.
“We prepared material on broader issues—productivity issues, fiscal federalism issues like the whole transfer stuff, economic issues,” the former bureaucrat said. “They were just like, ‘Okay, no, we want to implement our agenda.’ ”
The so-called challenge function is, of course, central to the work public servants do. A politician has a plan. A bureaucrat implements it—but first, he pushes back, tests the assumptions of the plan, makes sure the politician wants to do what the politician thinks he wants to do. “Fearlessly challenge and faithfully implement” is a watchword in the Canadian public service. With Conservative governments in particular, however, there is at least a veneer of suspicion on the political side about whether the challenges are valid or the implementation faithful: the “permanent government” of the civil service is presumed to be essentially a Liberal government.
But it’s easy to overstate the level of animosity. During the Harper years individual Conservative politicians have often formed strong working relationships with their counterparts on the bureaucratic side. And the challenge function could often be exercised without penalty. One of the loudest internal voices pushing back against the Harper clan’s early plans was a bright young associate deputy minister of finance named Mark Carney.
“This guy, he was never shy of speaking out,” our former bureaucrat says. “I have huge respect for this guy. He was like, ‘Do you really need to do the GST? Why not do other things?’ ”
They were not interested in other things. The 2005 federal budget, the last from Paul Martin as prime minister and Ralph Goodale as finance minister, had called for a series of small income-tax rate cuts. At the lowest rate of taxation, Martin and Goodale wanted to reduce the rate from 16 percent of income to 15 percent. But that cost money, and the Harper crew needed that money to be able to afford their GST cuts. So ironically, in a budget they trumpeted as a tax-cutting triumph, the Conservatives reduced the lowest rate only to 15.5 percent, cancelling half a point of income tax cuts. The Liberals raised a ruckus. But nobody was listening much to the Liberals at that point.
Through this intense period of redefining Ottawa’s fiscal relations with the provinces, with municipalities and with every Canadian, Harper avoided what had become a familiar mechanism of federal-provincial relations: the big, formal First Ministers’ Meeting at which the prime minister would sit down with the premiers while reporters and camera crews stood vigil outside. Harper’s go
al was that the provinces do more by themselves. He had no particular interest in working with them. On February 24, he had played host to the premiers at 24 Sussex Drive. The three-line news release did everything possible to lower expectations for the event. It noted that premiers would be in Ottawa anyway for a meeting of their own; it said photos could be taken only at the beginning of the dinner; and it used a peculiar verb to describe Harper’s role, saying he would “entertain” his guests. When reporters finally caught up to Harper, two weeks after the dinner, he made it clear that any transformation in the relationship would take place on his terms. “I was glad I didn’t have my chequebook there,” he said of the dinner, “because there were a lot more potential bills being talked about than certainly I could possibly afford to pay or that the taxpayers of Canada could afford to pay.”
One of his advisors said: “He had that meeting because he thought he had to, as a new prime minister, to meet everybody. But keep in mind that fresh in everybody’s mind—I don’t just mean in his mind, everybody in the party, everybody in the Federal-Provincial Relations Office, everybody in the PCO, everybody who would be mobilized for something like that—the most recent thing they had been through was the health deal to save medicare for a generation.”
This would be the federal-provincial summit Paul Martin convened four months after the 2004 election. It turned into a bit of a marathon, with Newfoundland premier Danny Williams threatening to walk out. The premiers kept testing how much more money they could get from Martin; the answer was, generally, a little more. To be fair, the summit went a long way toward establishing federal-provincial peace on health funding where there had been little before. But it was still excruciating to watch.
Alex Himelfarb, the outgoing Clerk of the Privy Council, had sat at Martin’s right hand in 2004. In 2006 he told Harper not to have another no-holds-barred federal-provincial meeting. “Alex could just barely contain himself with the ‘Don’t ever do this,’ ” the former PMO advisor said. Harper’s staff told him he needn’t worry. Having the gang over for dinner—“entertaining” them—was the closest thing to not having them over at all. “Stephen thought he had to meet everybody at once, if only just to say he’d done it, and he wouldn’t have to do it again for a long time,” the advisor said.
William Stairs, Harper’s communications director (soon to be replaced by Sandra Buckler), was getting questions from reporters about what would be on the menu. He was told to say beef. Not because that was the answer—nobody knew what the chef at 24 Sussex was going to serve, and nobody wanted to bug him about it—but because it was the least interesting possible answer, and everybody around Harper wanted this to be the least interesting possible dinner.
After it was over, Harper implemented his preferred method for dealing with premiers, which was to meet them one at a time and with no fuss. “He made a decision when they came to see us, there wouldn’t be any joint press conferences or anything. Nor were we going to have cameras in for photos, generally speaking. Because this was going to be businesslike. And there was going to be differences of opinion and sometimes conflict, and there was no point in playing that up as a great public psychodrama, because in the scheme of things, for most of these things, we were just going to manage through them,” the PMO advisor explained.
But there will always be something a leader can’t simply manage his way through. Harper’s first serious curve ball as prime minister came to him from the Liberal Party. While Harper was making the decisions and establishing the work routines that would define his approach to federalism, the Liberals were holding a campaign to find a replacement for Paul Martin. They were taking their time about it. Harper and Brodie had assumed the Liberals would hurry to have a new leader in place by early autumn 2006. But the party booked a Montreal convention centre for December.
The front-runner was Michael Ignatieff, tall, preppy, handsome from the right angle. A BBC television host, author, journalist and former director of the Carr Center for Human Rights Policy at Harvard. A few Liberals had cultivated him as a sort of greenhouse experiment in twenty-first-century Liberal leadership. Ian Davey, Alfred Apps and Dan Brock had gone to Harvard to tempt Ignatieff into returning to Canada. Peter C. Newman had seeded the news columns of the National Post and Maclean’s with word of his formidable intellect and passion, along with a reminder that the Liberal Party always chooses outsiders to lead it. Outsiders like John Turner and Jean Chrétien and Paul Martin.
To simplify, most candidates for party leadership build their sales pitch around one of three attributes: mastery, authenticity or revolution. A candidate offering mastery is telling party members he can navigate the thickets of Parliament and government better than any rookie. Jean Chrétien claimed mastery when he sought the Liberal leadership in 1990, as did Joe Clark when he returned to the Progressive Conservative leadership in 1998. A candidate offering authenticity is telling the party base he is one of them and will never betray their convictions. Stephen Harper in 2002 offered authenticity. But Ignatieff would have had trouble finding Parliament on a map, and he had supported the Iraq war, which pretty much blew up mastery and authenticity as selling points. So Davey and Apps, who had their own history of estrangement from a succession of Liberal establishments, decided to go with revolution. The Ignatieff team’s sales proposition was that only from outside could the Liberal Party be properly shaken up. Accordingly, Ignatieff needed a few ideas that would constitute a proper shaking. Perhaps because he was out of the country when Brian Mulroney’s attempts to amend the Constitution to please Montreal newspaper editorialists turned into the Meech and Charlottetown debacles, Ignatieff decided it would be a swell idea to try again.
He was shaky on the details. “To recognize Quebec—and Aboriginal peoples—as nations within the fabric of Canada is not to make some new concession,” Ignatieff wrote in a policy book he published during the summer of 2006. “Nor is it a prelude to further devolution of powers.” Got that? No new concession, no devolution of powers. A page later, Ignatieff wrote that he expected Canadians would be called upon to ratify “a new constitution” at some point. What would be in it? Hard to say. “The details that must be reconciled in a constitutional settlement are complex.”
The Quebec wing of the federal Liberals, divided among several candidates but inclined to prefer Ignatieff’s openness over Stéphane Dion’s tidier view of federalism, called a special meeting to adopt a resolution endorsing a proposal to recognize Quebec’s status that largely echoed Ignatieff’s language. The Liberals seemed certain to debate the notion of Quebec as a nation on the floor of their leadership convention in Montreal in early December. Candidates lined up on various sides of the question, with Ignatieff most strongly in favour of recognizing Quebec somehow, in some form, and the essentially unilingual Gerard Kennedy, a late-arriving refugee from Ontario provincial politics, most strongly opposed to any sort of recognition.
There followed a few strange weeks of the kind that have transpired since on other national-unity files. Quebec-based newspaper columnists lined up to savour the corner Ignatieff had painted the Liberals into. What would the Liberals do? How could the Liberals reconcile the heritage of Pierre Trudeau’s opposition to Meech and Charlottetown with Ignatieff’s bold new initiative to recognize Quebec’s “difference”? The spectacle the Liberals were providing was so fascinating to commentators that just about everybody forgot Canada had a government and that it was currently run by the Conservative Party. Stephen Harper, the Conservative leader who was currently serving as prime minister, had a solid track record on the question of recognizing Quebec’s otherness. His position could not have been less of a secret. He was against it.
In 1997 the premiers of every province except Quebec had met in Calgary to discuss responses to Quebec separatism. They ended up producing something called the Calgary Declaration, an essentially trivial document that affirmed provincial equality four times before proclaiming that “the unique character of Quebec society” was “f
undamental to the well-being of Canada.” But the premiers took even that fantastically timid step over Stephen Harper’s specific objections.
Harper, recently retired from politics after a single term as a Reform MP and running the National Citizens Coalition, and Tom Flanagan had written a letter to the Calgary Herald, published the day before the premiers met. “It’s vital not to start drafting legislative resolutions to recognize Quebec as ‘distinct’ or ‘unique’ or anything else,” they wrote. “No new declarations are needed. Quebec is an integral part of Canada and Canada’s treatment of Quebec has been generous without comparison.” Harper and Flanagan called talk of Quebec’s uniqueness “code for distinct society, and ‘distinct society’ … code for special status.”
They were plainly furious with the Quebec Liberal Party (PLQ, then led by Daniel Johnson) for encouraging such talk. “Much evidence suggests that the PLQ is still committed to the strategy that it has executed so successfully for three decades—brandishing the threats of secession made by the separatists in order to extract concessions beneficial to Quebec nationalism.” Even today in 1997, they wrote, Johnson “still refuses to sign the Constitution, insists on Quebec’s right to sovereign self-determination, and resists federal efforts to make any referendum process abide by Canadian law and the Constitution.”
Given that background, Harper’s position on the question of Quebec’s nationhood might have seemed germane. But it went unasked by reporters and opposition politicians until November 2006, when Bernard Landry, the former Parti Québécois premier, wrote a newspaper article calling on Harper to follow Ignatieff’s example. The Liberal pretender “paved the way for you,” Landry wrote to Harper. It fell to the Bloc Québécois to force the question by putting the recognition of a Quebec nation to the House of Commons in a votable motion. This they were able to do on one of the regularly scheduled “supply days” when the Commons debates, and sometimes votes on, a topic chosen by an opposition party, not the government.