Rise to Greatness

by Conrad Black

  Diefenbaker got a confidence vote from his own party executive and invited himself to a meeting in Nassau, in the Bahamas, between Kennedy and Macmillan, and confected a survival strategy that was the most astonishing contortion of facts this very eccentric leader had yet conjured from his verdant imagination and playbook-in-progress. He informed Parliament on his return on January 25 that the Western World had survived the last few perilous years because it had been “directed by God.” He purported to deduce from his meeting with the American and British leaders that there had been a “change in the views of NATO” by which Canada’s acquisition of atomic warheads had “been placed in doubt.” He claimed that “more nuclear arms will add nothing to our defence” but that negotiations continued between Canada and the United States “in case of need.”40 It was a spectacular improvisation but it certainly would not work; it was too ambiguous to resolve his cabinet problems and too spurious a misinterpretation of the Bahamas discussions not to motivate the Europeans to demand clarifications and be authoritatively contradicted by the Americans and British. It was, in fact, not an altogether sane speech, even without considering Diefenbaker’s divinations of the role of Providence.

  Harkness hopefully declared, to remove doubt, that his chief intended to assure everyone that Canada would honour its commitments. The following day, Diefenbaker stated that his speech required no elaboration, adding to the necessity of it being explained. The European NATO allies obviously needed to know if there was any truth to Diefenbaker’s interpretation of the declining utility of nuclear weapons; either he was misreading the Bahamian proceedings or Kennedy and Macmillan were, on their own authority, changing the course of the whole alliance. Obviously, the first had to be the case, but the Europeans, as the frontline states in the Cold War, had to be reassured. Without consulting President Kennedy or the secretary of state, Dean Rusk, in a considerable foray into insubordination, State Department officials issued a statement that the Nassau agreements, which had already been published (and would prove controversial for other reasons as the British took up the Polaris missile-launching submarine, which was not offered to the French, in replacement of the Skybolt missile), raised “no question of the appropriateness of nuclear weapons for Canadian forces in fulfilling their NATO or NORAD obligations.” The statement further announced, even more grievously assaulting Diefenbaker’s credibility, that “the Canadian government has not yet proposed any arrangement sufficiently practical to contribute effectively to North American defense.” Rusk later regretted if the statement caused “offense” but did not retract it.

  Drama swiftly gave way to farce as Diefenbaker imagined that he could ride American official arrogance to domestic political victory. He tried to convert the entire issue to a national refusal to be dictated to by the United States, which was only asking for the performance of defence obligations freely entered into by Canada and of which Canada was the chief beneficiary, as the United States was providing almost all the real defence capability for the whole continent. Diefenbaker recalled the Canadian ambassador from Washington “for consultations” and fiercely rejected the role of “satellite,” a tendentious choice of words given that it was the usual description of the Soviet-occupied states of Eastern Europe. Harkness was determined to resign unless his leader was overridden by the cabinet. The associate minister of national defence, Pierre Sévigny, another decorated and seriously wounded veteran, was also disaffected, as were several other ministers, including the photogenic and hyperactive trade and commerce minister, George Hees. The whole government was on the verge of collapse.

  The rebels milled noisily about, and Diefenbaker called a cabinet meeting at his residence on February 3, declared the existence of a “nest of traitors,” and demanded a unanimous pledge of loyalty. Harkness calmly stated that the cabinet, parliamentary party, and the whole country had lost confidence in the prime minister and that he would resign rather than give the pledge requested. Green intervened and stabilized things briefly with an impassioned plea for loyalty to the chief in the face of an anticipated Liberal non-confidence motion, for which there was no indication yet of the required Social Credit and NDP support to force an election. Pearson made his motion in Parliament the next day as the news of Harkness’s resignation circulated. Robert Thompson’s own preference was for the government to continue, an anti-American election to be avoided, and for the government to address the country’s deepening currency problems (though the economy was reviving) and produce a budget. But Premier Manning urged him to help pull the plug on Diefenbaker, whom Manning, an astute political judge at this point, after twenty years in power in Alberta, regarded as a menace to the Western Alliance. Thompson proposed an even more forceful censure of the government than had Pearson, and after a mélange of stirring and ineffective speeches, including an impressive reply by a beleaguered but unbowed prime minister, the House voted no confidence in an incumbent government for the first time since the Pacific Scandal brought down Macdonald in 1872.

  The vote was 142 to 111. The caucus, where Diefenbaker was stronger than he was with the cabinet, met before the cabinet, and George Hees spoke poorly for the rebels, having confected a foolish plan to offer Diefenbaker the post of chief justice (which was not vacant). Senator Grattan O’Leary, formerly long-time editor of the Ottawa Journal and no great admirer of his chief, was repelled by the cowardice of rebellion at this stage and rallied the MPs and senators, though he felt Diefenbaker was incompetent and would be defeated in the coming election. Hees and the other waverers rallied briefly, the election was fixed for April 8, but Hees and Sévigny resigned on February 8 and Fleming, Fulton, and Ernest Halpenny* announced that they would not seek re-election.

  Like an unstoppable vaudevillian on autocue, a perversely revived Diefenbaker campaigned fiercely against the forces of privilege and special interests and the American stooges who he claimed were responsible for his problems. He could not really run on his record, and the disorganized government had no platform, but its fervent leader, half aged underdog pugilist and half King Lear, did what he did best and fought like a rabid tiger against a reluctant adversary, Pearson, all of whose instincts were to civility and compromise. As the campaign unfolded, the U.S. government again obligingly blundered, when Defense Secretary Robert McNamara (whose penchant for costly errors would later prove tragically extensive) allowed that the only real use of the Bomarcs was to be a decoy toward themselves and away from populated areas. This was nonsense, as they certainly had the ability to take down a lot of unwelcome aircraft with nuclear detonations at high altitudes. But Diefenbaker seized it as some sort of vindication of his own change of policy, which was now in complete exposure as unfathomably absurd, from the death of the Arrow to his own confirmation that the Bomarcs he had signed on for were militarily worthless as well as immoral (though neither was the case other than with their sand warheads).

  Of course, it availed only to confuse some people, and what had become a carnival government ended on election night. The Progressive Conservatives declined from 37.2 per cent of the popular vote and 116 MPs in 1962 to 32.7 per cent and 95 MPs. The Liberals rose from 37 per cent and 99 MPs to 41.5 per cent and 128 MPs. Social Credit raised its vote, entirely in Quebec, from 11.6 per cent of the Canadian total to 11.9 per cent, but lost 6 Quebec MPs and declined from 30 to 24 seats. The NDP declined slightly, from 13.6 per cent of voters to 13.2 per cent, and from 19 to 17 MPs. Lester Bowles Pearson would be prime minister, as Mackenzie King and Louis St. Laurent had foretold fifteen years before.

  John Diefenbaker was not a successful prime minister; he was a jumble of attitudes but had little in the way of policy, was a disorganized administrator, and was inconsistent, indecisive, and not infrequently irrational. But he was very formidable: a deadly campaigner, an idiosyncratic but often galvanizing public speaker, a brilliant parliamentarian, and a man of many fine qualities. He was absolutely honest financially, a passionate supporter of the average and the underprivileged and disadvantage
d person, a fierce opponent of any racial or religious or socioeconomic discrimination, and while much criticized, as Pierre Laporte wrote of Maurice Duplessis, “Once in his presence, few could find voice for their grievances.”41 He was the first leader of Canada since Champlain, a third of a millennium before, who seriously cared for and respected the native people. His career was far from over; he would continue as probably the most capable and damaging leader of the Opposition in the country’s history, and would carry on long after that as dean and master of the House of Commons and the ghost of past victories of the Conservative Party. He did not really have the remotest idea of what was necessary to make Canadian federalism work, of some of the regional forces that had to be managed, especially in Quebec, of the need for a double majority, French and English, on certain issues, or of the sensitivities of dealing with the Americans and British to Canada’s advantage. In fact, considering that Borden was re-elected as head of a coalition in 1917, Diefenbaker was the only elected prime minister ever re-elected who did not understand how to attract heavy support in Ontario and Quebec. But he was a very considerable political figure, and unlike any other Canadian prime minister, in this as in many other respects, and despite the shambles of his government, his greatest days were ahead of him.

  Lester B. “Mike” Pearson (1897–1972) was, as we have already seen him, a congenial, urbane, and emollient man, rooted altogether in the traditions of Skelton’s foreign service, and though now a seven-term MP, with his slight lisp and bow tie, he was no more a politician in manner and appearance than at heart and lacked the instincts of combat on the hustings and for legislative manoeuvre for popular appeal. The Liberals had promised “Sixty days of decision,” a distinctive Canadian flag at last, and a comprehensive national health-care policy and pension regime with applicability throughout the country (“portable pensions with leather handles,” as Diefenbaker said, with the same gift for associative words with which he habitually referred to Liberal pollster Peter Regenstreif as “Peter Ribbentrop”). The Liberals came in masquerading as a Kennedyesque new wave, but at sixty-six Pearson was only two years younger than Diefenbaker, and while he and a few of his colleagues were seasoned King-St. Laurent veterans, most were untried. Paul Martin and Lionel Chevrier were back, at external affairs and justice, and Jack Pickersgill as secretary of state and a memorably able and colourful leader of the House. Paul Hellyer was at defence, and Howe’s old deputy, Mitchell Sharp, very competent at trade and commerce. The new faces from Quebec were led by Guy Favreau and Maurice Lamontagne, intelligent men but completely inexperienced to aspire to the mantles of Lapointe, Cardin, and St. Laurent. Chevrier was an esteemed stopgap, and none of them had any hold on Quebec public opinion. The star of the new team, upon whom all eyes were fixed, was the party platform and campaign chairman and minister of finance, eminent accountant and public policy advocate Walter L. Gordon. It was an intelligent and accomplished front bench, but not exactly dynamic, quite accident-prone, and overconfident opposite an opponent they thought they had vanquished but who was pawing the ground and snorting fire and had already rung the bell for the rematch.

  7. The Creative Agony of the Pearson Government, 1963–1966

  The new government had initially thought of promising one hundred days of decision, but as that period of time is best known for the events that culminated in the Battle of Waterloo, Walter Gordon shrunk it to a more sonorous and action-packed sixty days. (Ninety days might have produced better results.) Pearson had successful visits to Harold Macmillan and John F. Kennedy at Hyannis Port, and relations with both countries were quickly back to normal. This was Pearson’s strongest suit. He reversed Diefenbaker’s hostility to the European Economic Community and Britain’s participation in it, perhaps rather too selflessly and over-influenced by his predilection to trust such supranational institutions. And he confirmed to Kennedy that Canada would accept atomic warheads in its NATO and NORAD forces. This aroused severe criticism in leftist circles, including the dilettantish Montreal writer and well-to-do inheritor Pierre Elliott Trudeau, who wrote in (and co-founded) the liberal monthly Cité Libre of Pearson, “He had nothing to lose except his honour. He lost it.”42 In fact, it was the promised, contracted, necessary, and wise course. Former defence ministers Pearkes and Harkness, rugged old officers to the end, each lived on to the age of ninety-six and were fully vindicated, and the acceptance of atomic warheads was one of Pearson’s best decisions as prime minister and most astute political moves.

  There were other steps that fulfilled some of the expectations raised by the fanfare about a decisive new government getting off to a fast start. Territorial waters were extended to twelve miles offshore, which pleased the fishermen. A number of new agencies were established or announced that were going to attack regional economic disparities, and the Economic Council of Canada revealed the contemporary infatuation with government planning, but it would have moments of constructive relevance. And, announced shortly after the sixtieth day, but planned from the start of the new government, the Royal Commission on Bilingualism and Biculturalism was established. It would be co-chaired by university chairman and former head of the CBC, Davidson Dunton, and Le Devoir editor and former politician André Laurendeau. An outline pension scheme for the country was revealed, there was important progress on a shared use by Canada and the United States of the power and water resources of the Columbia River, where the Americans and British Columbia had conflicting ambitions, and five maritime unions were placed in trusteeship as a first step to end a good deal of violence in the maritime unions of the Great Lakes.

  But on day fifty-three, June 13, 1963, Walter Gordon presented his budget and the wheels came off the new government in all directions. Gordon had told his deputy minister, Kenneth Taylor, that he would be departing finance but didn’t make the change right away. His officials were hostile to much of what he wanted to do, especially in using the tax system to discourage greater American control of the Canadian private sector. Gordon was a Toronto gentleman from an old family, soft-spoken and courteous, head of the large accounting firm Clarkson Gordon, and a considerable intellectual in his fields of industrial and economic policy. He was an old friend of Pearson and had a blank cheque in the approval of the Toronto Star. But he was not by nature a combative person, and he was venturing into policy areas where, to be successful, he would have to be as close to a rabble-rouser as so genteel, prosperous, and calm a country as Canada could accept. That was not Walter Gordon’s style. He was closer to Diefenbaker’s reservations about the United States – though not for the same reason of umbilical attachment to Britain and the monarchy – than he was to the traditional Liberal Party affection for America. And he was closer to the NDP’s nationalism than was Pearson; though Pearson was closer to the NDP’s socialist ambitions than was Gordon, a wealthy Bay Street capitalist after all, if a pretty theoretical one. He was rushing into a hazardous area without the support of his department, and without anything more than the superficial solidarity of his leader and colleagues. Gordon set out to reduce the deficit and clean up the fiscal mess left by Diefenbaker (against the wishes of Diefenbaker’s finance ministers, Fleming and Nowlan) and start on a very tentative program of economic nationalism. In this, he was the victim of the previous government’s disastrous imbroglio over defence issues, and the Canadian public was in no mood for more strained relations with the United States. In the circumstances, he should not have been overly ambitious in this budget and should have prepared his reforms very carefully, should have thoroughly prepared opinion, and led a united department and cabinet in his next budget. Instead, Gordon had over-imbibed the nectar of Pearsonian reform and even radicalism (which was rarely even rhetorical, much less real) and hurtled into a high-explosive minefield in a chronically anti-controversial country. He would pay the price for centuries of Canadian passivity opposite the Americans, rippled only every few decades by reciprocity and atomic weapons.

  He had brought in four helpers in preparing th
e budget: Geoff Conway, a Canadian at Harvard; Martin O’Connell and David Stanley of Toronto financial firms; and Rod Anderson from Gordon’s own accounting firm. They all took oaths of secrecy, which they honoured, and were unpaid by the government. The budget raised revenues in part by ending the suspension on the sales tax on building materials. Since Gordon was trying to stimulate economic activity, there were better ways to achieve the same end. The budget also altered the tax code in ways that Gordon, as an accountant, had long felt were appropriate (expense and executive automobile allowances, and so on; tokens, but probably not bad politics). It would spread some money around less favoured regions through accelerated depreciation allowances, but most controversially it proposed to alter the non-resident dividend tax and encouraged foreign-owned companies to sell some of their interests to Canadians, up to at least 25 per cent, raised the tax rate on the dividends of those that did not, and imposed a 30 per cent foreign takeover tax (a bit steep in the circumstances).

  It was a well- and sensibly intended group of objectives, but a bold stroke for Canadians and over-hastily formulated. Pearson assured him of his full support, but Pearson was a diplomat, an even less reliable source of expressions of solidarity than politicians, some of whose mores he also, of course, had acquired (unlike Louis St. Laurent, a man of principle always). A few days before the budget speech, Pearson and Gordon had lunch with the governor of the Bank of Canada, Louis Rasminsky, who was afraid of currency destabilization and possible American retaliation for Gordon’s very gentle and incremental measures, but Pearson told Gordon to stick to his guns.

  Since the civil service, when peeved, is hugely indiscreet, Douglas Fisher, the NDP member for Port Arthur, Ontario, who had defeated C.D. Howe in 1957, put questions to Gordon in the House of Commons on June 14 about his reliance on outsiders, and Gordon answered somewhat coyly. He was not an experienced parliamentarian, was a shy man personally, and did not take a crash course on the parliamentary ropes from Pickersgill, Martin, and Chevrier, who could have warned him how to steer somewhat clear of Diefenbaker, who was deadly when dealing with a distressed parliamentary opponent. The Opposition tore into Gordon, and there were allegations of budget leaks, a serious matter in the parliamentary system. Gordon’s colleagues started waffling, and he probably became the victim of the envy of long-time Liberal MPs who resented the newcomer’s prominence. At a meeting at the prime minister’s country home at Harrington Lake, near Ottawa, everyone deserted Gordon except Lamontagne, health and welfare minister Judy LaMarsh, and the agriculture minister, Harry Hays, of Calgary (though Mitchell Sharp had spoken effectively for him in the House on June 24).