by John English
Margaret wept late that election night, perhaps from pain, perhaps from pleasure. It had been a brilliant success—and so had she. The next day, however, her phone never rang. She waited; no call came. Still flush with excitement, tired from travel, confused about her future, Margaret knew that something in her “broke that day.” She said, “I felt I had been used.”35
* Evidence that Trudeau tried to conceal the fact that he had prevailed over the Finance Department and Turner is found in Eugene Whelan’s memoir. Whelan, who became minister of agriculture in 1972, wrote: “One thing I learned right away was that Trudeau never overruled his finance minister…. Time and again I’d lose, no matter how right I was, because Finance was opposed. And Trudeau would usually turn to me and say that familiar line: ‘Sorry, Gene, you lost another one.’ Sometimes I’d get so mad I’d just slam my books together, stand up and walk out.” Whelan particularly disliked Simon Reisman, who served as Turner’s deputy minister, and called him “overrated.” Eugene Whelan with Rick Archbold, Whelan: The Man in the Green Stetson (Toronto: Irwin, 1986), 199–201.
* For example, the oil companies much preferred to import Middle Eastern and Venezuelan oil into eastern Canada because that commerce was highly profitable. When the Venezuelan government began to demand a higher share of income, the multinationals, faced with the possibility of higher prices, chose eastern Canada as the export destination for that oil because they could maintain higher prices in eastern Canada than in the United States, where cheaper Middle Eastern oil was consumed. The U.S. government strongly supported this policy, as it meshed with U.S. foreign policy interests in Venezuela (J.G. Debanné, “Oil and Gas Policy,” in The Energy Question: An International Failure, ed. E.W. Erickson and Len Waverman, vol. 2 [Toronto: University of Toronto Press, 1974]). Debanné gives several other examples of how broader multinational interests affected the exploitation of Canadian resources. Other writers, however, have argued that the development of Albertan oil depended on deals with the larger multinational companies with great financial resources and oil development skills. Alberta’s problem until the 1970s was selling its higher-priced oil in the midst of American quotas and restrictions on exports to the United States, which had its own oil industry.
* In Canada in 1950, petroleum supplied 29.8 percent and natural gas 2.5 percent of Canadian primary energy consumption, while coal and coke supplied 47.6 percent. In 1970 the comparable figures were 48.1 percent, 16.5 percent, and only 10.7 percent for coal and coke. As a result, city air was cleaner and the dreaded task of stoking the coals at 5 a.m. largely ended. The statistics also reflect the vast rise in automobile ownership and the growth of the suburbs. See G. Bruce Doern and Glen Toner, The Politics of Energy: The Development and Implementation of the NEP (Toronto: Methuen, 1985), 86.
* Interestingly, Desmarais added, “You once told me that being prime minister was a lot of fun. I believe you—run like hell, you will win.” Paul Desmarais to Trudeau, nd [June 1974], TP, MG 26 020, vol. 17, file 14, LAC.
CHAPTER NINE
MID-TERM PROMISE
As a boy, Pierre Trudeau had learned in his Brébeuf classics courses that victories were sometimes pyrrhic, where the costs to the victor were greater than the gains. On election night, July 8, 1974, he relished his triumph, but his unexpected majority came with high costs. Three problems persisted, and the successful campaign probably exacerbated them. First, the budget that sparked the election had denied Alberta the right to deduct its new royalty charges from federal taxes. During the campaign, Premier Peter Lougheed had responded angrily to the Liberal policy, as did most Alberta voters. A difficult relationship had become worse, and the impact of the quarrel between Ottawa and the West promised to injure the tender structure of Canadian federalism. Second, Trudeau had cleverly mocked Progressive Conservative leader Robert Stanfield’s proposal for wage and price controls, but inflation remained the major issue for the new government. Moreover, the powerful Finance Department and John Turner, its popular minister, were unhappy with the budget and with Trudeau’s presentation of economic issues during the campaign. In a crisis, the flimsy unity within the minority government could shatter in the new majority government, since there was no longer need for great cooperation between the parties to prevent the government’s fall. Third, for Margaret Trudeau, the campaign’s strains broke the fragile bonds that had maintained her mental health and marriage.
Margaret realized much later that she suffered from bipolar disorder, and she became an eloquent advocate of better treatment of the disease, which was earlier known as manic depression. In 2006 she recalled that she had experienced mild depressive moments as an adolescent but had none in her first two years of marriage. However, as one journalist has described it, “after the birth of her second child, Sacha, on Christmas Day in 1973, [Margaret] was struck with an overwhelming depression. People, particularly her husband, kept telling her that she had ‘no reason on earth’ to be unhappy. She had a gorgeous new-born and she was totally pampered. But she found herself crying all the time and unable to get out of bed.”1 Doctors diagnosed Margaret’s problem as postpartum depression and medicated her heavily. Meanwhile, Pierre was planning for the election, and Margaret was worried about its outcome. Against Pierre’s wishes, she decided that she must join the campaign: “He insisted that politics was his work and the children and the houses my work, and to mix them would only confuse our lives.” Margaret, however, would not relent, believing that if she “fought the election by his side, demonstrating on every platform and in every convention hall of the country just how happy we were together and what a devoted family man he was, then Pierre would have a better chance to convince people that he was the man to lead them.” She was overwhelmingly right.2
But the decision to campaign may have been wrong in terms of the personal toll. In Margaret’s own words, “my rebellion started in 1974.” As she later noted, her “high-spirited” style was present from the moment she met Pierre in Tahiti, and “being bipolar doesn’t mean that you’re constantly in a state of mental illness.” However, bipolarity brought wild swings, which could be “either unusually low or extremely—inappropriately—high.” The first “visible explosions” were “directed at the official life,” the “grotesquely formal occasions [that] were forced upon us.” For Margaret, life at 24 Sussex became, in her words, “a long tunnel of darkness,” a profound loneliness “coupled with the pressures of public life while trying on my own to manage the symptoms of bipolar depression.”3 Pierre was baffled, uncertain how to approach her illness, and hopeful that pharmaceuticals could heal her.
A close reading of the period before and after the 1974 election reveals how the “tunnel” opened. By 1973 the Trudeaus had become accustomed to the ways of Ottawa and exhilarated by the foreign travel that became part of Pierre’s official life—as when they left to sample the exotic in China. They also began to relish their intimate family settings, particularly at Harrington Lake. In pictures of those happy days, Pierre, Justin, and the pregnant Margaret seem deeply engaged with each other, and their mutual affection is obvious. Yet even in those times, Margaret tussled with staff, resented the security requirements, and fretted about Pierre’s work ethic, which so often meant exclusion.* Margaret enjoyed watching television, for instance, but each night Trudeau brought home briefing notes and spent most of the evening reading and annotating them. Duties prevailed even as they tried to be together. The result, in Margaret’s words, was that “a visitor peering through the window of the sitting room would have seen Pierre poring intently over the contents of one of his seven brown boxes and me curled up in front of the television with an enormous set of earphones, like a disc jockey watching a silent movie.”4
The cause of Margaret’s depression the morning after election day is clear: she realized that Pierre would now stay in politics for several more years. A majority government guaranteed five years, although most prime ministers call an election in the fourth year. Before the election she h
ad feared a Liberal loss; after the vote she regretted the consequences of the Liberal win. Now no light was visible at the end of “the tunnel of darkness.”
Margaret Trudeau was not alone in her disappointment after the election victory. John Turner also knew that a Liberal win would reduce his chances of reaching the Prime Minister’s Office. Campaign co-chair Keith Davey had bluntly told him that he would become “this generation’s Paul Martin” if Trudeau got his majority. Nevertheless, Turner campaigned nationally and effectively, and like Margaret, he apparently felt that his efforts were not appreciated. He joined Trudeau on election night at 24 Sussex, but there were no warm expressions of gratitude, and he felt excluded by Trudeau’s campaign team and close friends, who thought of him “as a jock with political charm.” The early days when the Turners and Trudeaus vacationed together in the Caribbean had not broken down the barriers between them. Memories of the 1968 leadership convention persisted, and the recent years of minority government made the men ever more distrustful of each other’s intentions.5 Opposition taunts about the “real leader” of the Liberals continued to irritate Trudeau.
Both men were caught up in the tides of inflation and unemployment that swept not only Ottawa but the entire Western world in the early 1970s. The strong currents tossed the Department of Finance toward more conservative terrain. Turner worked effectively with the Americans during this period, particularly Treasury Secretary George Shultz, and in the late Nixon period these finance officials were strongly influenced by Milton Friedman and the monetarist Chicago School, with its pronounced opposition to state intervention. With Shultz’s support, Turner became a major international figure in the negotiations following the OPEC crisis. He continued to work closely with another economic conservative, William Simon, Shultz’s replacement at Treasury, and at Simon’s suggestion he was appointed chair of the International Monetary Fund Interim Committee dealing with the huge imbalances caused by the energy crisis. However, these successes brought little credit in Ottawa, and the associations Turner forged even raised some doubts. Not surprisingly, Turner worried increasingly about his position.
Turner’s deputy minister, Simon Reisman, a blunt, cigar-smoking civil servant who swore like a drill sergeant and liked a good fight, did not help matters. Reisman’s ego was legendary, and Trudeau’s reforms, which permitted senior officials to present to Cabinet committees, gave Reisman the forum he savoured. Mitchell Sharp recalled one meeting of Priorities and Planning at which Reisman lectured the ministers. After a Reisman diatribe, Sharp said, “Mr. Prime Minister, isn’t it wonderful to listen to a civil servant who knows his place.” All laughed, including Reisman, but “after a short pause, he returned to the attack, undeterred.” More troubling was evidence that Reisman had begun to loathe the prime minister and his party. During the 1974 election campaign, as Keith Davey was poring over some newspapers during a flight, the passenger beside him said, “You’re obviously interested in politics.” Davey nodded, and the passenger asked what he thought the outcome of the election would be. The ebullient Davey said the Liberals would do well in Ontario, and the passenger exploded: “No way! Take it from me. Every Toronto minister has had it! They’re gone!” As the plane landed, he introduced himself: “I’m Simon Reisman.”6
Some doubt the anecdote’s accuracy, but it conveys the increasing suspicion surrounding the Finance Department and Reisman’s growing anger directed against Trudeau and his office. During the election campaign, Conservative leader Stanfield attacked Reisman and, more particularly, the department, blaming Finance for the rampant inflation of the time. This widespread distrust of Finance and, to a lesser extent, the Bank of Canada had developed during the first Trudeau government, when their policies appeared to have created the economic problems that hurt the government in the 1972 election. Stanfield was not the only one with doubts. Trudeau, too, increasingly relied on outside advisers, most notably Albert Breton, who now, as a University of Toronto economist, was often sharply critical of government economic policy. When he read the draft of the post-election Speech from the Throne in December 1972, for example, he warned Trudeau that it was “so much at variance with what I believe are your own views … and certainly with the image that the Government wishes to project” that he recommended some changes—which Trudeau accepted.7
Fundamentally, Reisman, once a socialist, now agreed with the monetarist school’s arguments against large bureaucracies, regulation, and interventionist governments. Trudeau, however, remained committed to government intervention to deal with regional and individual inequities and believed in the importance of government as a “countervail” against the forces of business and labour. Although Trudeau and Reisman shared a suspicion of economic nationalism and of “the bureaucratic phenomenon,” their differences rapidly began to overwhelm their similarities after 1972. Turner, a pragmatist and, increasingly, the spokesperson for business in the Cabinet, was caught in the middle.
After the election, Trudeau faced pressures to change the personnel at Finance and to strengthen the economic staff close to him. Reisman had created many enemies, notably Davey, who was at the peak of his influence after the electoral triumph. Breton believed that Finance, including Turner, needed a complete overhaul and that Trudeau’s own economic staff should be strengthened to counter the dominance of Finance within government operations. The Department of National Health and Welfare, under Marc Lalonde, fought Finance bitterly over the reform of social welfare, and when Trudeau proposed a compromise, Turner replied that in the troubled financial situation developing in the second half of 1974, Lalonde’s proposals cost too much.8 Serious political trouble loomed on the horizon. During the campaign Trudeau had mocked Stanfield’s dire warnings about the economy, but soon after the election, inflation rose continuously and economic growth stalled. Now his memorable words—“Zap, you’re frozen!”—haunted him as he wrestled with a Consumer Price Index that rose 12.4 percent in 1974 while, in real terms, the economy expanded only 3.7 percent, compared with 6.8 percent in 1973.9
Trudeau was befuddled; economists were confused. Even Marshall McLuhan had inflation on his mind, and he sent Trudeau a long document with his “thoughts on inflation and crowd dynamics.” As Trudeau read it, he underlined these words: “Today the fact of the increasing prices has little or nothing to do with the old laws of supply and demand, but much to do with the new media.” McLuhan suggested that the current economy had a “great increase of scope accompanied by the panic sense of the loss of control and identity” and that “one obvious cause of inflation is the media-made consciousness of it.” McLuhan, like Trudeau, sensed that inflation was driven by expectations, which were devilishly difficult to manage.* With divided counsels among his advisers and uncertainty in his own mind, Trudeau now grasped anxiously for solutions, particularly one that would maintain his government’s credibility after his ferocious denunciation of wage and price controls in the election campaign.10 Finding it would not be easy.
Trudeau’s other post-election dilemma was how to handle the West, particularly Alberta, which had spurned Trudeau’s Liberals entirely in the July election. In August, when Trudeau finally responded to the letter Lougheed had sent during campaign, complaining that provincial royalty payments could not be deducted from federal corporate taxes, the prime minister was direct and unapologetic: those deductions would not be allowed. It was Trudeau’s responsibility to protect the country’s revenue base, and the royalties threatened to undermine it. Moreover, the two-price system whereby Canadians were shielded from the higher world price for oil was essential to ensure equity among Canadians. In the increasingly angry debate, Trudeau and Lougheed came to symbolize the interests of their respective governments. In Ottawa, Cabinet discussions reveal impatience with Lougheed and particular irritation with the links between American interests and the Alberta government. In January 1974, for example, Lalonde had argued that if the negotiations did not go well, the Cabinet should consider the “take-over of the control
of the oil and gas industry on the grounds of the public interest.” In the circumstances, it was unfortunate that Alberta lacked representation in both the Cabinet and the Liberal caucus. Lougheed was no pushover, however, and, increasingly, American energy interests looked warily at Trudeau’s government as they began to see Alberta as their effective voice in Canada.11
It was a trying time for all Western governments as the postwar boom came to an end and no elixirs could be found to renew its vigour. In the United States, the Nixon presidency lurched toward its demise, which came dramatically on August 9 with the president’s historic resignation. European governments also struggled with the energy crisis and political discontent. Whatever Trudeau’s difficulties, Canada’s economic situation in mid-1974 remained among the best in the world. While others shared inflation and faltering economic growth, Canada’s unemployment remained relatively low, and its economy seemed relatively strong. The New York Times hailed Trudeau’s election as “an impressive demonstration of the health and vibrancy of its democratic institutions and practices” and claimed that Canadians had “sharpened their identity as a united people and nation.” Few Canadians would have enthusiastically agreed, but, to an outside observer, Canada seemed an oasis of civility and solidity.12
Had Trudeau left office in 1974, he would have served longer than the majority of Canadian prime ministers. Although his successor would have faced serious problems, Trudeau could have pointed to major achievements: reform of the Criminal Code; recognition of China; establishment of Arctic sovereignty; a major role in the transformation of the Commonwealth and the Francophonie; reform of parliamentary institutions and election financing; steadfast promotion of official bilingualism; and, ironically, the channelling of separatist radicalism and violence into a democratic political movement—an achievement he shared with René Lévesque. Now he had at least four more years to change Canada and a mountain of challenges to overcome.