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Noble Ambition

Paul Martin’s former chief of staff comes out swinging: It’s the economy, stupid, and my boss knew it

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nato allies and has our soldiers doing disproportionate duty in Afghanistan’s danger spots. More over, the cynical, hurried vote to extend the mission to 2009 represented an abuse of Parliament. Harper, seemingly anxious to let the Americans off the hook in Afghanistan, put politics above the national interest.

Martin will pursue this matter, as he will pursue others. Nearing seventy years old, he is wiser now about the politics of politics, but the passage of time will produce a political epitaph that stretches far beyond the simple construction, “He lost.” Martin will not run for elected office again, and the federal Liberals will find him tough to replace.

Paul Martin is a socially progressive fiscal conservative. His sensibilities and political instincts are those of a new Liberal who, much like a Red Tory, believes in targeted public-sector investments based on understanding where world economies are moving. The point is to look outward, not inward. Over and above the headline-grabbing appetites of those in the race to lead, for the Liberal Party of Canada to win the next election it had better look closely at the Martin economic record. Martin’s policies fitted Canada’s needs for twelve-plus years, and, as the veil is lifted on Prime Minister Harper’s economic plan, it is clear that the Conservatives see wisdom in many of Martin’s core economic ideas.

Too shrewd to admit to theft, the Harper government’s economic agenda — investments in post-secondary education and research and development (especially for knowledge-based industries), infrastructure funding in British Columbia to build a gateway to Asia, recognizing cities as economic engines, etc. — has been lifted almost verbatim from the 2005 Liberal “Plan for Growth and Prosperity.” Sounding positively Martinesque, here’s Finance Minister Jim Flaherty in a recent speech in Kingston, Ontario: “By providing predictable, long-term funding for postsecondary education, we can train our future researchers, scientists, and innovators and have a better chance of keeping them in Canada…. In the [Greater Toronto Area] alone, it is estimated we are losing $2 billion a year due to inefficient infrastructure.”

The light-fingered pilfering does not end with the economy. On the constitutional front, there are echoes of Martin’s openness to Quebec in Harper’s early overtures. Martin, against party orthodoxy, supported the 1987 Meech Lake Accord because he believed it represented an appropriate accommodation for Quebec and that it would close the circle and allow Canada to move beyond backward-looking national unity debates that threatened the country. Such beliefs helped shape Martin’s support for asymmetric federalism, the sensible view that in a country 5,500 kilometres across, it is simply more efficient to define national goals at the federal level but leave it to provinces to determine how best to achieve them.

As the ten-year, $41-billion Health Care Accord, signed in September 2004 by ten provincial and three territorial governments demonstrated, this can be done without sacrificing the role of the federal government in creating and sustaining national programs. To be sure, as provincial health care systems put the reduction of wait times for specific services at the top of their to-do lists, other pressures emerge, but wait times are coming down, and the various systems are increasingly functional. The success to date of the accord (which has funding escalators tied to system performance and cost-control incentives built in) has removed health care as a constant public-policy problem. Furthermore, in the wake of the Supreme Court of Canada ruling in the Chaoulli case, which established that if the state cannot provide timely service for critical medical procedures, people have the right to seek them out from private providers, Martin’s move to establish achievable benchmarks backed by secure federal funding was prescient and will do much to preserve public health care. Perhaps most importantly, the accord saw Quebec sign a national deal. Martin’s approach to federalism — one issue at a time and avoiding sweeping gestures — moved the province closer to union with the rest of the country.

Though it borrows from Martin’s openness, Harper’s strategy will lead to anything but unity. Exploiting a Liberal opposition in the throes of finding a leader and nailing down a platform, the Conservatives are assiduously rolling back social programs and gutting the progressive aspects of Liberal reforms. Plans for universal child care, gone. The $5.1-billion Kelowna Accord, designed to close the growing gap between aboriginal Canadians and mainstream society, shelved. The federal Court Challenges Program, which among other things allowed francophones outside of Quebec and anglophones inside to defend their Charter language rights, gone. Status of Women Canada and funding for museums, gutted. Funding for medical-marijuana research, gone. It is a long list.

Harper is trying to rebrand Canada. He will deal with the “fiscal imbalance” — a non-issue if one accepts that the federal government has a part to play in the nation’s business — by getting the federal government out of the way and voiding Ottawa’s traditional role in sharing prosperity. As is evidenced by the shelving of the Liberal government’s Kyoto Protocol targets, Harper will abdicate leadership and responsibility on national and international issues such as the environment. The provinces will get more money, but the tax base for government services will be whittled away. In short, Harper is taking advantage of the electorate’s desire to teach the Liberals a lesson by hollowing out the federal government through the devolution of more and more responsibilities to the provinces with no strings attached.

Such an approach is sure to gain favour with provincial premiers, some of whom will trumpet a new era of cooperation, until they realize what municipal governments have realized: that the downloading of responsibilities requires local governments to embrace the politically unpalatable need to tax more heavily. Nonetheless, Harper’s message and strategy represent a potent mix, and unless the federal Liberals match it, he will be re-elected and may even receive his much-coveted majority government. At that point, all bets are off.

At a time when Canada has never been so involved in international affairs — and necessarily so — Harper’s vision of a hollowed-out federal core, if realized, will prevent us from meaningful engagement in the years to come. Understanding the challenge posed by his devolution-of-powers agenda and the threat of market fundamentalism to come requires Liberals to step back in time and analyze why Paul Martin was central to the party’s victories in four straight elections and how federalism remained intact.

One was a political novice bursting with energy and new ideas; the other was a canny veteran representing the Liberal status quo. It was the 1990 Liberal leadership race, and the differences between Paul Martin and Jean Chrétien were clear. Chrétien Liberalism was rooted in central Canada, in a centralized federalism, in wealth redistribution, and, for the sake of national unity and winning support in vote-rich Ontario, in being tough on Quebec. It was a narrative known to one and all, and there was comfort and security in it.

Paul Martin had a different vision, a different idea of Canada. Looking beyond national borders and debates, he saw enormous change. The Cold War had ended, Western democracies appeared ascendant, and globalization was becoming a fact of life. Given Canada’s relatively small internal market and its export-driven economy, protectionism was not an option. At the same time, economic diversification was essential. Getting the fiscal house in order would make Canada less beholden to the fluctuating demands of foreign economies and make possible further spending on social programs.

Martin believed that to be a player on the emerging global map, Canadian federalism had to be flexible enough to allow provinces to pursue national goals in their own way — it needed a nationalism without walls. The West had to be encouraged to grow, and economic policy would have to focus on wealth creation as well as redistribution. Key concerns had to be Canada’s growing deficits, crippling accumulated debt, and skyrocketing interest rates. Brian Mulroney’s economic record had left a gaping hole that required urgent attention.

Nonetheless, Liberals chose old style over new ambition. In retrospect, Martin never had a chance. Despite a rapidly changing world, there is always in the Canadian body politic an incipient conservatism: embrace the world, maybe, but cleave strongly to “Canadian values,” to the security of our social safety net, to our differences with the United States. Mulroney and the Progressive Conservative Party had tied Canada to the American colossus through free trade, but they had also overstepped: Mulroney had offended Canadians’ deeply felt sense of distinctiveness by being too cozy with Ronald Reagan. It was time, said federal Liberals, for an economic nationalist and social progressive; it was time for Jean Chrétien, the most able candidate in the Trudeau tradition.

It wasn’t Jean Chrétien who turned me into a Martin supporter — Chrétien was clearly a talented politician. It was the grip that Pierre Elliott Trudeau had on the Liberal Party and the consequent lack of focus on the economy. Then, and perhaps still. It is not that the current front-runners to lead the party don’t have economic platforms worth considering — they do. It is that, from the beginning, the economy and the position that a strong economy allows a country to play in the world, has not been central to their campaigns. Indeed, the focus has been on the personal and professional backgrounds of the candidates — who is best suited to debate Harper and ultimately to defeat him. On the policy front, the emphasis has been on foreign affairs and even constitutional reform, even though to win an election, economic stewardship is paramount. The Liberals contesting the leadership represent an impressive array of talent, but for a long while it seemed as if they were grasping for euphoric Trudeau moments, rather than listening to the quiet industry of Paul Martin. Happily, this began to change after the delegate-selection meetings, when the prize became positioning for the leadership convention. On December 3, 2006, may the candidate with the most detailed and forward-looking economic plan emerge as Liberal leader.

The Liberals were an effective opposition between 1990 and 1993, and their culminating gamble paid off. In the 1993 election, just after the writ was dropped, the Liberals issued their “Red Book,” a full account of the policies they would pursue and how they would govern. Antipathy to Mulroney had grown, the electorate was tired of constitutional battles, and the Liberals won 177 seats. The Tories, under a beleaguered Kim Campbell, were reduced to two seats. They had been crushed — the old alliance of Quebec nationalists, fiscal conservatives from Ontario, and social conservatives from the West had splintered. The principal authors of the “Red Book” were Chaviva Hosek, the director of the Liberal caucus research bureau, and Paul Martin.

Ever the shrewd tactician, Chrétien rewarded Martin by installing him as finance minister. So long as he was the keeper of the country’s books and continued reducing the deficit, Bay and Howe Streets remained content and the right had little leverage. Chrétien was free to do what he did well: retail politics. Martin wanted the top job, to be sure, but if he had to bide his time to get another shot at the title, then so be it.

It was, in fact, mostly a good marriage and not the private hell for Martin that media watchers who ache for political theatre insisted was the everpresent reality. Through the late 1990s job growth soared, the deficit disappeared, and Martin’s reputation as an economic manager became fixed in the country’s mind. There was work to do — balance the budget, see that education and research and development were properly funded, and pursue his internationalist vision by regularly meeting with the world’s other finance ministers. Martin was building profile.

With the right divided, no effective opposition could be mustered to call the Liberals on 1993 policy promises that they did not act upon. The big scare remained Quebec secession, an agenda promulgated by the Bloc Québécois in the federal House of Commons. There is no doubt that the Liberals miscalculated the anger felt by Quebeckers after the rejection of the Meech and Charlottetown accords, and the hair’sbreadth escape in the 1995 referendum caused federalists to begin preparing at once for the next round. But the evidence coming from Quebec and the rest of the country after the referendum was clear: we are quite determined to talk about other things. This is why Martin was cautious about the Clarity Act. He worried that it represented an unnecessary provocation.

Many expected Martin to rise to the prime minister’s chair in 2000. It did not happen. Chrétien loved the job, and the party’s polling numbers remained solid. But Chrétien did not appreciate the growing levels of support within the party for Martin. The cleavage began manifesting itself, but it was less fratricide, as some had it, and more a battle of ideas about the future. Martin would have to wait three more years.

I joined Paul Martin’s team in Finance as his chief of staff in early September 2001. On Tuesday, September 11, I entered the Ottawa office for the first time. Moments before, the second plane had crashed into the World Trade Center. Everything changed, and it didn’t.

Despite polls clearly indicating that the desire for change had deepened, in the 2000 election Canadians showed greater confidence in the Liberals than they had in 1997. The Liberals were delivering regular surpluses, and with the austerity measures largely behind them — program cuts to eliminate the deficit and start to chip away at the debt — the party could now better address social and environmental concerns. Secession talk in Quebec had waned. The Bloc Québécois had won only thirty-eight seats and had lost its official opposition status to the Canadian Alliance, which had copped sixty-six seats, though just two in Ontario and none east of Ontario. The ndp received just 8.5 percent of the popular vote. It, along with the PCs (twelve seats), was in danger of becoming irrelevant.

Still, there were holes in the Liberal record. Canada’s foreign-aid spending bespoke an insular country, not a growth leader among the elite industrialized nations. Spending on infrastructure, transit for cities, post-secondary education, and research and development were all sorely needed and, in the face of surpluses, demanded. While neither the right nor the left posed an immediate threat, the Liberals had to recognize growing discontent out west and contend with mounting pressure from the health care field, from environmentalists, and from a growing big-city movement led by Winnipeg mayor Glen Murray and Toronto city councilor Jack Layton. Liberals could not take soft-left support for granted.

September 11 reordered the world and made the centre harder to hold. In the weeks and months that followed, George Bush repeated his familiar mantra — “You are either with us or against us” — and, in large measure, the right coalesced around his maximalist agenda, while the left (including soft Liberals) united in opposition to it.

On February 27, 2002, Chrétien returned from Europe and announced that he had no intention of retiring early. Three months later, just before a June 2 cabinet shuffle, he ordered ministers and leadership hopefuls to stop fundraising. Martin was ousted from Cabinet, replaced as finance minister by John Manley. It was constructive dismissal, and the struggle for the future direction of the Liberal Party began in earnest. While Chrétien announced in late August that he would not seek a fourth mandate, he would stay on through 2003 and celebrate his fortieth anniversary in federal politics as the prime minister.

Martin steamed ahead. Unencumbered by a cabinet portfolio, he was freer to campaign. Change was on his mind, polls indicated broad support for Martin as prime minister, and in its Christmas 2002 edition, Time proclaimed him its Canadian newsmaker of the year.

Martin’s popularity and the liberating effects of Chrétien’s announced retirement seemed to spur the prime minister into action. Martin’s campaign, officially launched in early March, was upstaged by glowing headlines for Chrétien, who on March 17 sealed his legacy by saying that Canada would not participate in the US-led invasion of Iraq. Chrétien went further still, arguing that the invasion required the support of the United Nations Security Council and announcing that diplomacy was “bringing positive results” and that “I still feel given a few more weeks disarmament would have been achieved.” Soon afterward, Chrétien endorsed Kyoto and moved to decriminalize marijuana. His policy statements increasingly reached out to the progressive wing of the party, and he loved the attention. Trudeau’s ghost had returned.

In a foretaste of the harsh scrutiny to come when he became prime minister, Martin’s ownership of Canada Steamship Lines — long a matter of public disclosure — emerged as an issue. Martin eventually transferred the company to his sons, saying his “only business will be the public business.” In politics, positioning is almost everything, and Martin was carving out territory of his own.

In September 2003, Martin put meat on the bare bones of his leadership bid by laying out his “public business” plan for the ever-rising surplus. It built on his record and charted a new direction. Unlike Chrétien, who was advocating using the surplus to boost social spending and keep taxes as they were, Martin promised to reduce taxes and the debt, and to generate revenue by boosting productivity through targeted investments in research and development as well as key elements of the social infrastructure. Martin would bring in change and stem support for the right by hewing to the fiscally prudent roots he himself had established. The Liberal Party seemed to agree, and against only one opponent, Sheila Copps, Martin won 93 percent of the vote at the November Liberal leadership convention. It was a ringing endorsement. On December 12, 2003, he was sworn in as prime minister.

Martin felt confident. It was finally his time. What he didn’t know was that some serious baggage had been left behind.

By the time the 2004 election rolled around, the right was united under the Conservative Party led by Stephen Harper, and it had fresh ammunition: the sponsorship scandal. New leaders succeeding long-term incumbents almost always have a tough time of it, and now this. The Liberals’ ethics and reputation for good management were being called into question, and the opposition wanted to link the scandal to Martin. The question they tried to put on everyone’s lips was how a Quebec MP and former finance minister could not know about the sponsorship program.

When Auditor General Sheila Fraser released her report, it caused a firestorm. Hundreds of millions of dollars had been mismanaged, and the smell of corruption was everywhere. Martin called a public inquiry, to be headed by Quebec justice John Gomery. Martin said that the scandal was “perpetrated by a very small group of ten to twelve people within the 14,000 who work for Public Works,” but few were listening. The next day, Conservative MP Jason Kenney rose in the House and said of Martin: “It sounds awfully reminiscent of Richard Nixon blaming a small unit within the White House for actions that he knew nothing about.” The Conservatives had scored, and scored big. Liberal support plunged seventeen points in two days. Over the ensuing months, for the press there was no other story. How could a party that authored the Clarity Act be involved in such murky business in Quebec?

Martin was blindsided. He knew nothing about the secret affair but felt that he had to restore public faith in government. Despite the compelling evidence gathered by Sheila Fraser that something was seriously amiss, Martin’s decision to call the inquiry was interpreted by many as an attempt to calm the anger of Canadians and to satisfy their demand for change by sacrificing the reputation of Chrétien’s government. In fact, Martin’s choice came from his belief that restoring the public’s trust meant lifting the veil — that this was a moral, not a tactical, issue. Nonetheless, the negative perception stuck, dogging Martin throughout the campaign leading up to the June 2004 election. The opposition parties, like the press, tasted blood, and it was virtually impossible for Martin to promote his agenda. While it was the right thing to do, calling the inquiry seemed to placate no one — especially in Quebec, where few believed that Martin was innocent, and many still don’t, even though Justice Gomery completely exonerated him.

The 2004 election results told the tale: a minority Liberal government, a strengthened Conservative opposition, a rejuvenated Bloc Québécois, and a whole lot of horse-trading between the Liberals (135 seats) and the ndp (19 seats) to keep the government from falling. While many insisted that Martin should have buried the sponsorship scandal, it is unlikely that we would have won even this fragile minority if he hadn’t called for a full inquiry.

It was a working summer, but the announcement of Martin’s cabinet brought the now familiar charges: friends rewarded and the old guard dumped. The new government was going to catch few breaks from a press eager for the Gomery inquiry to start naming names. The inquiry began in earnest on September 7, when the first witness appeared. Over the next nine months, fresh revelations kept the country’s attention focused on Liberal scandal, the headlines brutalizing the government and, often enough, Martin himself. He was in the fight of his life, but he counterpunched early and often: the inquiry would do its job, there would be full disclosure, heads would roll, and we would govern. On September 16, Martin inked the Health Care Accord. Against the backdrop of the scandal, it was a singular achievement, but not one that provided much respite.

A united front against the gathering storm was essential, as was a firm commitment to change how government operated. The impolitic outbursts of Mississauga MP Carolyn Parrish — telling Martin to “go to hell” and slurring the Bush administration — resulted in her expulsion, a risky move as the Liberals, assuming we could hatch a deal with the ndp, were one vote shy of holding the balance of power. But Martin stuck to his principles, and Parrish was ousted. In a majority government this type of thing generally plays itself out in private; in minority parliaments, MPs have more power and talk more openly, and the press and public get to see it all. On policy issues, plans have to be negotiated through the House, leaving the government open to attacks on nascent policies. It can be impossible to keep a lid on things, and the appearance can be extremely messy, as it was in our case.

The month beginning February 10, 2005, is telling. On that day, it was Martin’s turn to testify before the Gomery inquiry. He stated that he knew nothing about the awarding of sponsorship contracts and had played no role whatsoever in the program. He was forthright. Soon afterward, Martin outlined why Canada would not join the US Missile Defense Program. Child care agreements with the provinces were ready to roll. The budget delivered the eighth surplus in a row (a record), fully funded the health care deal, and gave gas-tax money to cities. On March 6, in a leadership review, Martin won the support of 88 percent of Liberal Party members. None of it mattered. The ridiculous sobriquet “Mr. Dithers,” popularized by the Economist in mid- February, stuck…and the Gomery inquiry rolled on.

The combined forces of the Conservatives and Bloc Québécois were two votes shy of being able to topple the government, and both Harper and Bloc leader Gilles Duceppe wanted to capitalize on the upcoming budget vote. The budget would also see another reduction in taxes, an expanded foreign affairs role for Canada, and investments in education, research and development, housing, health care, child care, and cities. It was a winner, but we needed to convince the public of its merits. The thoughtful but sometimes reticent Ken Dryden was pushed to sign child care deals with the provinces, the New Deal for Cities and Communities was being negotiated, and Stéphane Dion was selling Project Green, which had curried favour with the normally critical environmental sector. Still, we needed support in the House.

Martin got the ball rolling by calling Jack Layton, the ndp leader. It irked Layton that he was one vote short of providing the support necessary for a solid Liberal/ndp pact; he wanted that leverage and had, in fact, been sniffing around for a deal for almost a year. To get the budget passed, Martin was prepared to talk. The basic ndp positions were consistent enough with our own, and the strength of the surplus allowed us to agree on an additional $4.6 billion in social spending. The deal was made and ndp support clinched.

We were still short of a guarantee, but there was grumbling in the Conservative caucus from MPs unnerved by talk of regressive taxation and social-conservative values. We thought we could take advantage of this. (A small part of me — wisely ignored — wanted to risk everything, even the budget vote, because public opinion was turning against Harper’s shrill opposition to our attempts to produce meaningful legislation. Increasingly, the Conservatives were striking only one note — the Gomery inquiry — and the public was tuning out.)

I had never seen the House lobby so full. People normally the picture of stoic calm were biting their nails. Others were teary-eyed in anticipation. The budget vote was minutes away, and no one had any way of knowing the result. The outcome rested on how Independent MP Chuck Cadman voted. He was desperately sick with cancer and would, sadly, soon die of it. But his vote was crucial only because two days prior we had achieved the unimaginable. Belinda Stronach had been sworn in as the Liberal minister of Human Resources and Skills Development. (Awarding Stronach, a rookie MP, with a cabinet position was the right thing to do. It was her decision to cross the floor — a gutsy move that had Conservatives spitting bullets. She did the right thing and is now surrounded by like-minded people in her new party. Gurmant Grewal, on the other hand, was a tragicomic escap ade. He was on a fishing expedition, and on that basis Martin would have never accepted him.)

With Stronach’s defection and Cadman siding with the Liberals, the deciding vote fell to Liberal Speaker of the House Peter Milliken, who supported the government. The nation’s business could continue.

Another summer passed, more peaceful than the last, but as was clear when the House returned for the fall sitting, our hold on power was tenuous at best. Gomery’s report was the opposition’s last chance to use the issue for political advantage. On November 13, 2005, the politics of politics erupted again. That day, the unlikely trio of Layton, Harper, and Duceppe gathered to capitalize on “Liberal scandal” and present Martin with an ultimatum: call a January election or face another non-confidence motion, this time one sure to defeat the government. Martin ignored the warning, sticking to his pledge to call an election within thirty days of the release of the Gomery report. It didn’t matter.

The calculus for the opposition parties was simple: they all believed that they could improve on their last result, and that if they toppled the government together none of them would be singled out and punished for forcing another election. What was in the national interest never entered into the equation. This was about power, maximizing your own position, taking advantage of a wounded animal. It was pure opportunism.

The November 28, 2005, motion read: “The House condemns the government for its arrogance in refusing to compromise with the opposition parties over the timing of the next general election and for its ‘culture of entitlement,’ corruption, scandal and gross abuse of public funds for political purposes and, consequently, the government no longer has the confidence of the House.” We were defeated by a vote of 171 to 133, and an election was called for January 23, 2006.

The Conservatives won this round, but so did Paul Martin. The people of LaSalle-Émard elected him one more time, and he takes his job seriously. Martin is a democrat who will continue fighting to make Canada a more prosperous, just, and liberal society and to accentuate our decent and moderate values. If the Liberal Party of Canada wants to succeed next time around, it should consider the Martin record, thank him for his noble ambition, and reward the leadership candidate with the most thoughtful and forward-looking economic platform. More importantly, it should realize that Canada faces a critical choice: either be part of a globalized world while retaining a distinctly Canadian approach or shrink from that responsibility and opportunity. If Canada chooses to engage — whether dealing with global warming and environmental sustainability, the war against terrorism, or social justice and economic fairness — it must have a federal government that leads by example and by strength.