by Paul Wells
What’s been cut? What will be cut next? Harper has resisted all calls for a list of cuts. Each of Flaherty’s last three budgets has actually provided fewer details than its predecessor. Kevin Page, the first parliamentary budget officer, spent the last year of his five-year term in court trying to force federal departments to account for their cuts. He received only limited cooperation. But it is possible to produce a partial list. Since 2010, the Harper government has shut down the National Council of Welfare, the National Round Table on the Environment and the Economy, the First Nations Statistical Institute, the National Council of Visible Minorities, Rights and Democracy, and the Health Council of Canada. The end of the mandatory long-form census did not mean an end to cuts at Statistics Canada; in 2012 the agency cut thirty-four other programs, including the Survey of Income and Labour Dynamics, and the National Population Health Survey.
In theory, fiscal conservatives don’t like spending money they don’t have. But there is also pedagogical power in an empty purse. The string of budget deficits after 2009 actually gave Harper political cover to keep making cuts because it gave him a target to reach—the elimination of the deficit by 2015—which depended on constraining the growth of government. Over Harper’s lifetime, surpluses have been the best predictor of increased government spending; deficits, especially after 1988, a pretty good predictor of restraint. Every time Paul Martin finished the year with a surplus, he or Jean Chrétien or Chrétien’s man Eddie Goldenberg would come up with some way to spend it. Typically, it was a way that drove Harper and the other authors of the firewall letter crazy. Take away the surpluses and you take away the temptation.
If Harper did reach his goal of a balanced budget, give or take a few billion dollars, by 2015, he stood to turn the next election into a referendum on still more cuts to activist government. In the first week of the 2011 campaign he had promised two policies that were designed to kick in only once the budget was balanced. (At this writing they still haven’t.) Income splitting would allow a higher-earning taxpayer to transfer part of his salary to a spouse for tax purposes, reducing the couple’s combined tax bill. Applying the policy across all the couples who would take it up would cost $2.5 billion a year to Ottawa in foregone revenue. The second proposal, to double contribution limits to tax-free savings accounts (TFSA), would cost even more. Economist Kevin Milligan estimated a “revenue cost” of $6.6 billion a year once the TFSA increase was fully phased in.
An opposition leader running against Harper—Tom Mulcair, Justin Trudeau, whoever it might be—would find himself arguing against that $9.1 billion in highly visible, revenue-reducing new benefits, and in favour of whatever tax increases he would need to pay for his own proposals. The constant claim from just about every Conservative MP through the winter of 2013 that Mulcair wanted to impose a “job-killing $21-billion carbon tax” was only a hint of what would come in a general election campaign.
Harper has already won on a straight choice between his style of government and his opponents’ more ambitious plans in 2008 and 2011. (In 2006 the choice was more confused and less clear, because the Liberal corruption scandals meant voters faced a choice about much more than the role of government.) But it cannot be emphasized often enough that Harper’s goal is not merely to win; it’s to win on his own terms. He and his associates set those terms in the 2001 firewall letter: “to limit the extent to which an aggressive and hostile federal government can encroach upon legitimate provincial jurisdiction.” His goal is to hobble not just his own government, but any federal government of any party stripe that will come after it.
Harper had spent close to a decade starving the beast. He had sought at every turn to delegitimize the very notion of a larger, more activist government. He must have felt a moment of triumph reading Justin Trudeau’s comments in La Presse on April 11, 2013, mere days before the young Montreal MP became the new Liberal leader. “I don’t want to increase Canadians’ taxes,” Trudeau said. “Canada has lots of money at the federal level but I find we spend it poorly.” In fact the federal government had less revenue as a share of the economy than it had ever had at any point during Pierre Trudeau’s time in office. “It seems to me the middle class has suffered enough,” the younger Trudeau said. “So I’m not interested.”
Trudeau would not have phrased it this way, but he was talking the talk of Conservative hegemony. Harper had sought, by degrees and over nearly a decade, to change perceptions about the proper role of the federal government, and this tax-freezing, oil-export-supporting, Chinese-investment-boosting young matinee-idol scion of the family that once represented everything Harper wanted to fight was now singing Harper’s tune, even as he rose in the polls in a way that made even some Conservatives wonder whether Trudeau represented a real challenge to Conservative power.
Harper retained advantages that, in the first flush of Trudeaumania II, were easy to forget. Thirty new seats in 2015 (or whenever) would be created, disproportionately, in parts of the country where the Conservatives had won most recent elections. Harper would be the only party leader in 2015 who already had fought a national campaign. Campaigning is a complex skill; party leaders often need to get one botched campaign out of their system before running a winning one, as Harper had done in 2004. But all of that would come later. Meanwhile, in any fight, there’s “who wins” and then there’s “on what terms.” Harper, much more than any of his opponents, had set the terms.
But the longer Stephen Harper was prime minister, the further he drifted from his best habits and the deeper he sank into his worst. As 2013 progressed, even his own close associates were starting to worry about him.
“His focus, in terms of the legacy he’s trying to create, is very much on identifying what he sees as the long-term challenges and opportunities for the country,” one advisor said. “Yet his strong bias is towards arch-incrementalism. He backs away from ideas which he feels may be controversial. And that creates a lot of frustration.”
A former insider, now looking on from the private sector, said: “This government’s a lot older than its years in office would indicate. Every political office becomes less political over time. And this one is not an exception. There are a couple of people around with some campaign experience, but it’s a couple.” Brodie, who helped set the tone for the government’s first years, had helped run Harper’s leadership campaigns in 2002 and 2004, as well as the election campaigns of 2004 and 2006. Giorno got into Harper’s PMO by understanding, and publicly advocating, Harper’s political mission. Wright, who had taken over at the beginning of 2011 and was largely on the sidelines during the 2011 election, was a different kind of talent chosen for different reasons. Wright’s experience was in high finance, his personality gentle, his principal connections with Toronto’s business community, a world as foreign to Harper as Venus. Conservatives admired Wright because he had succeeded in the real world—at a young age, he became a managing director of Onex Corp., the huge and diversified private-equity investment firm whose chairman was Gerry Schwartz—and because he lived the sort of ascetic life Harper prized, rising early to run long distances, working late hours and weekends. Under Wright there weren’t a lot of personality clashes in the PMO. What some Conservatives were slower to notice was that Harper made fewer surprising moves while Wright ran the shop, fewer grand gestures. These were signs of the “less political office” some veterans of earlier Harper PMOs grumbled about. Brodie and Giorno were always preoccupied with the next campaign because they never knew when it would come. They ran tightly disciplined, highly partisan organizations. Wright’s shop was nicer, but it also seemed to be less decisive—and far, far more risk-averse. Indeed, by 2013, the government was sinking into unmistakable doldrums. The former insider characterized its style as “fence-sitting and micro-managing.”
After snubbing China and then embracing it, Harper had heard an earful from his own MPs, including in Alberta, about their constituents’ discomfort with the $15-billion takeover of the Canadian oil and
gas company Nexen Inc. by China’s state-owned CNOOC. He finally announced a policy that would make such takeovers less likely in the future, but the whole business plainly turned him off his earlier fascination with China. Ministerial visits to the middle kingdom slowed to a trickle. The country vanished from his speeches.
Negotiations toward an ambitious trade deal with Europe dragged on interminably. In February 2013, Karel de Gucht, the former Belgian foreign minister who served as the European trade commissioner, landed in Ottawa to wrap up negotiations with Canada’s trade minister Ed Fast. But de Gucht quickly realized Fast had no serious mandate to negotiate. He returned to Brussels in a huff, telling his associates there was no point discussing serious matters with anyone but Harper. And Harper wasn’t talking.
Barack Obama was taking longer to make a decision on Keystone than anyone could have imagined, and Harper seemed to have no lever to influence his U.S. counterpart. Northern Gateway was going nowhere. On any file you could care to name, Harper had no provincial ally, no foreign leader with whom he was identified, no great project on the go. In politics, it is always best to keep moving. Harper had stayed one step ahead of his opponents when he won control of the Canadian Alliance, merged it with the Progressive Conservatives, reached out to Atlantic and Ontario Tories and Quebec nationalists. He had found unlikely allies such as David Emerson, taken astonishing gambles like the Québécois nation resolution. Now he seemed stalled, and trouble was not long coming. And as had happened just about every time before, the most serious threats to his hold on power came not from outside the Conservative tent, but from within.
At the end of 2012 another Conservative backbencher, Mark Warawa from Langley, B.C., had tabled another motion that seemed to be a clever way to pick at the abortion issue. Warawa’s motion would have the House of Commons “condemn discrimination against females occurring through sex-selective pregnancy termination.” Warawa had a snappy term for such sex-selective abortions, “gendercide.” By March 2013, he was tired of seeing his motion blocked in his attempts to bring it to a vote, and he wanted to speak in the Commons about it.
Fifteen minutes a day were set aside before Question Period for members to talk about what they wanted—well, theoretically. In fact each party’s whip had a list of approved statement-makers, and among the Conservatives, each designated speaker also had a scripted statement to make. Warawa was kept off the list. Harper wanted none of his MPs saying anything about abortion in the Commons. Warawa was having none of it, and rose after Question Period to complain that his privileges as an MP had been infringed by his own party. More than half a dozen Conservatives rose, in the days that followed, to agree with him. Some were ardent pro-lifers like Warawa, but others simply wanted to be able to speak for themselves. It was a crack in iron Conservative caucus discipline. Harper’s advisors were badly divided over how to handle it. If they increased backbenchers’ freedom, it might embolden them to press further demands. If they cracked down, it might create martyrs. Either way, it was a public sign of fraying solidarity.
That kind of chink in the armour was manageable if nothing else went wrong. But that’s not what happened. On November 21, 2012, a Senate committee had ordered an internal investigation into Senator Patrick Brazeau’s housing allowance. In theory, Brazeau represented a community in Maniwaki, Quebec, but he had hardly ever been seen at his listed residence there. Meanwhile, he was billing the Senate for a housing allowance for his Ottawa residence, which seemed to be the only one he ever actually used.
Two weeks after the inquiry into Brazeau’s issue began, the Ottawa Citizen reported that Mike Duffy was billing $33,413 in living expenses for his Ottawa home. It was a remarkably similar situation. Duffy was supposed to represent Prince Edward Island. He was not often spotted there. To inquiries from the Citizen’s reporter, Glen McGregor, Duffy replied with an e-mail: “I have done nothing wrong, and am frankly tired of your B.S.”
Similar questions soon arose over the residency claims of two other senators, Mac Harb and Pam Wallin. Harb, at least, was a Liberal. Brazeau, Duffy and Wallin had all been among the first batch of Senate appointments Harper made in the wake of the 2008 coalition crisis. For two years after his appointment, Duffy had been a fundraising star for the party, travelling across the country and appearing in personalized videos sent to big fundraisers to encourage them to keep digging into their pockets.
At one point Duffy tried to get express approval for his PEI provincial health card. The province’s Liberal government promptly leaked his efforts to reporters. Finally, on February 22, Duffy walked into the CBC studio in Charlottetown and announced that he would pay back the housing money he had claimed. Not because he actually needed to, you know. “The Senate rules on housing allowances aren’t clear, and the forms are confusing,” he said in a statement. “I filled out the Senate forms in good faith and believed I was in compliance with the rules. Now it turns out I may have been mistaken.”
At the end of March, Duffy repaid the Senate more than $90,000 and at the end of April the Senate publicly acknowledged as much, and by mid-May the Conservatives were holding Duffy up—no mean feat—as the sort of fellow more senators should emulate. “He showed the kind of leadership we would like to see from Liberal senator Mac Harb,” Peter Van Loan told the Commons.
And there it all might have ended if Duffy hadn’t started e-mailing around town to brag about his exploits. On May 14 Bob Fife, CTV’s Ottawa bureau chief, led the national news with an astonishing revelation: Nigel Wright had worked out a deal with Duffy to help him repay the money. Duffy had a long-standing habit of sending out late-night e-mails to lists of people who might, he thought, be interested in his latest business. When he was a journalist it was charming, or harmless. Now that he was a senator, it was reckless. Duffy had hinted at the deal in a February 20 e-mail to somebody, or several somebodies, one of whom forwarded it to Bob Fife. This was two days before Duffy walked into the Charlottetown CBC studio. In this e-mail, Duffy described “a scenario” he had reached with Wright. The next morning, as reporters started pressing the PMO for more detail, Fife went back on the air to reveal that the scenario was pretty simple: Wright had written Duffy a personal cheque for the more than $90,000 Duffy owed.
What followed was a kind of slow-motion grotesque. Faced with the news that Wright, a manicured Bay Street swell with millions of dollars to his name, had reached into his capacious back pocket to bail out a double-dipping TV celebrity turned senator, the PMO’s first response was to claim that this was all model behaviour. “The Government believes that taxpayers should not be on the hook for improper expense claims made by Senators,” a PMO statement said. “Mr. Duffy agreed to repay the expenses because it was the right thing to do. However, Mr. Duffy was unable to make a timely repayment. Mr. Wright therefore wrote a cheque from his personal account for the full amount owing so that Mr. Duffy could repay the outstanding amount.” Because who wouldn’t be a mensch at a time like that?
“Mr. Duffy has reimbursed taxpayers for his impugned claims,” the statement concluded, with breathtaking cheek. “Mr. Harb and Mr. Brazeau should pay taxpayers back immediately.” In effect, the office of the prime minister of Canada was chiding Harb and Brazeau for failing to secure sugar daddies as generous as Wright. In a long career of reading bullshit from politicians, I have never seen anything quite as arrogantly contemptuous of its intended audience, the Canadian people.
It took four more days for Wright to hand in his resignation. In the days that followed, various Conservative cabinet ministers and MPs would say in Harper’s defence that he had accepted Wright’s resignation immediately. But Wright had not tendered his resignation immediately, and Harper had attempted days of amateurish stonewalling before Wright finally did give up his job.
As the last days of the wretched spring 2013 session of Parliament limped toward the summer break, what was most striking about the Duffy business was that it was so familiar. It was like a Hollywood sequel to the business with Al
an Riddell in 2006 and Bev Oda in 2012, and as with most Hollywood sequels it mostly featured the same people in the same situations saying the same things. There was the long denial that anything untoward had happened. There was the preliminary attempt, once the mess became public, to deny it was a mess. And above all, there was the instinct to chase the problem away with money. The only wrinkle with Wright and Duffy was that it was Wright’s own money, not (as far as could immediately be ascertained by reporters facing the customary PMO stonewall) the taxpayers’ or the Conservative Party’s. Some observers were amazed that Wright would toss off a cheque to make a problem as risible as Mike Duffy go away. But surely Wright was only a keen student of the Harper manner. Harper’s goal, since long before Nigel Wright came on the scene, was political survival. Any serious obstacle to that survival had to be eliminated as a matter of the highest priority. Duffy needed money, Wright had money, and as soon as Wright’s money was applied to Duffy, the problem would—or so it seemed possible, at first, to hope—disappear. Wright’s cheque was an ultimate expression of loyalty, not to Duffy, of course, but to Stephen Harper. Loyalty was all Harper had ever asked. All he had ever demanded.
But no man can forever demand loyalty if he cannot repay it in some decent coin, whether it be in companionship, gold or another treasure. Harper had given Canadian conservatives so much: unity after years of division, then a taste of power, then great accomplishment. He had given them something many had never believed they would see: a prime minister who thought and talked like them, and who won because of that, not despite it.
