Canada’s Governor-General has just agreed to prorogue (i.e., suspend) Parliament until January 26, 2009. This will provide some breathing room before a non-confidence vote that might bring down the Tories and replace them with a coalition government comprised of the Liberals, NDP and the Bloc Québécois. As soon as Parliament is re-convened, the Conservatives are planning to introduce a new federal budget.

A pause will give all parties an opportunity to reflect on the ramifications of what has transpired in recent days. I have four follow-up points to make about why a coalition government in Canada may be unpalatable at this particular point in time, when a recession of uncertain intensity looms. This is a sequel to my December 1st blog entry.

1) The coalition agreement reached by the opposition parties smacks of mischief making. Specifically, there have been reports that Jean Chrétien (former Liberal Prime Minister) and Ed Broadbent (former leader of the NDP) engaged in backroom maneuvering to make this happen. This may be only speculation, but if it is true, one is tempted to ponder on how such a set of circumstances might have come about.

What would I do if I was an old warhorse in Ottawa who was still more savvy than the young whipper-snappers who had taken my place? If presented with the opportunity, and knowing my history (i.e., the Joe Clark era), I’d jump at the chance to show that I’ve still got what it takes. Why? Partly for the sport of it and partly because I could. Would it be good for the country? Probably not. And that is why Mr. Dion and Mr. Layton should not have listened to their former mentors − if that, in fact, is what transpired. All concerned are probably wondering what they have gotten themselves into.

2) Western alienation. The Conservatives currently have 71 members of Parliament from the four western provinces. The grouping of Liberal, NDP and Bloc members from the West totals only 21. Clearly the aspirations of the West would be blighted once again under a coalition government. The four western provinces have accounted for most of the economic growth in the nation over the past several years. The lowest unemployment rates in the country are still on the Pacific side of the Ontario-Manitoba divide.

Whatever else it may have done, the minority Conservative government has at least given the appearance of the west having a stronger voice in Canada. The West, after all, through its resource royalties is now financing a disproportionately large share of national government spending. It is only reasonable that whoever is loosening the purse strings most should want a bigger say in decision making. Ontario has recently joined Québec as a “have not” province when it comes to transfer payments.

3) The argument that immediate action is needed to address the economic situation and that the Tories are failing in this regard does not hold up according to any time line. To replace the current government will require a “swearing in” period of several weeks. Plus there will be a learning curve with respect to freshmen Ministers adjusting to their new jobs and becoming acquainted with their top bureaucrats. This will be particularly true for the two parties – the NDP and the Bloc – that have never governed before. All of this will take time, extending well into the spring, if not further. Flawed though they may be, the Ministers of the Tory Cabinet are used to governing and this will be important as increasingly tough times unfold.

4) Québec separatist icon, Jacques Parizeau, likes the idea. That should give anyone who puts Canada first pause to reflect. Mr. Parizeau says that the proposed coalition government validates Quebeckers’ support of the Bloc Québécois. How can Liberal and NDP Members of Parliament think that Mr. Parizeau’s endorsement will sit well with their supporters? They need to go back to their constituents and get a better read on who they should be breaking bread with at the table.

Having said all of the foregoing, it also needs to be stated that the world will not come to an end if Canada sees a coalition government come to power early in the new year. External factors will continue to play the major role in how the economy unfolds. And who knows, maybe the new players can come up with some novel ideas. The pause until Parliament next meets will give all Canadians the opportunity to get used to the idea that change may be coming, rather than having it spring up out of nowhere.

And here’s a final comment. In these times of wide-ranging uncertainty, there is one thing that has crossed over into being “for sure.” What had been a very mundane scene in Ottawa − as was even exemplified by the noisy but seemingly insubstantial leadership debates in the recent federal election − has now become a whole lot more interesting.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.

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12/09/2008 - posted by marcus

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