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2. The Chrétien Years 1993-2003
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Contents |
The 1993 Campaign
On October 25, 1993, Jean Chrétien led the Liberal Party to a majority victory in the 35th general election, crushing the Progressive Conservatives, led by prime minister Kim Campbell. Armed with a Liberal Red Book of promises and ideas, he fought the election on a pledge to replace Brian Muroney's hated Goods and Services Tax (GST) with "a system that generates equivalent revenues, is fairer to consumers and to small business, minimizes disruption to small business, and promotes federal-provincial fiscal cooperation and harmonization." He also promised to reform unemployment insurance and renegotiate the North America Free Trade Agreement. (NAFTA).
The PC Party had lost ground in the polls due primarily to GST unrest, but the retirement of Brian Mulroney and his replacement by Kim Campbell gave the PC's a "leadership bounce" that stopped their slide in popularity. But Campbell failed to exploit he advantage, and often disappeared during the campaign. Attacking the Liberal Red Book, she famously quipped that "an election campaign is no place to discuss the issues." In addition, her campaign featured some negative advertisin which seemed to mock Chrétien's facial paralysis. Campbell did not approve the ads, but suffered from a severe backlash, especially when she failed to apologize.
The election changed the political landscape entirely. Chrétien and the Liberals won 177 seats — the third-best performance in the their history, and the most since their record of 190 seats in the 1949 federal election. But they failed to crack Québec - Chrétien was one of only four Liberal MPs outside the Montreal area.
The PC Party, in power for nine years, was reduced to a mere two seats -- less than the number required to be considered an official party.
The Mulroney coalition was split in two, and ex-Mulroney cabinet minister Lucien Bouchard's Bloc Québécois became the official opposition. The upstart right-wing western protest Reform Party, led by Preston Manning, entered Parliament as the third party. Audrey McLaughlin's New Democrats along with Campbell's PCs both had their worst results ever, with 9 and 2 seats, respectively.
Chrétien quickly backed off his promise to reform the GST, since it was proving to be a very effective revenue generator for the government. Besides, the GST simply replaced an older Manufacturers Sales Tax, that was invisible, and put Canadian firms at a disadvantage.
The GST also allowed business to both pay and collect the tax, which meant they had less incentives to avoid paying tax. The result was that in a few years, Canada had eliminated the federal deficit, becoming the only G7 country to have a budget surplus. For the rest of Jean Chrétien's career as Prime Minister, he was blessed with a lack of money worries.
Chrétien's Austerity Agenda
Jean Chrétien and his cabinet were sworn in on November 4, 1993, by Governor General Ray Hnatyshyn. The new Prime Minister had served in every Liberal cabinet since 1965, and had a strong command of the parliamentary system and how government worked. He quickly build a strong centralized regime that, while highly efficient, was also criticized as a "friendly dictatorship".
Chrétien had a stronger electoral mandate than any Liberal prime minister since Louis St. Laurent. With 123 more seats than the nearest opposition party, and blessed with burgeoning GST revenue, he turned most of his attention to clearing away the national debt built up since the Trudeau and Mulroney years.
Canada was in trouble, with one of the highest annual deficits of the G7 countries. Federal spending was $36 billion in 1975. When Chrétien came to power it had ballooned to almost $160 billion. In 1975, our national debt was equivalent to just 15% of GDP (Gross Domestic Product), down from 21% in 1970. Ottawa’s annual shortfall was now nearly 25% of total federal expenditures, and it had to be made up by borrowing. Interest payments alone ate up 35% of federal spending.
By 1995, Canada's debt-to-GDP ratio had reached almost 70% . A quarter of Canada’s debt was held abroad. Of the total of $500-billion owed to foreign creditors by all national governments in the world, one-quarter of the sum was owed by Ottawa. Foreign investors were starting to wonder if Canada could sustain this burden much longer.
The axe fell a few weeks before Finance Minister Paul Martin delivered his 1995 austerity budget, when Moody Investors Services threatened a downgrade of Canada's foreign-held debt. This forced Chrétien and Martin to begin a program of deep cuts to provincial transfer payments and other areas of finance. Over the next five years, with the help of GST revenues, they were able to slash the $42 billion annual deficit to zero, and pay down $36 billion of the national debt, while cutting taxes by $100 billion (cumulatively).
Martin and the Finance department also entered a series of meetings between the finance ministers of all provinces to discuss how to address the near bankruptcy of the Canada Pension Plan (CPP). They agreed to start public consultation process in February 1996. The results were analyzed by Finance, and a bill sent to Parliament overhauling the CPP, and putting it on a more solid footing, thereby solving what could have been a serious pension crisis if left unaddressed.
Chrétien Faces A Second Referendum
Less than a year after Chrétien came to office, the Parti Québecois won a narrow victory in the Quebec provincial election of on September 12, 1994. Leader Jacques Parizeau immediately promised to hold a second referendum on Quebec secession.
Federalists in Québec attacked Parizeau's referendum question as vague and confusing to all but the most sophisticated voters: "Do you agree that Quebec should become sovereign after having made a formal offer to Canada for a new economic and political partnership within the scope of the bill respecting the future of Quebec and of the agreement signed on June 12, 1995?"
In a post mortem that evening, Premier Parizeau made some ill-advised remarks about the votes of non-francophones and "la vote ethnique" making the sovereignty referendum fail. The province was outraged by his comments, and he was soon replaced as Premier by Lucien Bouchard, who resigned his Commons seat and leadership of the Bloc.
Jean Chrétien, shaken by a near loss in the referendum, moved to take action to shore up the federation. On December 11, 1995, he got the House of Commons to pass a resolution recognizing that Quebec was a distinct society within Canada. On February 2, 1996 Parliament passed a more solid act: Bill C-110 - An Act Respecting Constitutional Amendments, which effectively gave Québec, Ontario, and the Western and Atlantic regions a veto over constitutional amendments that provinces could not otherwise opt-out of or veto directly.
On the domestic front, one night in November, 1995, an intruder wielding a knife broke into the Prime Minister's official residence at 24 Sussex Drive. Chrétien was saved from harm by the quick thinking of his wife Aline Chrétien, who locked the bedroom door and held off the intruder with a large piece of Inuit sculpture until the RCMP arrived.
Aboriginal Progress
Jean Chrétien had a long involvement with Canada's first nations. In 1968, Pierre Trudeau appointed him Minister of Indian Affairs and Northern Development. Chrétien's 1969 White Paper on Indian Policy, a proposal to abolish the Indian Act, was a response to requests for self government by many aboriginal groups. But most preferred the status quo, and the proposal was put on the back burner.
Chrétien did however back the Inuit of Northern Québec in their desire for for self-government, and was rewarded when the Québec Cree and Inuit held their own referenda in 1995, and rejected separation from Canada.
Chrétien urged the Ministry of National Defence to restore aboriginal burial land in Ontario's Ipperwash Park that the military had taken and used during World War II. On September 4, 1995, Kettle and Stony Point Protestors occupied the park, and two days later, native protester Dudley George was killed by an Ontario police constable.
Chrétien also backed the call by BC's Nisga'a people for self government. On February 15, 1996, the Nisga'a Treaty was approved by Nisga'a Tribal Council. It called for a grant of $190 million and communal ownership of, and self-government over, 1,930 sq km of land in the Nass River valley in northwestern BC. The Nisga'a Treaty was signed in 1998.
The Chrétien government was also a backer of National Aboriginal Day, first celebrated on June 21, 1996. Two years later, in January, 1998, the federal government issued a formal apology to native peoples for past injustices like the residential school system.
- Resource: National Aboriginal Day First Celebrated
The Nisga'a Treaty was also paralled by seven years of negotiations with Canada's Inuit people in the North West Territories, with culminated in the April 1, 1999 creation of Nunavut.
On April 1, 1999, the Governor General proclaimed the creation of the Nunavut Territory. The name comes from an Inuktitut word which means 'our land'.
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Nunavut contains the former Keewatin District and Franklin District of the Northwest Territories, including Baffin Island and stretches almost to the North Pole. At 1,235,200 sq km, it comprises one-fifth of Canada's land mass. Its borders reach from the Northwest Territories to the west, Manitoba and Saskatchewan to the south, and Baffin Bay and the Labrador Sea to the east.
In 1992, a referendum was passed authorizing the separation of the eastern half of the NWT to create a new autonomous territory; under the agreement signed in 1992 by the Canadian government, the Inuit would receive title to 216,000 sq km of the new territory.
The 16,000 Inuit residents of Nunavut comprise 85 percent of the population, making the new territory, in effect, an Inuit homeland.
To begin operations, the territory is put under the political control of the Tungavik Federation of Nunavut, and Paul Okalik is appointed first Premier of Nunavut.
Natural Disasters
The 1996 Saguenay Food
Over eight feet of water ran through parts of Chicoutimi, Québec and La Baie, Québec. An entire neighbourhood in Chicoutimi was levelled. Police and troops evacuated over 16,000 people. The flooding killed ten people, destroyed 22,488 houses and left 10,000 homeless, doing over $1.5 billion in damage.
La Petite Maison Blanche, a small white house that stood unharmed while torrents of water flowed around it became the symbol of the flood. It was preserved, and is now a trourist centre.
An inquiry later reported the region's system of dams was poorly maintained.
The flooding had unexpected benefits, covering the heavily contaminated sediments at the bottom of the Saguenay and Ha! Ha! rivers with several feet of clean new sediments.
The 1997 Red River Flood
The Cree called the flood Miscousipi - Red Water River - and warned early settlers of the dangers. In 1826, the 10-year-old Red River colony had to evacuated. In 1950, the flood reached a crest of 30 ft (9.2 m) at Winnipeg, causing 100,000 people to be evacuated and almost $400 million in damages. Since completion of Duff's Ditch, permanent town dikes and other measures, Manitoba has had huge floods in 1979 and 1997.
For Manitobans, it was the worst flooding since 1826. The province of Manitoba called in the Canadian Forces, the RCMP and the provincial Department of Natural Resources to lead the fight.
Many people threatened by the waters chose to evacuate when it was clear this was going to be a monster flood. Residents from Morris had only two days notice to evacuate to Winnipeg. Thousands of volunteers worked to build sandbag dikes around homes and property. But much of the work was useless, as the "Flood of the Century" hit Manitoba hard.
Duff's Ditch worked as advertised, and almost all of the ring dikes around the towns held, except for St. Agathe, where the water rose so high it came in from the west. The province had to quickly build a massive 42 km long emergency dike, Brunkild Z, at a cost of $10 million, when engineers realized that Winnipeg was menaced by possible overland flooding from the same direction.
On May 4, 1997, the Red River crested at 7.5 m (21.6 ft), and occupied an area of 1,840 km², with more than 2,560 km² of land underwater, which earned it the nickname "The Red Sea". In all, 28,000 Manitobans had to be evacuated.
Flooding resulted in over $500 million in damages, and Ottawa and the provices had to come up with massive amounts of aid. On May 2, 1997, a special CBC Radio Morningside concert raised over $450,000 for victims. Performers included Murray McLauchlan, singing his ballad Red River Valley, and Valdy, who composed a new song, As the Waters Fall, for the occasion.
The 1998 Ice Storm
The storm coated parts of the provinces with 7-11 cm (3-4 in) of ice. Most freezing rain lasts only for a few hours, but the ice storm of 1998 saw more than 80 hours of freezing rain, ice pellets and light snow.
The heavy layers of ice built up, weighing down and snapping trees and power lines. Utility poles and transmission towers came crashing down. Massive power outages followed, for as long as a month in the "dark triangle" of Quebec east of the Richelieu River.
Montreal nearly blacked out, with only one major transmission line from the north [green in the map] left to keep the city secure.
The Great Canadian Ice Storm of 1998 was the most expensive natural disaster in Canada, with damage estimated at almost $5.5 billion. By June 1998, about 600,000 insurance claims totalling more than $1 billion were filed.
According to Environment Canada, the storm directly affected more people than any other previous weather event in Canadian history.
- Over 3 million people in Quebec and 1.5 million in Eastern Ontario lost power.
- At the height of the storm, 57 communities in Ontario and 200 in Quebec were declared disaster areas.
- About 600,000 people had to leave their homes, and 100,000 people moved into shelters.
- 28 people died, many from hypothermia, and 945 people were injured.
- Prolonged freezing rain brought down millions of trees, 120,000 km of power lines and telephone cables, 130 major transmission towers each worth $100,000 and about 30,000 wooden utility poles costing $3000 each.
- Many maple sugar bushes in Quebec and eastern Ontario were destroyed. It was estimated that it would take 30 to 40 years before syrup production could return to normal.
- Nearly a quarter of Canada's dairy farmers were hit hard. Cows could not be milked, processing plants were shut, and about 10 million litres of milk had to be dumped.
Linemen and tree cutters rushed in from the northern US, Manitoba and the Maritimes and even the Prairies and BC.
On Thursday, January 8, 1998, 14,000 troops (including 2,300 reservists) were deployed to help clear debris, provide medical assistance, evacuate residents, and go door-to-door to make sure people were safe.
Power was restored in most urban areas in a matter of days, but even three weeks later, there were still 700,000 people without electricity.
Chrétien's Electoral Reform
A main focus of the Chrétien ministries was electoral reform, and in 1996, Parliament passed amendments to the Canada Elections Act to create a permanent register of Canadians qualified as electors, and eliminate door-to-door enumeration for federal elections, referendums and by-elections.
The reforms shortened the general election and by-election period to a maximum of 36 days, and the hours of voting on polling day were staggered and extended. This meant that most results would be available at about the same time across Canada, and a strong trend in the east, for example, would not influence the choice of voters in BC, whose polling stations forlerly closed four hours later.
In the year 2000, Parliament passed a new Canada Elections Act, which modernized the organization and language of the electoral legislation, and introduced new controls on election advertising by third parties.
Third parties are persons and groups that play a role in the election process, but who are not candidates for office, registered political parties or their riding associations.
The new Act prohibited election advertising and the publication of new election opinion poll results on election day. It also authorized the Commissioner of Canada Elections to deal with violations of the Act by obtaining court injunctions and, where the violation is an offence, through compliance agreements. In addition, the Act permitted the Chief Electoral Officer to develop and test electronic voting procedures. Elections Canada also changed its rules so that the first homeless people (with no fixed address) were able to vote in federal election.
Two years later, the Supreme Court of Canada ruled that the section of the Canada Elections Act that prevented inmates serving sentences of more than two years from voting in federal elections was against the Canadian Charter of Rights and Freedoms. All inmates were now permitted to vote in federal elections, by-elections and referendums.
The Chrétien government also attempted to get the provincial premiers onside, to shore up federalism after the close Quebec vote. On September 14, 1997, the Premiers and territorial leaders, except Québec, unanimously agreed on a framework for open public consultations with Canadians on strengthening the Canadian federation.
At the same time Chrétien went on the attack against what they saw was a referendum abuse by the Quebec government. On March 15, 2000, the Commons passed The Clarity Act, which outlined conditions for another Quebec separation referendum.
The Act, quarterbacked by Intergovernmental Affairs Minister Stéphan Dion, said that no Canadian government would acknowledge a Quebec declaration of independence unless a "clear majority" supported sovereignty in a referendum based on a "clear question", as defined by the Parliament of Canada. The size of a "clear majority" was left unspecified, but the Supreme Court of Canada later made it clear that such a majority would not be "50% plus one vote".
Chrétien's Second and Third Mandates
Chrétien's government kept up its reforming bent, bringing in a new and far-reaching Youth Criminal Justice Act, which changed the way youths were prosecuted for crimes in Canada, and replaced the old Young Offenders Act.
In 1999 his government negotiated the Social Union Framework Agreement with the provinces. This Agreement backed common standards for social programs across Canada.[1]
In foreign affairs, Chrétien led a total of four "Team Canada" trade missions to People's Republic of China, which helped boost the volume of trade between the two countries. He also loosened immigration policy to make it more favourable towards Chinese immigrants.
In November 1997, Chrétien's reputation suffered when the Asia-Pacific Economic Cooperation (APEC) summit was held on the University of British Columbia campus in Vancouver. UBC students and others protested the human rights practices of some of the leaders, especially Indonesian President Suharto. The demonstrators tore down a barrier and were pepper sprayed by the RCMP. Chrétien's answer to media questioning was glib: "For me, pepper, I put it on my plate." Allegations soon arose that someone in the Prime Minister's Office or Chrétien himself gave the go-ahead for the pepper spraying of protestors.[2]
In the 37th general election, held on November 27, 2000, Chrétien's Liberals again won a majority, this time defeating Stockwell Day and the Canadian Alliance and winning back most of the seats lost in 1997 and nearly tying their 1993 total. Joe Clark, returning as PC leader, was able to keep the party as an official party in the House of Commons by winning the necessary 12 seats.
Conservative leader Jean Charest had resigned to contest the Quebec Liberal Party leadership, and his electoral victory in 2003 was seen by the rest of the provinces as a vote of confidence in Chrétien's unity efforts.
Canada Fights Terror in Afghanistan
Under Jean Chrétien's leadership, Canada was not playing as large a role in United Nations peacekeeping as it once had, but was eventually lauded by some for not participating in the 2003 invasion of Iraq, which occurred just before Chrétien's retirement.
Canada's did however respond to the September 11, 2001 Al Qaeda terror attacks on the United States. At least 23 Canadians were killed in the World Trade Center attack, and 2 on the hijacked aircraft. North American airspace was shut down during the attacks, and planes diverted to the Atlantic Provinces. Many Canadians opened up their homes to stranded travellers. Chrétien praised Operation Yellow Ribbon, saying that it was one of the ways it showed the best of Canadians in a time of tragedy for their American friends and neighbours down south.
Resource: List of Canadian World Trade Center Victims, September 11, 2001
Chretien ordered Canadian forces to join with the NATO-backed multinational mission that invaded Afghanistan to pursue al-Qaeda forces there. Canadian fighter pilots and ground troops were involved in the initial attack on the Taliban regime on October 7, 2001. A "friendly fire" tragedy occurred on April 17, 2002, when four Canadian infantrymen were killed, and eight injured by two U.S. F-16s dropping a 230-kilogram bomb.
Chrétien however refused to commit Canada to supporting the US-led 2003 invasion of Iraq, arguing that the war lacked UN Security Council sanctions. In December of 2003, DND had prepared plans for Canada to send as many as 800 Canadian troops to Iraq if the UN Security Council had authorized it; but a UN request for more Canadian troops for Afghanistan removed this option. Canada did provide financial aid to the post-war reconstruction effort in Iraq, which allowed Canadian companies to bid on reconstruction contracts.
Resource: Paul Martin Welcomes George W. Bush to Pier 21, Halifax, December 1, 2004
Sponsorship and Scandal
Chrétien's final term of office was marked by two major brushes with scandal. In 2000, he was forced to admit that he had lobbied the Business Development Bank of Canada to grant a $2 million loan to Yvon Duhaime, a friend and constituent to whom the Prime Minister had sold his interest in the Auberge Grand'Mère.
The BDBC had turned down Duhaime's application, but later approved a $615,000 loan after heavy lobbying by Chrétien. Controversy arose when the press discovered that Chrétien had never been paid for his share in the sale of the adjoining golf course, when the RCMP laid criminal charges against Duhaime. The Prime Minister's ethics counsellor determined that he had not violated any conflict-of-interest rules, but noted that there were no clear guidelines on such matters.
The other huge controversy of the Chrétien years was the so-called sponsorship scandal, where millions of dollars of sponsorship grants promoting Canada in Québec were mismanaged, and some funds diverted fraudulently.
The Gomery Commission's First Phase Report cast most of the blame for misspent public funds and fraud on Chrétien and his staff, and cabinet minister Alfonso Gagliano.
The scandal had serious repercussions on Liberal Party's reputation. Paul Martin resigned and spent a year or two openly campaigning for Chrétien's job. At a leadership review in January 2003, less than half Chrétien's caucus committed to support him, and he resigned on December 12, 2003, formally handing power over to Paul Martin.
Chrétien joined Ottawa offices of Heenan Blaikie on January 5, 2004, as counsel. In 2005, he testified before the Gomery Commission regarding the sponsorship scandal.[3] He called the management of the sponsorship program "catastrophically bad", and referred to lead manager Chuck Guité, as a "charming scamp".
In 2007, Chrétien published his prime ministerial memoirs, entitled "A Passion for Politics."
Notes
- ↑ Government of Canada, Social Union, News Release, "A Framework to Improve the Social Union for Canadians: An Agreement between the Government of Canada and the Governments of the Provinces and Territories, February 4, 1999
- ↑ APEC Protest Controversy
- ↑ Chrétien lawyers go to court to have Gomery removed CBC News March 3, 2005
| 2. The Chrétien Years 1993-2003 - Gallery | Stories & Texts | Web Links | Milestones | Student Activities | Student Projects |
| D. Global Challenges - 1984-Present →→ 1. The Mulroney Mandate 1984-93 → 2. The Chrétien Years 1993-2003 → 3. Canada in the New Millennium →→ E. Aboriginal People and First Nations Today |
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