This is why Mike Duffy was named to the Canadian senate
Which leads us back to this: Be it resolved, there is now a single homogeneous Canadian political culture, expressed via the three main party shadings. How long until platforms themselves become irrelevant? Partisans will argue their own beloved expression of Canadian liberal democracy is not only best, but distinct – as the Tories, Grits and NDP were a generation or two ago, when they disagreed about country-changing issues such as North American free trade, in 1988, or membership in NATO, in 1968.
But tick through the list of assumptions at the heart of the state today – from socialized health care to capital punishment, abortion or free trade, deficits or tax rates – and you find unanimity. The Conservatives must be for gay rights, or be written off as reactionary by the majority. The New Democrats must be for industry and thrift, or be written off as loopy dreamers by that same majority.
This convergence can create a mash-up, as political parties struggle to create differentiation amid their essential drab sameness. Thus, John Baird’s defence of gay rights in Russia doesn’t go far enough, says the NDP’s Paul Dewar. He must crank it up to 11, like the guitar amplifier in Rob Reiner’s Spinal Tap. The Liberals, meantime, are beginning a two-year effort to implant the idea, by every means other than saying it, that they can be more conservative than the Conservatives when it comes to economics, and more new and democratic than the New Democrats when it comes to sex, drugs and rock ‘n’ roll. “Tough on crime” is still exclusive Conservative territory – but only because it’s one of the few old planks they haven’t ditched in the hunt for centrist votes. And, to be frank, it’s not popular enough for the other parties to bother to steal.
Taken together, this still-unfolding spectrum collapse sets up a contest of almost pure personality in 2015. Through the next 24 months, Harper will seek to recast himself as more constructive; Mulcair, happier; and Trudeau, more solid. The ad war will be personal as never before, culminating in televised debates understood by all to be winner-take-all. And the pollsters, perhaps as never before, will be flying blind. Interesting times.
Even among Ottawa insiders, few would be aware that two officials running a tiny agency Flaherty set up to try to create a national securities regulator beat them all. Douglas Hyndman, chairman and chief executive officer of the Canadian Securities Transition Office (CSTO), makes $534,043, and Lawrence Ritchie, the CSTO’s executive vice-president and senior policy adviser, $537,469. Their salaries are public because Hyndman is on long-term loan to the feds from the British Columbia Securities Commission, while Ritchie is similarly seconded from the Ontario Securities Commission, and both B.C. and Ontario publish “sunshine lists” of salaries over $100,000. They are still technically on the provincial payrolls—even though they’ve been working for Flaherty since 2009—with Ottawa compensating their home provinces. (The Harper government’s refusal to support Alberta MP Brent Rathgeber’s private member’s bill to publicly disclose federal salaries over $188,000 led to Rathgeber quitting the Tory caucus last spring; the government wanted to reveal only a handful of salaries over $444,661.)
At a glance, their pay seems out of whack by federal standards. After all, Hyndman and Ritchie together oversee only about 20 employees. Poloz, by comparison, commands about 1,240 at the central bank. But Flaherty has staked more on his high-priced ringers than the size of their shop might indicate. In an email exchange with Maclean’s, Hyndman said his “relatively small staff” belies the complexity and importance of what the CSTO is trying to accomplish. “We are using the expertise of a core group drawn from provincial securities regulators, plus some additional staff, to develop critical improvements to Canada’s system of capital markets regulation,” he said. “We also need to maintain the flexibility to move forward on either federal legislation or a co-operative scheme with the provinces.”
That last part about being ready to pursue either of two very different policy options is key. Flaherty set up the CSTO back in 2009 to bring about his goal of establishing a common Canadian securities regulator, replacing a hodge-podge of provincial stock market commissions. But some provinces challenged his plan in court. In late 2011, the Supreme Court of Canada ruled that Ottawa was overstepping its jurisdiction. Despite that severe setback, Flaherty kept trying to coax provinces to come onside voluntarily—that’s the “co-operative scheme” Hyndman mentions. But if those overtures to the provinces fail, the court ruling left the federal government room to regulate in limited areas on its own—that’s Hyndman’s “move forward with federal legislation” option.
In fact, indications from federal officials suggest they are not optimistic that enough provinces will sign on to salvage Flaherty’s original grand plan. For instance, Hyndman said the CSTO’s “primary focus right now is developing proposed legislation and implementation plans that will be needed if no agreement is reached with provinces on a common regulator.” But exactly what parts of the financial marketplace the federal government will set out to regulate on its own has not yet been announced. It’s the subject of considerable speculation among private-sector experts. Flaherty’s office says the aim would be “preventing and responding to systemic risks, such as those posed by over-the-counter derivatives.”
Figuring out ways to regulate trading by sophisticated investors in derivatives, which go by exotic names such as “currency forwards” and “credit default swaps,” is a hot topic in international policy circles, largely because failures on this murky side of the market are blamed for the 2008 global credit meltdown and the recession that followed. Hyndman even suggests that losing the Supreme Court case focused the federal government’s attention “precisely where Canada needs to do a better job to get regulation right.”
Whatever slice of the market Flaherty decides to tackle, settling on that approach shouldn’t take much longer. “Our planning horizon is in months, not years,” Hyndman said. On whether he and Ritchie will go back then to their provincial jobs, or stay on to run an agency set up to bring new regulations into force, he said only, “We have not sought, nor been offered, permanent federal positions.”
Before you get all that upset, that is probably a deal for two guys of that talent who would make much more in the private sector. That being said, it probably won’t get enough provinces to sign on and in the end, will be a lot of money down the drain.
Read the third paragraph carefully.
So how’s the mood in the party? “It’s s–tty,” one long-time Conservative political staffer, now recycled in the private sector, said the other day. “I’m a Conservative, and I don’t know what the government stands for.”
The mood this Conservative described—on condition of anonymity, like other party members who spoke for this story—was a long way from despair. “The grassroots of the party is overwhelmingly behind the PM. I don’t think that will ever wear off.” But the five-alarm gong show around Wright, Duffy, Wallin and the rest has made a lot of Conservatives angry and nervous. “If your whole message is that you’re competent people,” this former staffer said, “it is harmful to seem incompetent.”
For several days after Harper accepted Wright’s resignation on May 19, the government could offer no coherent explanation for what had happened. Right up to the end of May the government seemed unsure how to handle the mess.
The chaos led at least one old PMO hand to offer his assistance. Several Conservative sources say that at the beginning of June, Dimitri Soudas, a former PMO communications director who now works for the Canadian Olympic Committee, telephoned the PMO to offer communications advice. Whatever Soudas told his former colleagues would have been mixed in with all the other signals a government receives from its members and supporters, but by last week the Conservatives were offering a more unapologetic defence of Harper’s behaviour, coupled with sharp digs at the opposition parties. The implied message was: If we’re going to be in trouble, we won’t be the only party in trouble.
The news of the day fades from memory. Between the 2008 and 2011 elections Harper endured a steady stream of allegations and missteps, including the controversy over proroguing Parliament, the allegations about abuse of Afghan prisoners, and former minister Bev Oda’s clumsy doctoring (“NOT”) of a memo from her department. Very little of it mattered on election day in 2011, and the Conservatives won a majority of seats in the Commons for the first time.
But Conservatives know the Harper government isn’t eternal, and they have begun to wonder what it will feel like when Harper loses his grip on power for good. They hope the feeling they’ve had this spring isn’t it. “You’re associated with a certain quality, like good government, for a long time and it holds up under wear and tear,” the former Conservative staffer said. “And then one day it tips over. And once it tips, you’ve just lost it and you can’t get it back. You’ve just lost that characteristic.”
Those earlier uproars from 2008-11 often shared common features: they were of interest mostly only to people who work in Ottawa, and they tended to anger people who had never voted Conservative anyway. Conservatives were pretty sure a sitting prime minister should be allowed to ring up the governor general and shut down Parliament now and then, as indeed Jean Chrétien did on more than one occasion. It was no skin off their nose if Harper exercised the same prerogative.
But this business with Wright, Duffy, and a Prime Minister who seemed oblivious and has since seemed deeply rattled is different, another former Hill staffer said. This one described getting an earful about the Senate and about Harper’s associates during a trip through rural British Columbia. The people complaining “were our demographic, in our geography,” this source said. “More than anything else it’s our people who are upset. It kind of comes across as a feeling of betrayal.”