News from British and Canadian Conservatives

Tuesday, December 02, 2008

Stephane Dion's rag bag army

Well it looks like a done deal. Stephane Dion has assembled a rag bag army of "Liberals", Socialists and Separatists to overthrow the man Canada chose as its Conservative Prime Minister in October.

Stephane Dion claims that Stephan Harper has lost the confidence of the Canadian House of Commons. Sadly, the confidence of the Canadian public amounts to diddly-squat in Dion's eyes. Having presided over the worst Liberal electoral defeat since Confederation in 1867, Stephane Dion will become Prime Minister with a mere 26% of the vote.

So what democratic mandate do the Liberals, NDP and Bloc have to govern over Canada. None, it seems to me. Prior to the election, the Liberals tore into NDP policy. "taliban" Jack Layton (NDP leader) stated that he was running to be Prime Minister, when he was actually seeking office as Dion's bitch. The only party which is part of the new agreement which was honest was the Bloc. They said that they wanted to tear Canada apart, and now they are working with the Liberals and NDP to achieve exactly that.

I wonder how long the coalition will be able to survive. Although it is unprededented in Canadian Federal History for the opposition parties to overthrow the government and form a coalition excluding the country's largest party, there are certain parallels to the UK in the 1970s. There, the two elections of 1974 returned first a Labour minority and then a very small Labour majority, which soon evaporated due to by-elections and such attrition. In the end, Labour was only able to survive in office thanks to the support of the Liberal Party and Nationalists in Scotland, Wales and Ulster. Eventually it all came crashing down around them. The Winter of Discontent saw so many strikes that rubbish was piling up in the streets, and bodies were lying unburried. Sterling suffered devaluation. Inflation hit 27.5%. The budget deficit became so wide that Britain was bailed out by the IMF, and forced into a fire sale of assets (including the denationalisation of British Petroleum). What followed was Margaret Thatcher and 18 years of uninterupted Conservative government in Britain. Possibly the one sign of light at the end of the tunnel for Canada is the prospect of a Conservative landslide next election!

I would think that Liberal voters in Quebec will be the most perturbed by the recent events. There are many ridings where the Liberals gain support from across the political spectrum in attempt to unify the federalist vote and keep the Bloc out of office. With the Liberals now firmly in bed with Duceppe's separatists, there will be many former Liberals looking for a new home, and the Conservatives will be their best bet.

In the meantime, Canada can look forward to massive budget deficits. Already the opposition coalition has pledged $30bn of spending, despite all three parties campaigning on pledges not to instigate a bedget deficit. The only question is where the money will come from in due course. They have plenty of options, as both the Liberals and NDP went into the last election pledging tax rises. The Liberals want a Green Shift, taxing pretty much everything, whereas the NDP focussed on raising taxes on industry. Clearly that's just what we need at a time of economic uncertainty.

No wonder the Toronto Stock Exchange suffered its biggest ever one day drop today. The decline of more than 9% was considerably higher than any other major, broad-based stock market.