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Canada Feels A Hard Wind Blowing From The Right

International Outlook

Canada Feels a Hard Wind Blowing from the Right

On Nov. 28, the day after their national elections, Canadians will likely have the same Prime Minister they've had since 1993: Jean Chretien, boss of the Liberal Party.

But Canadians will get something else post-election: a new, powerful right-wing opposition led by Stockwell Day, who has shocked the Establishment by demolishing the country's moderate conservatives and posing a stiff challenge to Chretien himself. How Day carries himself in opposition could determine whether his hard-right agenda becomes a cornerstone of national policy.

Day, the 50-year-old former pastor and treasurer of Alberta province, won the leadership of the conservative Canadian Alliance only in July. Now, Day and the Alliance--which started as a far-right party in Canada's prairie provinces--are giving Chretien and the Liberals a run for their money. The campaign has shaped up to be rough, with Liberal leaders accusing Day's supporters of being racist, anti-Semitic, and anti-immigration, and the Alliance shooting back that liberals are using scare tactics to stop defections to the Day camp.NATIONAL PULPIT. Polls show the Liberals likely to win: The party is enjoying 45% support, vs. the Alliance's 25%. But the once-powerful Progressive Conservatives and the separatist Bloc Quebecois are polling at or under 10%. And few thought the Alliance would gather this much support on its platform of radically lower taxes and a lot less government. The Liberals will struggle to pass new laws in such a divided Parliament.

Short of an outright victory, a national pulpit in Parliament is just what Day wants. "I am going to be very vigorous as member of the opposition to go after and expose the record of the Liberal government," he told BUSINESS WEEK while campaigning in Vancouver on Nov. 16. Day's goals are to preach the virtues of a kind of Thatcherite conservatism to Canadians and lay the groundwork for a shot at the Prime Minister's job the next time a general election is called, by 2005.

Since the Alliance will be in the minority and cannot propose legislation, Day's big power will be to hammer at Chretien during the daily Prime Minister's question time in the House of Commons. Also, says Alliance Campaign Manager Jason T. Kenney, the party will be trying to drum up more support, especially from the ranks of the crumbling Progressive Conservatives. Although the Alliance has gained in British Columbia in the campaign, it has attracted few voters in liberal Ontario. And while some Progressive Conservative insiders have joined the Alliance, leaders such as former Prime Minister Brian Mulroney refuse to do so.

Undeterred, Day will keep making national issues of his main provincial policies. Like Margaret Thatcher and Ronald Reagan in the 1980s, he wants to slash currently generous subsidies for job-creation programs and privatize businesses such as the Canadian Broadcasting Corp. Most important is Day's tax policy. He wants to tax incomes over $100,000 at 25%, compared with 29% now. Canadians earning less than that would pay 17%. Day even favors an eventual move to a flat 17% levy. Partly in response, Chretien's Liberal government unveiled $100 billion in promised tax cuts just five days before the Prime Minister called the election.

What could block Day from creating a permanent force in Canadian politics are the Alliance's positions on social issues and dismantling the welfare state. Many voters cringe at Day's support for fundamentalist Christian views and his willingness to hold a referendum on banning abortion. Then again, in the 1970s few expected either Thatcher or Reagan to rise to power. Day has up to five years to make his case.By Petti Fong in Vancouver, B.C.; Edited by Rose BradyReturn to top

After Fujimori

Many Peruvians cheered when their President, Alberto Fujimori, suddenly resigned while visiting Tokyo on Nov. 20. His departure ends a decade of strong-arm rule. Now it will be up to an interim President to maintain stability as Peru prepares for new elections scheduled for April. Congress was expected to tap 63-year-old Speaker Valentin Paniagua, a member of the opposition Popular Action party, for that post on Nov. 21.

Paniagua faces a tough job. To consolidate power, analysts say, he must form a strong Cabinet that includes both Fujimori allies and opposition forces. The government must "guarantee fair elections, avoid economic collapse, and investigate corruption," says Augusto Alvarez, an analyst at Apoyo Comunicaciones, a local think tank. Last May's election, in which Fujimori won a third term, was marred by charges of fraud. He made a surprise decision in September to end his term early and call new elections after his top adviser, Vladimiro Montesinos, was filmed allegedly bribing a congressman.

As many as 12 rivals could be on the Apr. 8 ballot. Prominent figures expected to run include Stanford University-educated economist Alejandro Toledo, who mounted a challenge to Fujimori last time. Civil rights ombudsman Jorge Santistevan and Carlos Bolona, Fujimori's Economy Minister, are also likely to throw their hats into the ring.

The uncertainty is taking a toll on economic growth, which could be as low as 1.5% next year. Wary investors are likely to stay on the sidelines until a new President takes power in July.By Jane Holligan in Lima; Edited by Rose BradyReturn to top

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