Can Chretien Keep Canada From Coming Apart?

At first glance, Jean Chretien's Liberal Party seems to have scored an astounding victory in Canada's national elections. The ruling Progressive Conservatives won just two seats in the new Parliament. So sweeping was the Tories' defeat that even outgoing Prime Minister Kim Campbell was dumped by her Vancouver riding.

But the voters' brutal rejection of the Conservatives was more an angry protest against the status quo than an endorsement of Chretien's Liberals. When closely examined, Chretien's majority--177 of 295 seats--looks less impressive. It comes almost entirely from recession-battered central Canada and the depressed Atlantic provinces, which favor government programs to ease unemployment. In the West, voters sided overwhelmingly with the new Reform Party, a populist, budget-cutting group, well to the right of the Tories. And in Quebec, the Bloc Qu b cois, a French secessionist party, took 54 of the 75 seats. So the two main leading opposition groups in Parliament will be radical, regional parties.

When Chretien takes over as Prime Minister next month, he will be presiding over what respected pollster Angus Reid calls "the beginning of a whole new era in Canadian politics." It will likely be a period of surging regional strength and brazen challenges to federal authority. The question on everyone's minds is whether Chretien, a 26-year veteran of Parliament from Quebec, has what it takes to hold an increasingly polarized country together. While analysts note that the 59-year-old is blessed with down-to-earth political skills, that may not be enough to head off the surging tide of separatist sentiment in Quebec.

FISCAL WOES. They also say that economic restraints will severely limit Chretien's freedom of action. His supporters are likely to quickly discover that he cannot deliver on his campaign's winning themes of a return to "the good old days" of ample job opportunities and generous benefits. His stated first priority is to tackle Canada's 11.2% unemployment rate. But with the deficit running at near-record levels, he simply lacks the money to create many jobs. He may not even be able to fully fund the $4.5 billion job-creating infrastructure program that he promised.

Meanwhile, he will face pressure from the financial markets and the Reform Party to cut spending to tame the deficit. As a former Finance Minister who helped create many of Canada's social programs, Chretien has little stomach for this task. But with net government debt now approaching 90% of gross domestic product, second only to Italy among the G-7 powers, "Chretien won't have any choice but to cut spending," warns Thomas d'Aquino, president of the Business Council on National Issues. If he hesitates, d'Aquino says, "the markets will force his hand."

Chretien will also have a tough time keeping his pledge to renegotiate the 1989 Free Trade Agreement with the U.S., which many Canadians blame for their economic woes. Chretien wants new provisions to protect Canadian exporters of products such as softwood lumber and steel against persistent U.S. subsidy and dumping charges. But with Congress in the midst of a bitter debate over the North American Free Trade Agreement, the Clinton Administration has no appetite for renegotiation now. Even if Chretien eventually brings President Clinton to the table, the U.S. is certain to press its own demands, such as easing the protections now given to Canada's cultural industries.

Still, these problems pale beside the resurgence of Quebec separatism. Foreigners cannot be blamed for thinking Canadians have been fighting about Quebec's status forever. But the battle is entering a new and far more dangerous phase. The separatists have always stayed out of national elections. But now, for the first time, they are sending a massive contingent of MPs to Ottawa expressly committed to independence for Quebec. Incredibly, as the second-largest delegation, they may become the official opposition, even though they hope to destroy the Canadian Confederation.

The Bloc is certain to clash with the Reform Party, which won 52 seats and is vigorously opposed to any special concessions to Quebec. Inevitably, this clash will polarize opinion in Quebec and English-speaking Canada. Meanwhile, the Bloc will be working closely with the provincial Parti Qu b cois to help them win next year's provincial elections in Quebec.

Although a Quebecois, Chretien is ill-equipped to keep Quebec within the fold. As a staunch federalist and onetime disciple of former Prime Minister Pierre Trudeau, who blunted a strong separatist drive in the 1970s, Chretien has alienated many in his home province.

Of course it's by no means certain that Quebec will ultimately vote for separation. When the crunch comes, the Quebecois may sober up and decide such a move would be too costly. But by that time, they may have ruined Chretien's term in office.