Infertile Ground

This week, the Conservative government in Ottawa nixed a $39 Billion takeover bid of Potash Corp by Australia-based BHP Billiton. Industry Minister Tony Clement broke his rhythm as he read a prepared statement in the foyer of the House of Commons reading his “Canada’s open for business” preamble and then taking a deep breath and then delivering his verdict against foreign investment.

Economically, this shook the faith of fiscal conservatives. The Investment Canada Act mandates compulsory review of such foreign takeovers when they exceed $299 million in assets exchanged. But as fiscal conservatives can we be surprised when our ideas don’t sprout when they have not taken root?

The blocking of the potash takeover put to shame our principle of free investment and our global reputation of being open to business. By the time Clement had finished speaking, it was front-page news on the Wall Street Journal’s site. The blackberries of Ottawa-based consultant lobbyists buzzed with bewilderment from clients in Frankfurt. However, this wasn’t a decision made in the broadest political context of global economic stimulus, it was one made in the more raw and narrow context of saving 13 Conservative seats in Saskatchewan. And by doing so, acting wholly unconservative.

Politically it was the right move, but it should not have been. More votes were saved in Saskatchewan this week than were lost on Bay street. Yet as with the stimulus, for Conservatives both in name and in principle, it ripped at our guts and gave us great pause as to what we’re doing in Ottawa if not acting to advance rational objectives and liberal free-market principles.

Back in early 2009 when other developed nations doing it and spending at least two percent of GDP on government make-work projects, this government caved to peer-pressure and took a hit of illicit economic enhancing stimulus. In order to participate in the global pork project, Canada — while best-positioned to whether the global economic downturn — conceded by jumping into the sordid business of direct economic intervention in order to keep borders open to other countries (especially the US) who were looking at stimulus out of conceived necessity rather than as a go along. Indeed, if we had eschewed stimulus, our access to markets would have been closed to government projects in other countries. That 2% of GDP was rationalized by our government in Ottawa as a small price to pay for shelter from a global wave of protectionism that lapped at our shores and border. Yet, I have never heard my government discuss this concession to fiscal conservatives so plainly. But in turn, we fiscal conservatives also fail the governments we elect.

I’ve written before that parties and governments are only principled up to a point. By definition, a government must win a majority or at least a plurality of votes or seats to act. This week the government acted according to a majority of opinion where it counted as votes — in Saskatchewan. Eighty five percent of the residents of that province were firmly against the foreign takeover. As Conservatives with populist roots we should at least take comfort that provincial rights were respected. While acted as a central planner, the plan recognized provincial autonomy.

What should shock and concern us though is that a great number of Saskatchewans either thought that their government still owned the resource or that the majority of shares in Potash Corp were actually owned by Canadians. A Conference Board of Canada report held the sobering truth. For the knee-jerk economic nationalists, it was unknown that a majority of shares of Potash Corp were foreign owned. What should shock us further is that a great number of Canadians are not passionate about the free market principles that have brought more people out of poverty than any other miracle in our history.

These past couple of years have been jarring for a town filled with reporters that cover five news beats with an inch of depth and politicos that write policy on the fly between their stints in undergraduate and business school programs. From constitutional crises, to prorogation, from censuses to potash, if Wikipedia were a publicly traded company, the government would have already nationalized it as a “strategic resource”. Hours before the announcement, many reporters were scrambling to justify their gut feeling that the government was about to go in the wrong direction on the file and approve the takeover. “Apparently potash is some kind of fertilizer made of salt,” one remarked. “‘Pawd-ash’ not ‘pot-ash’ is how its pronounced,” remarked another. When you pair understaffed newsrooms against an army of online amateur “experts” and professional rent-seekers willing to step into the void, you have a recipe for reactionary policy that grows like a weed.

The major communications challenge unmet by this government and by the movement that puts its hopes in the same is that the ground on important issues such as foreign-investment in potash has not been prepared; the studies sit on dusty shelves, the advocates recline unprepared or over-confident. In the new world of Facebook populism, where activism is made more broadly accessible, parties struggle to cultivate grassroots activism and observers sometimes fail to calibrate to measure the significance of an online uprising.

In recent memory, the government has only once prepared the ground for a key showdown on a contentious issue: the long-gun registry. But as for other issues that matter, policy has only been jarringly announced and clumsily if not sparsely advocated. And still, the government is but one megaphone for conservative issues. If conservatives want to see their values implemented in any government (whatever its name), a government that can only a plurality of votes, we must also prepare the soil.

Globally, conservatives must entrench free-market principles as the de facto standard. If protectionists were political pariahs, parties in various countries would compete over who could make the economy freer, not who could protect and reclaim the most from foreign investment. My pride in Canada should be its openness to investment and international growth, not its stagnation for the sake of the failed practice of economic nationalism. Yet, our principles cannot exist in a vacuum; our ideals face competition from special interests. Conservatives cannot believe that government should be small and with limited influence while investing their hopes on it to make transformational change. Our challenge is greater than any government; we have a lot of soil to till because until then our ideas cannot sprout in infertile ground.

New (old) details on the Sauvé-West Block renovation story

Myth: Sauvé says that he discussed contracts with Christian Paradis. Therefore Liberals suggest Conservative political interference in granting the West Block renovation contract to Sauvé.

La Presse, August 25, 2008

Le plus récent contrat est celui de 8,9 millions pour la réfection de l’édifice de l’Ouest du parlement canadien, un contrat qui a été «obtenu par appel d’offres et sans aucune implication politique», ajoute [Sauvé]. Évidemment, il s’agit d’un nouveau client fort intéressant puisque tout le programme de restauration des édifices parlementaires à Ottawa est évalué à un milliard.

The latest contract is $ 8.9 million for the rehabilitation of the West Block of the Parliament of Canada, a contract that was “obtained through competitive bidding and without any political involvement,” [Sauvé] adds . Obviously, this is a very interesting new customer since the whole program to restore the Parliament buildings in Ottawa is valued at one billion.

Fact: La Press quotes Sauvé in 2008 that the contract was “obtained through competitive bidding and without any political involvement.” In news stories this week, the Canadian Press alleges that Sauvé hired “Tory connected” businessman Gilles Varin to obtain the contract. Sauvé’s earlier quote contradicts the latest narrative from the press and from Sauvé that the Tories had their mitts in the West Block renovation contract.

Myth: Sauvé and Varin are Conservatives. Contracts were obtained were granted because of political favouritism.

Journal de Montreal, June 18th 2009 (after that Tory fundraiser)

Selon ce que le Journal a appris, le président de l’entreprise en faillite LM Sauvé avait confié à plusieurs personnes, dont quelques ténors libéraux, qu’il songeait à se présenter à l’investiture du Parti libéral du Canada pour le comté d’Outremont.

Il a rencontré le lieutenant politique de Michael Ignatieff au Québec, Denis Coderre, pour lui faire part de ses intentions. M. Coderre, qui ignorait tout des liens de Paul Sauvé avec le crime organisé, l’aurait encouragé à vendre des cartes de membres comme d’autres candidats à l’investiture.

The Journal has learned, the president of the bankrupt company LM Sauvé had told several people, including some big liberals, he considered running for the nomination of the Liberal Party of Canada for the County of Outremont.

He met with political lieutenant in Quebec by Michael Ignatieff, Denis Coderre, to inform him of his intentions. Mr. Coderre, who knew nothing of Paul Sauvé links with organized crime, have encouraged the sale of membership cards as other candidates for the nomination.

Fact: Varin has never been an organizer for the Conservative Party of Canada nor has he ever been a member of it according to party records (confirmed by the Party in a release this week). Sauvé was a Tory to the degree that he told Liberals that he was considering running for the Liberal Party in Outremont.

Myth: Liberal hands are clean in this affair. They certainly didn’t advocate for Public Works to support Sauvé’s company and project.

Le Droit, April 15th 2009

Une faillite de L. M. Sauvé pourrait avoir un effet domino sur la trentaine d’entreprises de la région impliquées de près ou de loin dans le projet. Pour le député de Hull-Aylmer, Marcel Proulx, chacun doit mettre de l’eau dans son vin pour minimiser les pertes. « En période difficile, j’assume que Travaux publics fera tout en son possible pour empêcher qu’il y ait faillite de l’entrepreneur général, ce qui amènerait une pluie de faillites chez les sous-traitants, dit-il. J’espère que Travaux publics agira en bon père de famille. »

A bankruptcy of L. Sauvé could have a domino effect on the thirty companies in the region involved directly or indirectly in the project. The member for Hull-Aylmer, Marcel Proulx, says everyone must put water in his wine to minimize losses. “In difficult times, I assume that Public Works will do its utmost to prevent there being a general contractor’s bankruptcy, which would cause a rain of bankruptcies among subcontractors, he said. I hope that Public Works will act as a good father.”

Fact: Marcel Proulx is the Liberal MP for Hull-Aylmer. Mr. Proulx went on record expressing his desire that Public Works support Sauvé’s company and its project.

Running away from the brand

In Canada, the Conservatives unapologetically spend, while in the UK, they are about to cut — but not without apology.

An email I just received from the UK Conservatives addressed to party faithful:

The legacy of Britain’s debt is Labour’s to be sure, but in an email to those that elected you, claim credit for taking action. These cuts are your cuts and you should proud to implement the plan to address the crisis.

And gosh, no money to address climate change?