How Scandal Drives Canadian Political History
When the world’s nations are ranked in Transparency International’s Corruption Perceptions Index, Canada receives a respectable grade. As one of the world’s most stable democracies with a high standard of living, it is deserved. With relative freedom from violent crime and comprehensive social programs including universal medicare, Canada is one of the world’s most desirable countries of residence taking in roughly 250,000 newcomers annually. “Peace, Order and Good Government” is the catchphrase encompassing Canada’s objectives as a society.
It is said of federal politics that Canadians don’t elect new governments, they toss old ones out. This truism applied when Brian Mulroney led the Progressive Conservative party to a resounding victory in 1984 over the respected but rusty Liberal leader, John Turner.
The Mulroney era was a high water mark in Progressive Conservative history. No PC leader had won a majority since John Diefenbaker in 1958. Having a fluently bilingual leader of a latent Québec nationalist coalition combined with its traditional voting block proved strategically unbeatable. As their landslide win ended decades of futility, the Tories wasted no time in asserting their domain over the spoils of power.
Details of a controversial land deal emerged from the Saint-Jean, Québec riding held by Minister of State for Transport, Andre Bissonnette. The vacant farmland in question was sold to aerospace giant, Oerlikon, for Cdn 2.1 million dollars in January 1986. Unbeknownst to Oerlikon executives, the same piece of land was sold just eleven days prior for $584,000. The buyer was former Conservative riding president and Bissonnette associate, Normand Ouelettte. The plot of land changed hands no fewer than three times in eleven days leading up to the Oerlikon purchase. After his wife was reported to have banked $400,000 from the deal, Bissonnette was dropped from cabinet on the heels of an Royal Canadian Mounted Police investigation.
In 1991, businessman Glen Kealey implicated eleven politicians with Conservative Party ties in a bribery and kickback scheme to defraud the Government of Canada. After a three year campaign, Kealey was able to get the charges approved by a justice of the peace. He claimed to have been solicited for a bribe of $5000 by cabinet minister Roch Lasalle. Lasalle would eventually resign after organizing a party where he charged a $5000 admission fee for companies seeking federal government contracts. Criminal charges against him were eventually dropped.
Fraud and conflict of interest allegations also dogged Conservative Member of Parliament Michel Gravel. He pled guilty to fifteen counts of fraud, was fined $50,000 and served four months in jail.
But these scandals would be dwarfed by the magnitude of the Airbus affair.
Canada’s national airline, Air Canada, was still a crown corporation whose executives were appointed through political affiliation or patronage. The Conservatives appointed a new board of directors to the carrier in March 1985. Their first order of business was a major procurement of a new fleet of aircraft. Boeing, McDonnell Douglas and European consortium Airbus Industrie emerged as the top three bidders. In July 1988, a 1.8 billion dollar deal with Airbus Industrie was announced, making it the largest aviation purchase in Canadian history.
Canada’s opposition Liberals decried the deal as overpriced. Boeing lodged a formal complaint citing unfair business practices and a Royal Canadian Mounted Police investigation followed. As the RCMP leadership were also Conservative political appointees, the investigation was conveniently brought to a standstill.
The Airbus Affair
With a mandate to bring Québec into confederation, the Conservatives sought to end Canada’s unresolved constitutional quagmire. A successful treaty with the provinces would establish them as Canada’s unifying party where successive Liberal administrations had failed. As scandals overshadowed his nation building agenda, Mulroney’s reputation as a consensus builder was about to be tested.
The Meech Lake Accord was successfully negotiated with sitting provincial premiers, stipulating a three year deadline for ratification in each province’s legislature. As the deadline approached, several provinces elected new governments with no political stake in it. Interest groups cited a lack of consultation as the proposed constitutional changes had wide ranging human and indigenous rights implications. In an already fractious atmosphere around the negotiations, Mulroney quipped to reporters that he designed the process to pressure the players to make a deal and “roll the dice”.
His ill conceived choice of words sparked outrage and sowed doubt. Days before the deadline, the vote to ratify was defeated in the Manitoba legislature. This led to a cancellation of the ratification in Newfoundland, thereby rendering the Meech Lake Accord stillborn. Feeling the wrath of voters who opposed the deal, the Québec, BC and Alberta legislatures passed laws requiring future constitutional amendments to be passed through referendum before reaching their respective floors for ratification.
Emboldened by the moral victory of Meech Lake and desperate for their place in history, the Conservatives banked their political hopes on the Charlottetown Accord. After reaching a constitutional agreement with the premiers of the day, the public campaign began haltingly. Mulroney’s credibility gap with the voting public proved insurmountable leading up to the national referendum. The Charlottetown Accord was defeated by a margin of 54.3% to 45.7%.
As his second term drew to a close, advisors told Mulroney he was unelectable. He announced his resignation and stepped down in June 1993.
Swiss Bank Accounts
In March 1995, the investigative journalism program, The Fifth Estate, revealed that Airbus Industrie may have paid secret commissions to Canadian politicians through a Swiss bank account. An RCMP investigation was opened as Swiss and Canadian governments cooperated to share evidence. The Swiss money trail went through a Liechtenstein shell company called International Aircraft Leasing controlled by German businessman Karlheinz Schreiber. Former PM Brian Mulroney and lobbyist Frank Moores were named as suspects.
In November 1995, Mulroney responded with a 50 million dollar lawsuit against the RCMP and Government of Canada. He would eventually settle with the Canadian government for $2.1 million, out of court, in January 1997.
German tax authorities issued a warrant for Schreiber’s arrest for DM 24 million in undeclared income from years or brokering aircraft and arms deals. Schreiber was extradited to Germany after repeated unsuccessful appeals.
Hi Writer William Kaplan later revealed that Mulroney had been paid $300,000 in cash by Schreiber in 1993. As the cash payments became public knowledge, Mulroney quickly made a voluntary income disclosure to Revenue Canada. It was believed but never proven that he did so only after learning of the RCMP investigation. Schreiber sued Mulroney for failing to provide the agreed upon services for the $300,000 cash payments.
Liberal leader Stéphane Dion stated that the government would never have settled with Mulroney had they known about the cash payments. Mulroney made a public apology, never stating what services were rendered for the funds nor admitting wrongdoing. In April 2003, the RCMP declared its investigation of the Airbus affair closed with no further charges laid.
Collapse of the Progressive Conservative Party
Mulroney’s political coalition unraveled spectacularly after his fall from grace. In the 1993 federal election, Conservative leader Kim Campbell lost her seat. The Tories were wiped out, going from 156 to 2 seats in the House of Commons. Western Canada’s support for the PC party collapsed in favour of the populist Reform Party led by Preston Manning.
MPs from Mulroney’s Québec caucus led by Lucien Bouchard would form Canada’s first federally chartered separatist party, the Bloq Québécois. The failure of the Meech Lake and Charlottetown Accords renewed appeals for Québec independence. The separatist Parti Québécois won the provincial election and passed legislation for a vote on forming a new nation. Canada was pushed to the brink of dissolution by the 1995 Québec referendum as the unity option barely prevailed with 50.58% of the vote.
Leading up to the referendum, polls showed a very real possibility of a separatist victory. In Ottawa, panic had set in with Jean Chrétien’s Liberals. The federal government unleashed a torrent of advertising campaigns to boost support for Canadian unity in Québec. The ensuing financial abuses in the management of the advertising contracts led to Canada’s more recent political debacle, The Sponsorship Scandal. The resulting fallout ended the Liberal reign of the Chretien — Martin era.
With the rise of the Reform Party in the west and the decline of the Progressive Conservative party elsewhere, Canada’s right of center went through a painful makeover and united under the banner of The Conservative Party of Canada. On January 23, 2006, Conservative Leader Stephen Harper was elected Canada’s 22nd Prime Minister — the first Western Canadian to do so since Joe Clark in 1979.
In politics, as in any human endeavour, there are outliers and there are outright liars. Canada’s revolving door of scandal and eviction from high office continues unabated.