November 29, 2000

Small Biz better off with Liberal majority

Regardless of how they voted in this week's election, the big news for Canada's small business community is not just that Jean Chrétien won, but that Canadians decided to send a majority government to Ottawa. The country voted for stability, something that few minority governments can provide.

The win was a significant personal triumph for Chrétien. He called the election amidst considerable dissatisfaction among his caucus members, many of whom would have preferred to go to the urns with Paul Martin at the helm.

But Chrétien's instincts were good, and the Liberals will return to Parliament with 18 extra seats and a divided opposition. The Alliance failed to make its expected breakthrough in Ontario, and worse, failed to stomp out Joe Clark's Conservatives, almost guaranteeing a divided right for at least one more election.

The Liberal's performance in Quebec has also got to be seen as a big personal triumph for Jean Chrétien. The party won the popular vote and picked up a half dozen seats from the Bloc. Federalist parties won the majority of seats in the province for the first time since the failed Meech Lake Accord.

In fact it may be time to look at Chrétien's Quebec strategy in a new light. The prime minister has been criticized for his lack of popularity in his home province and his ineffectiveness against the separatists. But although he has been unable to deliver a knock-out blow to the movement, his small victories are beginning to add up.

The No side's narrow 1995 referendum win, which was interpreted almost as a defeat at the time, is starting to look like a turning point. Chrétien suffered from considerable criticism due to his hands off approach to the campaign. But by voting for federalism, Quebecers tacitly accepted Trudeau's 1982 patriation of the constitution, which had been a thorn in their sides for more than a decade.

This year's Quebec election results - achieved despite passage of the clarity bill -- must be construed as a tacit acceptance of that legislation as well. In fact while talk of separatism - which has caused untold harm to Quebec businesses -- is not dead, it has been put to sleep for a while, and Chrétien should get a big chunk of the credit.

Although many small business owners instinctively favor Alliance policies such as deep tax cuts and less government regulation, as the party's campaign blunders multiplied, it became evident they were not ready for prime time. By surrounding himself almost exclusively with advisors from his "Alberta Mafia," and ignoring Harris Conservatives such as Tom Long, Day came off looking more like a Western hayseed than a Canadian prime minister.

The Alliance began the campaign with two hands tied behind its back. Its opposition to excessive regional subsidies made it unlikely to achieve significant inroads into Atlantic Canada. This was underscored by the insensitivity of an Alliance official who questioned the work ethic of Maritimers. In Quebec, the picture was less clear. Stockwell Day's advocacy of greater provincial autonomy gave the party some upside potential, but his poor performance in the French language debates sealed his fate.

That left Ontario. With 64 seats in the West, the Alliance needed to win 87 in Ontario to form a majority government, something that just was not in the cards. That meant the best the Alliance could do was to win a minority government, which would have forced them to compromise with their potential partners - most likely the Bloc -- on most policies.

So although the Alliance platform would have been slightly more beneficial to small businesses, because the Liberals can form a majority and will be able to implement their policies, the sector stands to benefit more from a Liberal government than from an Alliance one.

A strong Liberal majority will give the party the ability to act in key areas that will be on the agenda over the next few years. Among them: closer economic integration with the U.S., individual and corporate tax cuts as well as banking reform legislation which will be reintroduced when Parliament reconvenes.


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