Article on Dion Victory

Here is a short piece that I wrote for the NAFTA Investment Review. It is by no means thrilling, but I figure if someone saw fit to publish it, it might appeal to others.

Selection of Canada’s New Liberal Party Leader Likely to Focus Pressure on the Ruling Conservatives

Alyssa Tomkins

On December 2, Canada’s federal Liberal Party selected Stéphane Dion as its new leader. The choice is significant, given that every federal Liberal Party leader has become a Prime Minister of Canada, and the Liberals have formed the government of Canada for large majority period since the Great Depression. The Liberals lost power to the rival Conservative Party in early 2006.

The Conservatives currently rule with only a minority government, and it has been widely speculated that another election is likely to be called in 2007. Reports suggest that Conservative Prime Minister Stephen Harper favours calling an election in the spring, after introducing a budget that will serve as a campaign platform. While Mr. Dion and others pressed certain issues during the course of the long leadership campaign, the fact that the opposition Liberals can now focus again externally on all issues likely to be relevant in the next federal election will likely lead to increased attention to the policies of the ruling Conservatives.

A former Quebec academic and a cabinet minister in previous Liberal governments, Mr. Dion headed into the Liberal leadership convention as a fourth-ranked underdog candidate, but emerged with a majority of delegate votes by a small margin in the fourth and final round of voting.

Mr. Dion’s leadership platform adopted a so-called “Three Pillar” approach, which added environmental sustainability to the Liberal Party's traditional policies of economic growth and social justice. He has stated that the world is at the beginning of the next industrial revolution – a move to a sustainable economy, forced by galloping energy prices. Mr. Dion maintains that to be successful in the sustainable economy states must find ways to align the environmental and the economy.

The early impact on the business sector of Mr. Dion as leader of the opposition Liberals is not yet clear. However, it is thought that the Conservative government may be forced to respond with further regulatory measures in light of the Liberals’ new environmental focus. Given Canada’s resource-base, environmental policy can have significant effects on business decisions, especially Canada’s resource sectors. Indeed, perhaps as a timely pre-emptive response to the anticipated Liberal agenda under Mr. Dion, Prime Minister Harper recently announced one of world's most sweeping efforts to regulate harmful chemicals.

The extent to which Mr. Dion’s advocacy for the environment, including adherence to the Kyoto protocol, forces the Conservatives to respond will likely be determined by the polls. But, it is worth noting that in some opinion polls, the environment now tops health care as the top public concern in Canada. The Conservatives announced early in their tenure that they would reverse Canada’s position taken under a previous Liberal government as a signatory to the Kyoto protocol, and have proposed alternative clean-air legislation — legislation that has been criticised by many stakeholders as too weak.

On other fronts, it is reported that under Mr. Dion the Liberals may attempt to create a campaign issue out of the Conservative government’s announced plans to change the taxation of income trusts by proposing to extend the grace period beyond four years (see NAFTIR Issue l). In addition, Mr. Dion recently promised that a Liberal government would revive Canada’s Wheat Board if it is dismantled by the Conservative government. The Conservatives have promised to end the board's long-standing monopoly on Canada’s wheat and barley sales, preferring instead to make participation in the board voluntary.