C O N F I D E N T I A L SECTION 01 OF 02 OTTAWA 001258 SIPDIS E.O. 12958: DECL: 09/22/2018 TAGS: PREL, PGOV, CA SUBJECT: THE U.S. IN THE CANADIAN FEDERAL ELECTION -- NOT! REF: OTTAWA 1216 Classified By: PolMinCouns Scott Bellard, reason 1.4 (d) 1. (C) Summary. Despite the overwhelming importance of the U.S. to Canada for its economy and security, bilateral relations remain the proverbial 900 pound gorilla that no one wants to talk about in the 2008 Canadian federal election campaigns. This likely reflects an almost inherent inferiority complex of Canadians vis-a-vis their sole neighbor as well as an underlying assumption that the fundamentals of the relationship are strong and unchanging and uncertainty about the outcome of the U.S. Presidential election. End Summary. 2. (C) The United States is overwhelmingly important to Canada in ways that are unimaginable to Americans. With over $500 billion in annual trade, the longest unsecured border in the world, over 200 million border crossings each year, total investment in each other's countries of almost $400 billion, and the unique North American Aerospace Defense (NORAD) partnership to ensure continental security, excellent bilateral relations are essential to Canada's well being. Canadians are, by and large, obsessed with U.S. politics -- especially in the 2008 Presidential race -- and follow them minutely (with many Canadians even wishing they could vote in this U.S. election rather than their own, according to a recent poll). U.S. culture infiltrates Canadian life on every level. 80 pct of Canadians live within 100 miles of the border, and Canadians tend to visit the U.S. much more regularly than their American neighbors come here. 3. (C) Logically, the ability of a candidate, or a party, or most notably the leader of a party successfully to manage this essential relationship should be a key factor for voters to judge in casting their ballots. At least so far in the 2008 Canadian federal election campaign, it is not. There has been almost a deafening silence so far about foreign affairs in general, apart from Prime Minister Stephen Harper's pledge on September 10 that Canadian troops would indeed leave Afghanistan in 2011 according to the terms of the March 2008 House of Commons motion, commenting that "you have to put an end on these things." The Liberals -- and many media commentators -- seized on this as a major Conservative "flip flop," with Liberal Party leader Stephane Dion noting on September 10 that "I have been calling for a firm end date since February 2007" and that "the Conservatives can't be trusted on Afghanistan; they can't be trusted on the climate change crisis; they can't be trusted on the economy." He has returned in subsequent days to the Conservative record on the environment and the economy, but has not pursued the Afghan issue further. All three opposition party leaders joined in calling for the government to release a Parliamentary Budget Officer's report on the full costs of the Afghan mission, which PM Harper agreed to do, with some apparent hesitation. However, no other foreign policy issues have yet risen to the surface in the campaigns, apart from New Democrat Party leader Jack Layton opining on September 7 that "I believe we can say good-bye to the George Bush era in our own conduct overseas." 4. (C) The U.S. market meltdown has provided some fodder for campaign rhetoric, with the Conservatives claiming their earlier fiscal and monetary actions had insulated Canada from much of the economic problems seen across the border. (Comment: there is probably more truth in the fact that the Canadian financial sector does not have a large presence in QCanadian financial sector does not have a large presence in U.S. and other foreign markets, and instead concentrates on the domestic market. The Canadian financial sector has also been quite conservative in its lending and investment choices. End comment.) PM Harper has insisted that the "core" Canadian economy and institutions were sound, while promising to work closely with "other international players" (i.e., not specifically the U.S.) to deal with the current problems. He warned on September 19 that "voters will have to decide who is best to govern in this period of economic uncertainty -- do you want to pay the new Liberal tax? Do you want the Liberals to bring the GST back to 7%?" The Liberals have counter-claimed that Canada is now the "worst performing economy in the G8," while noting earlier Liberal governments had produced eight consecutive balanced budgets and created about 300,000 new jobs annually between 1993 and 2005. The NDP's Layton argued on September 16 that these economic woes are "the clearest possible warning that North American economies under conservative governments, in both Canada and the United States, are on the wrong track," but promised only that an NDP government would institute a "top-to-bottom" review of Canada's regulatory system -- not delving into bilateral policy territory. 5. (C) On the environment, Liberal leader Dion, in defending his "Green Shift" plan on September 11, noted that OTTAWA 00001258 002 OF 002 "both Barack Obama and John McCain are in favor of putting a price on carbon. Our biggest trading partner is moving toward a greener future and we need to do so too." PM Harper has stuck to the standard Conservative references to the Liberal plan as a "carbon tax, which will hit every consumer in every sector" and claimed on September 16 that, under earlier Liberal governments, "greenhouse gas emissions increased by more than 30 percent, one of the worst records of industrialized countries." NDP leader Layton argued that, on the environment, PM Harper "has no plan" while "Dion's plan is wrong and won't work," unlike the NDP plan to reward polluters who "clean up their act and imposing penalties on those that don't," which he said had also been "proposed by both U.S. Presidential candidates, Barack Obama and John McCain." 6. (C) NAFTA? Western Hemisphere Travel Initiative? Border crossing times? The future of NORAD? Canada's role in NATO? Protection of Canadian water reserves? Canadian sovereignty in the Arctic and the Northwest Passage? At least among the leaders of the major parties, these issues have not come up so far in the campaigns, although they seize much public attention in normal times. Even in Ontario and Quebec, with their long and important borders with the U.S., the leadership candidates apparently so far have not ventured to make promises to woo voters who might be disgruntled with U.S. policies and practices. However, these may still emerge as more salient issues at the riding level as individual candidates press the flesh door to door, and may also then percolate up to the leadership formal debates on October 1 and 2. 7. (C) Why the U.S. relationship appears off the table, at least so far, is probably be due to several key factors. An almost inherent Canadian inferiority complex may disincline Canadian political leaders from making this election about the U.S. (unlike in the 1988 free trade campaigns) instead of sticking to domestic topics of bread-and-butter interest to voters. The leaders may also recognize that bilateral relations are simply too important -- and successful -- to turn into political campaign fodder that could backfire. They may also be viewing the poll numbers in the U.S. and recognizing that the results are too close to call. Had the Canadian campaign taken place after the U.S. election, the Conservatives might have been tempted to claim they could work more effectively with a President McCain, or the Liberals with a President Obama. Even this could be a risky strategy, as perceptions of being too close to the U.S. leader are often distasteful to Canadian voters; one recurrent jibe about PM Harper is that he is a "clone of George W. Bush." Ultimately, the U.S. is like the proverbial 900 pound gorilla in the midst of the Canadian federal election: overwhelming but too potentially menacing to acknowledge. Visit Canada,s Economy and Environment Forum at http://www.intelink.gov/communities/state/can ada WILKINS

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