Jean Chretien - MSN Encarta

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Introduction; Early Life; Ministerial Career; Party Leader; Prime Minister; Evaluation

Minister of Finance

In 1977 Trudeau appointed Chrétien to the critically important role of minister of finance. The political situation in Québec influenced Trudeau’s decision. In 1976 the separatist Parti Québécois won control of Québec’s legislature and announced its intention to hold a referendum on whether Québec should secede from Canada. By moving Chrétien to the Department of Finance, Trudeau hoped to use Chrétien’s management skills and appeal as a Québec native to help convince Québec voters of the economic advantages of remaining within the Canadian confederation.

Unfortunately for Chrétien, he came to the Department of Finance when the country was entering a period of severe economic difficulty. Inflation and unemployment were rising while the growing deficit increasingly limited the government’s possible responses. Chrétien could find no course that offered clear solutions. In 1978 Chrétien clashed with the Québec provincial government after he proposed a temporary cut in provincial sales taxes as a means to stimulate the economy. Québec finance minister Jacques Parizeau requested changes to the tax proposal, but Chrétien said Parizeau had already agreed to the proposal before it was announced, and he refused to make changes. As a result Chrétien came under attack from the Québec press and opposition parties, as well as from the Québec government, which refused to participate in the federal tax plan. A few months later Chrétien’s reputation suffered an even more damaging blow when the prime minister announced major spending cuts without consulting him.

In 1979 the Trudeau government lost to the Conservatives in a general election in which the Liberal government’s management of the economy was a central issue. However, the Liberals spent only nine months in opposition because the Conservative government did not command a majority in Parliament. All of the opposition parties combined to vote against the Conservatives’ budget, forcing Prime Minister Joe Clark to call an election. The Liberals won. When Trudeau formed his Cabinet in March 1980, he gave Chrétien the greatest challenge of his ministerial career, appointing him minister of justice. In this position Chrétien was responsible for directing the federal government’s campaign opposing the referendum on Québec secession.

Minister of Justice

A key element in the government’s campaign against the Québec referendum was a promise by Trudeau to reform Canada’s constitution. In May 1980 Québec voters rejected provincial independence, with nearly 60 percent voting against the measure. After the referendum failed, Trudeau assigned Chrétien to work with him to negotiate constitutional changes with the provinces. The government’s proposed changes included streamlining the process for amending the Constitution so that unanimous approval by the provinces would not be required. The government also wanted to incorporate a bill of rights, which the provinces would not be able to override, into the Constitution. This bill of rights was called the Charter of Rights and Freedoms.

Party Leader

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Chrétien was reelected to Parliament in 1984. His party seemed to have little prospect of an early return to power, and his relations with Turner were strained. He resigned his seat in 1986 and resumed practicing law. Four years later Mulroney and the Conservatives once again defeated the Liberals, led by Turner, and Turner resigned. Chrétien received his second chance to seek the party leadership. This time he was the candidate of change, and the tradition of alternating between English- and French-speaking leaders worked to his advantage. In June 1990 the Liberal Party elected Chrétien their leader.

Chrétien assumed the party leadership at a critical point in Canada’s French-English relations. The day before he became party leader, the Meech Lake Accord, a package of amendments the Mulroney government had crafted to make the constitution acceptable to Québec, failed to be approved by the provinces. Throughout his campaign for party leadership, Chrétien had angered Québec nationalists by criticizing the accord for granting Québec special powers and status. When Chrétien became party leader, two Liberal members of Parliament defected to join a new separatist party, the Bloc Québécois, formed to advocate the separatist cause in the federal Parliament. The Québec issue continued to dominate Canadian politics while Chrétien led the official opposition in Parliament. In 1992 the Mulroney government sought public input and support for the Charlottetown Accord, a new set of constitutional amendments intended to placate Québec. Chrétien backed the agreement, but voters rejected it in a national referendum in October 1992.

The failure of the Meech Lake and Charlottetown accords combined with persistent economic problems to doom Mulroney’s government, and he resigned in June 1993. In the campaign for the fall 1993 general election, Mulroney’s successor, Kim Campbell, claimed to offer a change in approach. However, the Liberals emphasized her part in the Mulroney government. The Liberal campaign was built around Chrétien’s populist image, stressing his concern for the plight of the weaker members of society. The Liberals advocated new government investment in job creation and promised to “kill the GST” (an unpopular goods and services tax the Conservatives had introduced). The Liberals also pledged that they would renegotiate the North American Free Trade Agreement (NAFTA). Liberal leaders said the pact, which the Mulroney government had negotiated with the United States and Mexico, would hurt the Canadian economy.

Chrétien and the Liberals won the general election in October 1993, but it was far from a sweeping victory. Their message resonated with the Atlantic provinces (Newfoundland and Labrador, Nova Scotia, New Brunswick, and Prince Edward Island), where they won 31 of 32 seats, and Ontario, where they won 98 of 99. In western Canada, however, a new party, the Reform Party, undercut the appeal of the Liberal Party. The Reform Party won 51 seats in the four western provinces (British Columbia, Saskatchewan, Manitoba, and Alberta), while the Liberals won 27 and the New Democratic Party won 9.

The most disquieting result for Chrétien, the Liberals, and the rest of English Canada was the outcome in Québec. The Liberals had hoped to build on Chrétien’s native-son appeal to carry Québec, but his role in the constitutional debates had hurt him. Many Québécois believed that Chrétien had betrayed them when he opposed special powers for Québec. Both Separatists and moderate Québec nationalists turned instead to the Bloc Québécois, which was led by Lucien Bouchard—a former minister in the Mulroney government who had resigned because he did not feel the Meech Lake Accord adequately dealt with Québec’s needs. This party based its appeal on the claim that English Canada had “rejected” Québec and the only alternative for Québec was to become independent. The Bloc won 54 seats in Québec, the Liberals 20, and the Conservatives 1. With the second largest number of seats in Parliament, the Bloc formed the official opposition, allowing it to make its separatist agenda a continuing focus of parliamentary debate. Every government decision and initiative had to be assessed considering how the Bloc might use it to build support for separatism.

Prime Minister

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First Term

When Chrétien became prime minister in the fall of 1993, his major goal was to reduce the country’s high level of unemployment, but he was constrained by the federal budget deficit. Inherited from the Conservative government, the federal deficit was nearly C$45 billion, which represented 6 percent of Canada’s Gross Domestic Product (GDP).

To tackle the budget deficit, Chrétien appointed Paul Martin, his principal rival for the Liberal leadership in 1990, as minister of finance. Martin moved cautiously in his first year, hoping that an increase in tax revenues as the national economy emerged from the recession of the early 1990s would be enough to bring the deficit down. By the end of 1994, Martin had concluded that significant cuts in government spending were the only way to bring the deficit under control. Martin was supported by Chrétien, who established a Cabinet committee to undertake a comprehensive review of spending and made clear to other ministers that he was committed to budget cuts. With this support, Martin slashed expenses from every area of government activity. Within three years the government had reduced its spending by C$25 billion and was on the path to eliminating its deficit.

The spending cuts under Chrétien helped restore investor confidence in the Canadian economy and enabled Canada to share in a new period of growth in the North American economy. As a result, the rate of job creation increased, and the unemployment rate fell below 10 percent for the first time in more than a decade. At the same time, as the economy improved, revenue from taxes increased, which helped further reduce the deficit.

In the fall of 1993 Chrétien also faced his campaign promise to renegotiate the North American Free Trade Agreement (NAFTA). Parliament had already approved NAFTA in May 1993, but Chrétien wanted to revise it to protect Canada’s cultural industries and to limit the effects on Canada of its provisions in respect to subsidies. However, the agreement was about to come to a vote in the United States Congress, and American trade negotiators were reluctant to make any changes that might jeopardize its passage. A compromise was worked out in which the special recognition accorded Canada’s cultural industries in the original Canada-U.S. Free Trade agreement was continued and it was agreed that the contentious subsidy issues would be addressed through continuing “side” negotiations. The compromise permitted Chrétien to claim that his government’s principal objections had been met, while avoiding problems in the U.S. Congress. The Chrétien government proclaimed the agreement in December, just before it took effect in January 1994.

By approving NAFTA the Chrétien government signaled that it would continue the course of closer economic cooperation with the United States. Canadian nationalists feared that Canada might lose its political independence if the country’s economy became too closely integrated with that of the United States. They criticized this aspect of the Chrétien government’s policy.

Chrétien and his government also faced a new challenge in Québec. In the 1994 Québec provincial election, the Parti Québécois, the provincial separatist party, defeated the Liberal Party, and the new provincial government scheduled another referendum on secession for the fall of 1995. At first, the Chrétien government did not believe that the Separatists could win the referendum because the provincial premier, Jacques Parizeau, was waging a poor campaign. But support began to shift toward the Separatists when Lucien Bouchard, the leader of the federal Bloc Québécois, assumed a leading role in the campaign. Near the end of the campaign several polls indicated the Separatists would win. Chrétien felt pressure to make some concession to moderate nationalist opinion. He promised to seek recognition of Québec as a distinct society and to allow Québec a veto over constitutional amendments. His promises helped defeat the Separatists. The outcome was a very narrow victory for those opposed to the referendum, 50.6 percent to 49.4 percent. Chrétien had hoped for a decisive result that would put the issue to rest.

In the spring of 1997 Chrétien called for an election in June to seek a renewal of his government’s mandate (support from the voters). The Liberals were expected to win an easy victory because the opposition was divided; no party had a sufficiently broad national base to defeat the Liberals. The Bloc Québécois was still strong in Québec, and the Reform Party was favored in Alberta and British Columbia. In the campaign, however, the government was attacked from the right—the Reform Party and the Conservative Party—for failing to cut taxes. From the left the New Democratic Party criticized the Liberals for having cut spending on social programs and breaking its promises to eliminate the goods and services tax and to significantly renegotiate NAFTA. Québécois nationalists attacked the Chrétien government for not going far enough to address Québec’s claim to special status, while in western Canada residents blamed the government for making too many concessions to Québec.

Chrétien and the Liberals defended themselves against their critics on the right by arguing that tax cuts would be irresponsible while the government was trying to eliminate the deficit. In response to the criticisms from the left, they argued that the government had to lower the deficit or all of Canada’s social programs would be in jeopardy. Chrétien argued that some cuts to social spending had been necessary and that there was no realistic alternative to the GST. The Liberals won the election but with a reduced majority of 155 seats out of 301.

The Chrétien government’s cuts to social spending hurt the Liberals in the Atlantic provinces. These provinces had the highest unemployment rates and lowest average incomes in the country. The Liberals lost 21 of the 31 seats they had won in Newfoundland and Labrador, New Brunswick, Nova Scotia, and Prince Edward Island in 1993. They also lost 14 seats in the four western provinces, most of them to the Reform Party. The Reform Party won 60 seats in all, the Bloc 44, the NDP 21, and the Conservatives 20 (1 seat went to a candidate not affiliated with a political party).

Second Term

In his second term Chrétien continued to make significant progress in dealing with the government’s deficit. By the 1997-1998 fiscal year, his government reported the first federal government surplus in 23 years. The government predicted that it would accumulate surpluses of nearly C$100 billion over the next five years based on projections of continued steady economic growth. Economic conditions continued to improve, with unemployment falling to less than 9 percent by 1999.

But separatist sentiment remained strong in Québec. In 1998 the Parti Québécois won another term as the provincial government after a campaign in which it promised to hold another referendum on separation “when the conditions are right.” The threat of another referendum continued to occupy Chrétien. In the aftermath of the 1995 referendum, his government had fulfilled a campaign commitment to pass a parliamentary resolution declaring Québec a distinct society. In addition, his government announced its support for a constitutional veto for Québec. Chrétien’s government also promised that in the absence of a formal amendment to the constitution, the government would use its own veto to prevent any change to the constitution that Québec did not approve.

At the same time, the Chrétien government sought to clarify the conditions under which it would deem a future referendum to be legitimate. Chrétien wanted to ensure that if there were another referendum, the question put to voters would be clear in specifying what was proposed and what the rest of Canada would regard as an outcome justifying separation negotiations. In June 2000 he secured the approval of Parliament for the Clarity Act, which declared that the Canadian government would recognize a vote for independence in a referendum only if the referendum asked an unambiguous question and it was approved by a substantial majority of Québec voters. Over the next three years support for separatism gradually declined, and in 2003 the PQ government was defeated by the provincial Liberal Party.

In its second term, the Chrétien government’s foreign policy reaffirmed that while Canada would remain a firm ally of the United States, it would act independently from the United States—pursuing a United Nations-based approach to international issues. Among the more notable differences were Canada’s leading role in negotiating the international treaty banning the use of landmines in 1997 and Canada’s support for the treaty establishing an International Criminal Court in 1998. The United States refused to sign both treaties.