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A Minority Government - Implications for Business

By Michael Teeter, Principal, June 11, 2004

How the new Minority Government will work!

Canadians have not experienced a minority government in Canada since the Joe Clark government of 1979-80. 25 years later, we are poised to experience another one; a possible outcome where Liberal and Conservative representation is so close that either party may be in a position to form the government.

Back in 1979-80, Hillwatch Principals Teeter and Proudfoot were working on the Hill, on opposite sides of the House.  If your memory goes back that far, 1979 to 1980 marked a fascinating period in Canadian electoral history: 2 elections within a 13 month period and a 9 month Progressive Conservative Joe Clark government. We remember the period well. Here are some things to know about a Minority Government.

Only the Governor General Knows For Sure:

While the 1979 Clark government was clearly destined to form a government with 136 seats to a Liberal 114 seats, current polls indicate a much closer spread. Ultimately, when the seat allocations are extremely close, it is up to the Governor General to sanction or decide which party should form the government. The key question for the GG is: which party will have the confidence of the House of Commons? Who forms the government could be decided by the Opposition party with sufficient representation to support one of the two leading parties.  Polls seem to indicate that, in a very close minority situation, only the Bloc Quebecois (BQ) would have sufficient numbers to sustain a government in power.

The Party that Props-Up has Significant Influence:

Obviously, the party that is "propping up" would demand policy concessions in return for this support. BQ support would suggest policy outcomes such as "devolution" to the provinces, enhanced provincial rights, and socially active policies.

Political Leverage over Administration and Cabinet Decision-Making can be Significant: 

Business knows that many important decisions affecting business outcomes are made at the "official" and Cabinet levels. Given that a minority administration cannot get approval for its legislative or budgetary commitments without Parliamentary authority, a minority situation affords the opportunity to seek decision-making leverage from individual MPs and MPs from parties other than the party in power. In a minority government, events that would merely embarrass a majority government can be life threatening. Irrespective of the long-term benefits, the short-term costs of every decision will be weighed more heavily. And groups that successfully negotiate an understanding with officials and ministers in private may find their deals renegotiated when they get to the Commons.

In a majority context, moral suasion can be exercised by individual MPs, particularly from within the governing party and its regional caucus groupings.  In a minority context, individual MPs can demand and receive decision-making power and influence over decisions that would otherwise be outside their purview.  It is incumbent upon the business advocate to pick his "champions" carefully, and educate these champions to assist with beneficial outcomes. An individual MP can be a powerful advocate in a minority government.

The "Democratic Deficit":

A minority government has a way of erasing the democratic deficit in a matter of hours. Government survival depends on the support of individual Members of Parliament, even those from opposing sides of the House. Beyond that, a Liberal government is committed to more free votes and more policy-making influence from Parliamentarians and Parliamentary Committees, including swearing in opposition members, Parliamentary Secretaries and committee chairs (as Privy Councillors) for the purpose of confidential briefings and more open dialogue.

The Conservative platform suggests a Conservative government would go further. Only money votes would be whipped (or forced voting along party lines); all other votes would be free votes. A Conservative government would begin the process of holding elections for Senate appointments. Over time, one can imagine that only elected Senators would be considered legitimate. 

We would also note that in a minority government situation, Senators elected or otherwise will catch the liberated spirit of the Commons and be more inclined to flex their existing legislative muscles, which are not inconsiderable when used with adroitness and persistence.

Governing without Parliament:

In the early stages of a minority government, the new administration will attempt to go as long as possible before holding confidence votes in Parliament. During this period, the Prime Minister and his supporting administration appoint the Cabinet and prepare the policy and legislative agenda. Given the need to have support from at least one opposition party, to support legislation and approve expenditures and budgets, the legislative and policy agendas will have to be discussed and coordinated with opposition policies, or risk losing a confidence vote in Parliament. It is not inconceivable that a government could govern (through Cabinet decision-making) for up to 6 months before recalling Parliament and placing decisions before it.

Election Readiness and the Party Apparatus:

Given the need to be ready to go back to the polls at a moment's notice (should the government fall in a confidence vote), it is very important for politicians to stay close to party officials and the party machinery. (A majority government can essentially ignore the Party between elections.)  Lines of communication between the Party and the political leadership must be good and new channels of influence can arise.

Selling an Idea or Concept to Government:

It is a fact that the most activist governments are sometimes minority governments. As decision-making is vested more in the hands of elected officials and less in the hands of bureaucrats, new (and sometimes innovative) ideas can find their way into government policy and legislation. A new approach or idea can more easily find life or traction through a Parliamentarian proponent as through a policy framework that has been created, vetted and revised through bureaucratic consultation processes and a myriad of bureaucratic reviews and rewrites.

Implications for Business:

Minority Governments can be surprisingly energetic. They present both risks and opportunities.   They give business advocates new opportunities to influence outcomes, even those typically driven and decided at the Cabinet table. Individual Members of Parliament, from all sides of the House, can be key to voting outcomes and the continuing power of the minority government. Grassroots campaigns have greater potential impact. Even where regulatory, expenditure or policy decisions are made outside the direct purview of Parliament; a skilled advocate can mobilize allies in Parliament to seek leverage in support of beneficial outcomes.

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