A Crisis That Shook the Nation

A Crisis That Shook the Nation

Hushed conversations about politics are nothing new at Toronto's venerable Albany Club. The downtown redoubt of old-style partisan skulduggery even boasts John A. Macdonald as a founding member, back in 1882. The conversations that matter, typically among well-heeled CONSERVATIVES at this oak-panelled incubator of Tory ambitions, usually stay confidential. Occasionally they turn very public, though, like the time Dalton Camp chose the club for a speech launching the revolt that ultimately deposed John DIEFENBAKER as party leader. The latest chapter in the club's lore came in the aftermath of the Oct. 14 federal election, and, for a change, there wasn't a Tory at the table.

A week after Stephen HARPER's triumph, a post-election breakfast panel discussion was held in the club. It brought together two backroom veterans: Brian Topp, who had run Jack LAYTON's NEW DEMOCRAT campaign, and Senator David Smith, the organizer of many LIBERAL campaigns who had worked this time on Stéphane DION's wobbly run. What Smith didn't know was that Topp had served on secret NDP "scenario committees" during the past three federal campaigns that studied potential outcomes, including coalitions. After the most recent campaign, Layton assigned him to put out feelers to Liberals on the possibility of forming a coalition should Harper's government ever look vulnerable.

That morning, Topp and Smith lingered beneath the stained glass windows of the club's main dining room. They traded war stories, Smith's going back to Lester B. PEARSON, Topp's from his days in Saskatchewan working for NDP premier Roy ROMANOW. Topp broached the idea of co-operation. Smith noted that the Liberals were presently preoccupied with their leadership race. But Topp was encouraged enough that he thought their conversation was worth picking up again after the new Liberal leader was chosen in a planned convention in Vancouver in early May.

And that was that, or so it seemed. Topp and Smith couldn't have guessed, of course, that only a month or so later Harper would undertake such a risky move against their parties that the coalition concept they touched on so tentatively would crystallize in just three days of bargaining in Ottawa hotels. They would be back in contact, as part of a flurry of behind-closed-doors bargaining, all against a backdrop of parliamentary crisis. By trying to strip all federal parties of a public subsidy - an audacious frontal attack on his opponents - Harper drove the Liberals, NDP, and even the separatist BLOC QUÉBÉCOIS into each others' arms.

The sudden emergence of a united opposition front, bent on defeating his minority at its first chance, led Harper to make a series of desperate counter-thrusts. He revived the moribund national-unity debate by making the separatist Bloc's support for the coalition his main grounds for attacking it, even accusing Dion on the floor of the HOUSE OF COMMONS of plotting to "destroy the country."

Harper then pushed the country to the brink of a full-blown constitutional crisis by asking Governor General Michaëlle JEAN to suspend PARLIAMENT to prevent the coalition from felling his minority this month. By granting the request, she set a precedent that seems to hand future prime ministers heading besieged minority governments a powerful new tool for delaying being voted down in the House. Finally, after a blur of ploys and stratagems inside the Liberal party, the crisis hastened Dion's exit, ended the race to succeed him, and assured Michael IGNATIEFF's ascension to the party's leadership.

It was a year's worth of political headlines packed into less than two weeks of behind-closed-doors deal-making, parliamentary histrionics, and high-stakes leadership jockeying - plus one lousy video and a timely fall of hailstones. Not since the demise of the MEECH LAKE ACCORD in June 1990 has the nation's political playing board been given such a shake.

HARPER'S GAMBLE

Apart from the Albany Club prelude, the saga began with rumours of nothing more worrisome than a government gambit to make parliamentary perks a focus of its fall economic update. All last month, Finance Minister Jim Flaherty was sending signals that he wasn't ready to announce significant new spending. The annual fall update usually serves as a report on the state of the economy, but sometimes gives governments a chance to push out new tax or spending measures before their next full budget, which typically comes in February.

Without a whole lot to say about steps to confront the world economic crisis, the Tories signalled that they would fill the vacuum with symbolic belt-tightening on Parliament Hill - freezing MPs' salaries, perhaps, and curtailing their expenses.

In hindsight, almost everybody missed what should have been a clear hint that something more dramatic was in store. It came when Harper sent out his communications director, Kory Teneycke, who more often speaks off the record, to do a series of TV interviews laying the groundwork for the update. "There will be much bleating from political parties, but it will hit the government disproportionately," Teneycke warned. "It will be deeper and broader than anyone expects." Yet nobody guessed that he meant that Flaherty was about to announce a proposal to yank away the $1.95 per vote subsidy the federal parties are paid every year, a taxpayer underwriting of party costs that amounts to less than $30 million.

That subsidy was introduced in 2004, part of Jean CHRÉTIEN's landmark reform of political financing. Chrétien eliminated corporate and union donations to parties, and limited personal contributions to $5,000 (Harper later cut the individual limit to $1,000). In return, the parties would gain taxpayer money, doled out in quarterly payments based on the number of votes they received in the last election. For the 12 months that ended last Sept. 30, the Conservatives collected about $10.5 million, the Liberals $8.75 million, the NDP $5 million, and the Bloc $3 million.

But the importance of that public money varies according to the parties' capacity to raise their own funds - and therein lay the problem for Harper's opponents. The Tories' mighty fundraising machine pulled in $19.7 million in the 12 months that ended Sept. 30, the Liberals a paltry $5.7 million. Considering they have a much smaller voter base than the Liberals, the NDP did better, also raising $5.7 million. The Bloc's backers contributed $861,000. So the Tories are the least reliant of any party on the taxpayer support, and what's more, Harper has never liked the concept. And he calculated that Canadians wouldn't like it much either - if they were prompted to think about it. That was a reasonable guess. But why would the government imagine that the opposition parties, who together control a solid majority of House seats, would go along with a brazen bid to cripple their operations?

A Conservative official told Maclean's that a key assumption was that the NDP would side with the Tories, seeing a chance to bankrupt their shared historic adversary - the Grits. Although NDP fundraising is not as robust as the Tories', it's markedly healthier than the Liberals'. "We thought," said the Tory insider, "the NDP would see that the Liberals would be hurt more than them."

The PRIME MINISTER'S OFFICE also assumed that the Liberals, more than five months away from the convention where they would select a new leader, were in no position to bring down the government and force an election. As for banding together with the other opposition parties, Dion had ruled out a coalition with the NDP during the fall campaign, and as the bitter foe of separatists in his home province, few could imagine him coming to terms with the Bloc.

Left to sort out the situation themselves, the Liberals might never have pressed for a coalition. But they didn't have to act first. On the evening of Nov. 26, the night before the economic update, the government leaked news of the plan to strip away the parties' public subsidy, and the NDP quickly contacted Dion's office to open up lines of communication. Layton's schedule for the following morning was cleared.

By the morning of Thursday, Nov. 27, the unintended consequence of the Tory gambit was taking shape. Much of the action originated in Layton's office. He called Dion at around 10 a.m. Topp got back in touch with David Smith. Ed Broadbent, the former NDP leader, reached out to his closest counterpart in the Liberal firmament, Jean Chrétien. NDP strategists expected Chrétien to see the issue in terms of his own legacy. "After all," noted a senior New Democrat official, "he brought in public financing of parties in the first place."

Still, Flaherty's update, which he would deliver in the House at 4 p.m., might make it difficult, or even impossible, for the nascent coalition talks to proceed. Opposition officials expected Flaherty to unveil at least token economic stimulus proposals, spending ideas that might prove popular enough to make it hard for Liberals and New Democrats to reject the whole package. The opposition parties got their answer in a confidential briefing on the update - a "lock-up" in Ottawa parlance - organized for them by Flaherty's officials in Parliament's West Block.

As the NDP, Liberal, and Bloc advisers and MPs in the lock-up pored over the briefing papers, they found none of the sweeteners they had expected. Instead, along with the bombshell plan to remove party financing, they discovered two more incendiary proposals. Flaherty vowed to temporarily take away the right of public sector unions to strike, and remove the right of women claiming they were underpaid compared with men to take their pay-equity complaints to the CANADIAN HUMAN RIGHTS COMMISSION. A senior NDP official said those provisions left no chance the party could vote for the update.

In the House of Commons, Flaherty, the man charged with delivering this package concocted largely in the Prime Minister's Office, stuck to the script. "We cannot ask Canadians to tighten their belts during tougher times without looking in the mirror," he lectured. "There will be no free ride for political parties. There never was. The freight was being paid by the taxpayer. This is the last stop on the route." He wrapped up by vowing he wouldn't be lured into any costly short-term stimulus scheme. "We will address our immediate, external challenges the same way we will reach our longer-term goals," Flaherty said, "by continuing to manage tax dollars wisely, investing strictly in the essentials and focusing on what ultimately matters, the longer-term prosperity of all Canadians."

A veteran of Mike Harris's ideologically charged Ontario Tory government, Flaherty arrived in Ottawa in 2006 with a reputation as a hard-liner, strict on spending, and fiercely partisan. But he quickly gained a reputation as one of the few reliably agreeable figures on Harper's front bench. Unlike, say, attack dogs like Transport Minister John Baird and defensive specialists like Public Safety Minister Peter Van Loan, Flaherty seemed to enjoy the give and take, sometimes even laughing at a good round of heckling. He met conflict with a stereotypically Irish smile.

On Nov. 27, Flaherty apparently figured he'd put in a pretty fair day. He finished up a series of media interviews on his update before 7 p.m., early enough to drop in at Hy's, a steak house and martini bar a short walk off the Hill, for a celebratory drink, just as he had after each of three budgets he'd delivered so far for Harper. "We had heard the coalition talk," a Tory official recalls of the mood that evening, "and thought it was fantasy."

But while Flaherty was following his post-game rituals, the scene he had left behind on Parliament Hill was anything but routine. Typically the opposition parties' finance critics respond to an economic update speech. Dion did not yet see the need to speak for the party, so his finance critic, Scott Brison, responded for the Liberals. Layton, however, decided on the fly to take up half the time allotted to his finance critic, star Montreal MP Thomas Mulcair. And Gilles Duceppe would respond for his Bloc Québécois.

Brison offered a conventional attack on Flaherty, concentrating on economic issues. Duceppe raised the stakes, accusing Harper of "putting his own extreme partisanship before democracy." Invoking a sovereigntist icon, he remembered that René LÉVESQUE had introduced public financing of parties in Quebec. Layton upped the ante further. "We are standing," he said with an air of man who knew more than he was telling, "at a historic moment in this chamber."

SECRET MEETINGS, UNHOLY ALLIANCES

Even before Layton had begun to speak, he had summoned Topp, whose job outside politics is as executive director of the Toronto-based ACTRA union of arts and media workers, to Ottawa. That evening, Layton spoke by phone with both Dion and DUCEPPE. All sides were serious about pushing ahead. Topp arrived in Ottawa late that evening ready to spearhead negotiations.

On Friday morning, the Liberal caucus met, and MPs emerged determined not to allow party financing to become the main point of debate. Fearful that Canadians would see them as self-serving, they agreed to highlight Flaherty's failure to offer stimulative spending. MP Ken Dryden urged a cluster of reporters not to be "fooled" or "distracted" by the party subsidy issue. The Conservatives, however, were working flat out to make opposition greed the defining theme. Speaking to a business crowd of about 300 at a lunch speech to the Economic Club of Toronto, Flaherty vowed to press ahead with ending taxpayer payments to parties. As for economic action, he remained flinty. "I would hope the economy would be strong," he said, "and we won't need to have any additional stimulus into the Canadian economy."

Back in Ottawa, though, the Tory brain trust was figuring out that the coalition was for real. Word that Chrétien and Broadbent were involved leaked out. The opposition parties could realistically hope to defeat Harper's minority, and the Governor General might well decide not to grant him another election so soon after the Oct. 14 vote. Instead, she might ask Dion to try forming a coalition government.

Harper needed time. At a hastily arranged news conference in the House foyer, he called off Monday's scheduled "opposition day," which would have given the Liberals a chance to table a non-confidence motion. He cancelled the so-called ways-and-means motion, a routine follow-up to the economic update also scheduled for Monday, which would have given the opposition a second chance to defeat him. "While we have been working on the economy," he said, "the opposition is working on a backroom deal to reverse the results of the election."

Indeed, the crucial first round of backroom dealing was being conducted in secret at three hotels, each a short walk in a different directions from where Harper spoke. Just east of Parliament Hill, at the iconic Chateau Laurier hotel, the Liberals and Bloc were meeting to see if a deal was possible. Dion sent Johanne Senecal, his chief of staff, and Montreal MP Marlene Jennings, while the Bloc emissaries were Francois Leblanc, a senior aide to Duceppe, and prominent MP Pierre Paquette. Just west of the Hill, at the Marriott, the NDP and Bloc held parallel talks. These discussions had established a crucial starting point: the Bloc was not asking for full partnership in the coalition. In particular, Duceppe wasn't demanding seats at the cabinet table, or insisting on explicit concessions to his sovereigntist agenda.

That cleared the way for the key bargaining to take place between the Liberals and New Democrats. They were meeting at the Sheraton, just south of the Hill. The Liberals sent Herb Metcalfe, a veteran Ottawa consultant and close adviser to Dion, and former finance minister Ralph Goodale. The NDP dispatched Topp and B.C. MP Dawn Black. Sources in both parties say those Friday afternoon talks went remarkably smoothly.

That evening, Topp called his old boss, Roy Romanow, for advice. The two had worked together in Saskatchewan to pull together a NDP coalition with the Liberals in 1989, an arrangement that lasted for four years. In fact, the NDP's experience with provincial coalitions, combined with its slim chances of ever winning a federal election outright, had left the party's insiders surprisingly well-versed in the concept of coalition rule.

A senior NDP official told Maclean's that in each of the 2004, 2006 and 2008 campaigns, Layton set up a "scenarios committee," which studied possible election outcomes - including the chance of forming a coalition. In the last two elections the committee was co-chaired by Topp and party president Anne McGrath, and included Broadbent and former Saskatchewan premier Allan Blakeney. Among the cases they studied were the Romanow-led Saskatchewan coalition, and David Peterson's 1985 Ontario Liberal government, which was kept in power through an accord with the Bob Rae-led provincial NDP. "A bunch of other coalition and accord arrangements were studied," said an NDP offical. "The New Zealand arrangements were quite interesting and we looked at some of the European ones."

Now, Topp, McGrath, Blakeney and Broadbent, who had spent long hours studying the mechanics of hypothetical coalitions, including scenarios in which they partnered the Liberals, were all gathered in Ottawa working on the real thing.

On Saturday they were back at the Sheraton, this time on the 17th floor. The Liberals sent Metcalfe, Senecal, Jennings, and Katie Telford, Dion's deputy chief of staff. They were up to speed, bringing ideas drawn from New Zealand's recent history of durable coalitions. Most of the key points were quickly worked out, using a laptop and a projector so all negotiators could follow the evolution of a text. A key stumbling block: how many seats each party would get in a coalition cabinet?

While the negotiations progressed in secret, Ottawa's political and media circles were aflame with rumours. By now, Conservatives were clearly running scared. In an unprecedented move for the combative Harper, he dispatched Baird to tell the media the Tories would drop the legislation to strip the parties of public financing. "We just don't think it's worth getting into an election on that issue," Baird said.

But by now the opposition parties weren't thinking of forcing an election - they were preparing a coalition ready to step directly into power. "The political financing changes were never the issue," Goodale fired back. "The economy has always been the issue." Baird staked a claim to the democratic high ground: "This is all about trying to overturn the results of the last election campaign."

A tone of stunned disbelief crept into Tory comments, both public and private. In its hunt for information, the Prime Minister's Office even reached out to diehard Liberals. The extent of Tory efforts to get informed, by any means available, would become clear the following day.

Flaherty was back on the hot seat on Sunday. He started the day with a TV interview in which he offered a newly conciliatory tone. Reacting to Liberal, NDP and Bloc taunts about the lack of any real economic plan in his update, he announced that his budget would be tabled on Jan. 27, earlier than ever before. Conservatives also backed away from banning public-sector strikes, a retreat that looked designed to soften NDP determination to defeat them.

That afternoon, Flaherty sounded deflated in a hastily arranged conference call with reporters. After the about-faces on political financing and strikes by government workers, he now wearily added a strong hint that he would bend on fundamental economic policy. Long skeptical about an auto industry bailout, he now sounded resigned to having to deliver one. "We're going to have to deal with the automotive issue," he conceded. "Obviously."

But if Flaherty sounded beaten down, the PMO displayed a bit of its customary no-holds-barred style. That same Sunday, Harper's press secretary, Dimitri Soudas, distributed a recording of an NDP caucus conference call from the day before. It seemed that in circulating instructions for getting on the call, the NDP mistakenly emailed Tory Vancouver Island MP John Duncan, instead of their own Edmonton MP Linda Duncan. The Conservatives took the chance to covertly listen in. They then pounced on an allusion by Layton to "moves" the NDP made "a long time ago" to open up the possibility of co-operating with the Bloc. The Tories accused their rivals of planning to cozy up to the separatists long before the economic update. Outraged NDPers applied a new adjective to the Prime Minister's methods: "Nixonian."

As the eavesdropping affair raged, long strides were being made toward a final coalition pact. On Sunday morning, Topp and Metcalfe met at the restaurant of the Marriott for breakfast and a crucial discussion about cabinet. They agreed that to show restraint it should have only 24 members, plus the prime minister, down from Harper's 38. Metcalfe started off suggesting five NDP portfolios, Topp asked for seven. An hour and a half later, they settled on six. A key point was that the NDP offered to let the finance minister be a Liberal. "The candidates for that office on the Liberal side are well known," said an senior NDP official, "and we can work fine with whoever they ultimately pick."

With cabinet quotas worked out by 10:30 a.m., the afternoon negotiations turned to the coalition's core economic policies. Returning to the second floor of the Sheraton, the NDP and Liberals each brought teams of five. The NDP tabled their proposals, then left the Liberals for a couple of hours to work out their reaction. Then the two groups hashed over details together, with Goodale and Blakeney - two old Saskatchewan politicians who have known each other for decades - often taking the lead. By the time the NDP and Liberals had a deal, the darkness of an early winter's evening had settled on Ottawa.

The Bloc wasn't invited in until about 6 p.m. Duceppe's negotiators agreed to support the coalition for 18 months, long enough to pass a Throne Speech and two budgets, even though the Liberals and NDP hoped to make their joint government last for 30 months. Duceppe said later that the Bloc signed on partly because it broadly favours the coalition's policies to boost support to some industries, including forestry, and introduce new social spending, like help for older workers who lose their jobs.

Nailing down exactly which House votes the Bloc would be committed to supporting the coalition on was more difficult. The Bloc proposed complex terms, then left to let the NDP and Liberals simplify the wording. They looked at the 1985 Ontario accord between Peterson and Rae as a guide, but had to draft new clauses to take into account federal parliamentary rules. The final text wasn't finished until about a half hour after midnight.

Even as the coalition was being born, debate raged inside the Liberal party about who should lead it. That evening, in Toronto's Yorkville district, the party's leadership contenders met for dinner at front-runner Michael Ignatieff's condominium. A veteran Liberal strategist told Maclean's that earlier in the day, Bob Rae and Dominic LeBlanc both seemed open to dropping out in favour of Ignatieff. Talks among the leadership camps were fuelled by a growing sentiment that Dion - a lame-duck leader who had sunk the party to its lowest popular vote share ever in the recent election - couldn't be allowed to serve as prime minister of the coalition government until he handed off to a new Liberal leader in May. But by dinnertime, Rae had decided to stay in the leadership hunt. So the three decided only to make a united show of support for the coalition in Ottawa the following day.

THE 'REAL' HARPER RETURNS

By Monday, Dec. 1, the sense of impending crisis had spread beyond the parliamentary precinct. Both the Conservatives and the Liberals launched fundraising drives, stoking an atmosphere bordering on panic. A Tory plea asked for money so the party could "wage the fight of its life" against "socialists and separatists." A Liberal canvassing email touted the party's aim of putting "partisan politics aside and working with the other parties to form an alternative government to protect Canadian jobs."

Some Tories admitted later that they were deeply demoralized that morning. Ever since he created the new Conservative party in 2003, by orchestrating the unification of the Canadian Alliance and the old Progressive Conservatives, Harper had been revered by his troops as a strategic mastermind. Now, with his provocative economic update in tatters, its main tenets abandoned, his aura of invincibility was gone. "By then it was sinking in that this coalition was a serious thing," said one Tory operative, "and people were a little down."

By 2:15 p.m., the appointed hour for question period, a nearly giddy mood had spread among opposition MPs. Harper entered the House, and his caucus stood to applaud as he walked to his front-bench seat - their salute mockingly joined by several Liberals. Not always a sharp House performer, Dion started off crushingly succinct. "Does the Prime Minister," he asked, "still believe that he enjoys the confidence of this House?"

Harper usually hits back hard when he is pressed, but this day he sounded merely peevish. In one exchange he accused Dion of being "about to play the biggest political game in Canadian history" - almost complimentary coming from as bold a player as Harper. Overall, he was uncharacteristically passive. When Environment Minister Jim Prentice, sometimes touted as a potential successor to Harper, stood to take a question late in the session, the Liberals let loose with cries of "Leader! Leader!"

Yet this question period included one unsettling moment for the Liberals, too. After Bloc and NDP MPs stood with the Liberals to applaud Dion's lead-off question, Liberals appeared confused about what to do when Duceppe's turn came. When he rose, his own caucus gave him the expected standing ovation, as did NDP MPs. Liberals hesitated. Some got up, some didn't. Some looked around nervously. Cheering the Bloc? These were strange days. And shrewder Tories took note.

The next critical act in the unfolding drama took place in the Railway Committee Room. It opens off the Hall of Honour that bisects the Centre Block of Parliament, running between the Peace Tower and the Library of Parliament. Its name derives from the old standing committee on railways, canals and telegraph lines, a powerful force in Ottawa from 1867 to 1965. The coalition partners announced they would hold a ceremonial signing of their pact there at 4:30 p.m., followed by a news conference.

As MPs, political staffers and reporters assembled, the optics of the event about to happen became clear. Under the gaze of the FATHERS OF CONFEDERATION, in the famous group portrait that hangs at the room's south end, a signing table with chairs for three, and another with three microphones for the news conference, were being set up. Asked about how it was going to look to have Duceppe, the separatist, looking like an equal partner in the deal, a Liberal MP shrugged off the concern. Hadn't the Bloc settled in as an accepted part of the federal scene since it rose out of the ashes of Meech Lake in 1990?

Few would have believed that Dion, who came to Ottawa to fight for federalism after the near miss of the 1995 referendum, would ever publicly sign a pact with Duceppe. But Dion cast the creation of the coalition as a matter of necessity, "given the critical situation facing our fellow citizens and the refusal and inability of the Harper government to deal with this crisis." Layton theatrically addressed Harper directly through the TV cameras. "Prime Minister, your government has lost the confidence of the House and it is going to be defeated at the earliest opportunity," he said. "I urge you to accept this gracefully." The interstellar depth of the cold in Harper's eyes, as he watched Layton say these words, can only be imagined.

The coalition agreement didn't offer many openings for attacks on policy. The Liberal carbon tax proposal from the fall campaign was gone. So was the NDP vow to reverse the Tories' corporate tax cuts. The Bloc won no concessions that could be construed as enhancing Quebec's status. But Duceppe's simple presence at the signing was enough to cheer up Tories. "As soon as we saw how it looked," said one Conservative operative, "that put some wind in our sails."

But attacking the coalition as a "deal with the devil," as Flaherty called it, wouldn't keep the Tories in power. Their only obvious opportunity to win time was to ask the Governor General to prorogue Parliament, essentially suspending its sitting, rather than facing certain defeat on a confidence vote. "The government will consider all steps that are reasonable to protect the interests of our country," said Prentice when asked about the prorogation option. Revenue Minister Jean-Pierre Blackburn was blunter about the prospect of the coalition asking Michaëlle Jean for a chance to govern: "It's a kind of coup d'état."

Calling the coalition an illegitimate deal with the separatists, however, raised a problematic bit of recent Tory history. It turned out that Harper had seriously discussed a possible coaliton with the NDP and Bloc back in 2004, when Paul Martin's Liberal minority was in office.

Still, by Tuesday the Tories were pounding relentlessly against what they were now calling "the separatist coalition." By question period, Harper was a changed man from the listless performer of a day before. Yelling and jabbing his finger in the air, he damned the Liberals for communing with separatists. He even threw the sainted Liberal names of Wilfrid LAURIER and Pierre TRUDEAU in Dion's face. And, responding to a question from Layton, he claimed that the troika of coalition leaders had refused to appear with the "Canadian flag behind them" at their Monday signing ceremony.

That was untrue, as many photographs proved, and Dion was enraged. Although he normally only poses the first three questions in QP, the Liberal leader jumped back up after Harper's accusation. "I love this country and I have dedicated my life to Canadian unity," he shouted. Harper, refusing to ease off, shot back: "If the leader of the Liberal party believes in the country, he will walk away from this document and admit it is the worse mistake the Liberal party has ever made in its history."

Government and opposition MPs traded insults. Treasury Board President Vic Toews singled out members of the Liberal front bench and loudly called them "traitors." The cacophony was almost frightening.

After QP, MPs leave the House through their lobbies, narrow rooms that stretch the length of the Commons chamber of either side. They are usually crowded with political staff and MPs who have drifted out of their seats. When Harper walked into the government lobby on Dec. 2, the Tories first cheered, then chanted his name, and finally burst into a raucous rendition of O Canada. The real Harper, who had slipped away from them for a day, was back. Speaking to reporters afterwards, Indian Affairs Minister Chuck Strahl said it was "a fine day to be a parliamentarian."

OUT OF FOCUS

By the following afternoon the opposition, which had been so sure Harper's days were numbered, looked far less sure-footed. Conflicts were creeping into the Liberal and NDP communications strategy regarding their deal with the Bloc. Liberals stressed that the Bloc was merely supporting a coalition of the Liberals and New Democrats, so it was wrong to call Duceppe a coalition partner. Yet NDP strategists had taken to countering the Tory slur "separatist coalition" with the phrase "majority coalition." And to claim a House majority for the coalition, they had to count the Bloc's 49 MPs in with the Liberals' 77 and the NDP's 37, which made it sound a lot like they were coalition partners. (The Tories hold 143 seats.)

Fearful that Harper would move soon to ask Jean to suspend the House, opposition MPs began circulating petition letters declaring to her that they had lost confidence in the Tory government. Ignatieff's signature showed up as the very last one on the Liberal letter, which many took as confirmation of reports that he was at best lukewarm about the coalition.

If he or any other Liberals feared the whole thing might fall apart, their worries only deepened on Wednesday evening. Harper asked for time on the main TV networks to address the nation on the parliamentary crisis. He was widely expected to declare that he would request prorogation from the Governor General, and explain his reasoning. Instead, he merely summed up his allegations against the coalition, repeatedly slamming its "separatist" link, although he used the softer "souverainiste" in the French version.

Harper's performance was solid. Yet his failure to frankly explain why he should be allowed to postpone facing a confidence vote in the House - the bedrock source of a government's democratic legitimacy in the British parliamentary system - seemed evasive. News that he planned to visit Jean the next morning was delivered by officials rather than from the Prime Minister's own mouth. But Harper would not have to face much criticism. Dion's video rebuttal saw to that.

The Liberal leader had promised to deliver taped messages in French and English to the networks by 6:30 p.m. By the time his tape was dropped off, more than 30 minutes late, CTV's main network had returned to regular programming. It would have been far better for the Liberals if all the networks had lost their patience.

On the tape, Dion's face loomed up out-of-focus and strangely framed. Observers variously speculated on whether the Liberals shot it with a cellphone camera or the webcam on Dion's laptop. Liberals familiar with the fiasco said Dion and his staff agonized so long over his text that their video technicians had little time to set up a proper shot and no time to fix mistakes. It might have been nothing more than a technical botch-up, but the debacle reinforced Dion's image as a bungler. It prompted some Liberals to recall how Dion's speech at the Montreal convention where he won the party leadership ran over the allowed time, and organizers cut off his microphone. Versions of what went wrong this time vary, but blame fell squarely on Dion. "He permits and insists on unwieldy processes," said one exasperated Liberal organizer.

PARLIAMENT UNPLUGGED

The next morning, the Prime Minister arrived promptly at 9:30 a.m. for his historic meeting with the Governor General. Stepping out of his car, he waved to reporters, assembled 70 metres away, before entering RIDEAU HALL through a side door. Down the driveway, at the entrance to the estate, a cluster of demonstrators gathered to show their support for Harper waved handmade placards. It looked spontaneous enough, but reporters identified several paid Tory staffers in the group.

The meeting lasted 2½ hours. Harper and Jean talked with only two other officials present: Kevin Lynch, the country's top bureaucrat as clerk of the Privy Council, and Jean's closest aide, Sheila-Marie Cook, whose title is secretary to the Governor General and herald chancellor. The Globe and Mail reported that Jean left the room once to confer with constitutional lawyer Peter Hogg. Maclean's has learned the Hogg, author of the definitive Constitutional Law of Canada and professor emeritus of York University's Osgoode Hall Law School, was called in by Rideau Hall to serve as Jean's adviser several days earlier, as soon as the first speculation began swirling that Harper would try to avoid facing a confidence vote.

Hogg's expertise, and Jean's poise under pressure, would be severely tested. The situation was unprecedented. The closest thing to it was the so-called King-Byng Affair of 1926, when governor general Lord Byng refused prime minister William Lyon Mackenzie King's request to dissolve Parliament for an election when his own minority, which had relied on support from the Progressives, couldn't govern on. Byng instead allowed Conservative leader Arthur Meighen a chance to form a government. It was short-lived, and King won the ensuing election. According to University of Toronto law professor Ed Morgan, the lesson of the King-Byng Affair is mixed: Byng was right to give Meighen his chance, but King's subsequent election win proved voters didn't appreciate having a government foisted on them by an appointed governor general's decision.

Jean chose not to be another Byng: she granted Harper's request. Parliament would be shut down until Jan. 26, the day before the Conservatives promised to table their budget. Harper emerged, walking down the steps of Rideau Hall in a long, black coat and maroon scarf. It had begun to snow just before he arrived at the podium. As he spoke, the flakes gave way to pellets of hail, which bounced off his shoulders and collected in his hair. Gusts of wind rumbled over his microphone. "Obviously," he said, "we have to do some trust-building here on both sides." The previous day he had accused Dion of planning "to destroy this country."

Dion responded by saying only a "monumental change" in Tory economic policy would stop the coalition from felling the government in late January. "Warm sentiments are not enough," Dion said of Harper. "His behaviour must change." Did this mean Liberals were no longer bent on voting down the Tories as soon as possible? NDP Leader Jack Layton darkly predicted Harper would unleash "seven weeks of propaganda" to try to build enough public support to survive. Even after Harper pledged to work with his opponents, Heritage Minister James Moore told Maclean's the Tories had no intention of scaling back their barrage of rallies, radio call-in show blitzes, and Internet agitation. "It allows a lot of Canadians who are frustrated to express themselves," he said.

After Jean gave Harper his prorogation, Liberals held a tense caucus meeting on Parliament Hill. Reports filtered out that Rae spoke as the main champion of the coalition, while Ignatieff silenced the assembled MPs and senators by grimly warning them that the party is in no condition to risk forcing an election early in 2009. What if the opposition parties vote down the Tories in late January, but Jean passes over their coalition in favour of an election? Rae was more uplifting, said one MP, but Ignatieff had a point.

After the caucus meeting, Liberal MP Jim Karygiannis hammered Dion. "Unfortunately, Mr. Dion didn't do so good in the last election. We bombed," Karygiannis said. "And he didn't do so good last night. And we bombed again." Rae saved his attack for Harper, labelling him "a man who is afraid to show up for work." Ignatieff, Dion's most likely successor, wouldn't be lured into any criticism of the leader. "The questions of leadership," he said, "are not of the hour."

The hour arrived the very next day. In a Friday television interview, Ignatieff admitted what Liberal MPs had been saying privately since Dion's Wednesday video embarrassment. "What the party is discussing," he said, "is whether there are ways in which the leadership race can be accelerated in such a way that we can present clear alternatives to the country." The next morning's Globe and Mail carried a stinging guest column by John Manley calling for Dion's early exit. "His weakness probably fuelled the Conservative hubris that led to this fiasco in the first place," the former Liberal deputy prime minister wrote.

Tories staged 21 rallies across Canada against the coalition that day. "We have a right to protest," said Moore. "And the reality is that what Stéphane Dion did this past week has angered a lot of Canadians." A spate of polls showed the Tories getting a solid bounce out of the crisis, and scant public appetite for the coalition. A Harris-Decima poll this week found that nearly 70 per cent wanted Harper's Conservatives to stay in power, nearly double the 37.7 per cent of the popular vote the Tories won in the Oct. 14 election.

SORTING THROUGH THE WRECKAGE

Back at work in Ottawa on Monday, even with the House silenced, Liberals braced for what would be a head-spinning day of leadership developments. After a weekend of intense pressure, Dion announced by email that he would resign whenever the party chose a new leader. Dominic LeBlanc quit to clear the way for Ignatieff to immediately succeed Dion. "The Liberal party owes itself and the Canadian people a new leader, a permanent leader, a leader able to make the necessary decisions and needed judgments leading to the budget vote and beyond," said LeBlanc.

That left Bob Rae, one of Ignatieff's oldest friends, as his last standing rival. Rae agreed on Sunday that the party shouldn't wait until May to choose a leader, but he insisted the party members should be allowed to vote before, perhaps through some sort of Internet balloting. It was Rae's last chance: Ignatieff dominated among the party's elite, making Rae's only hope an appeal to the rank-and-file. The party executive rejected his pleas for a wide-open vote, announcing on Tuesday this week that only MPs, senators, defeated candidates and party officials would be consulted.

Rae gave up a few hours later, gracefully offering Ignatieff his full support. His bowing out capped a two-week swirl that even the most seasoned political veterans couldn't have foreseen. What comes next is no more obvious. The coalition forged in those hotel rooms might yet resist centrifugal forces, and cling together long enough to defeat Harper at the end of January. But Liberal sources said Ignatieff is deeply suspicious of the arrangement. Even if he sticks tentatively with the coalition, Harper might craft a budget by late next month that's too appealing to vote down.

Whatever the outcome, the parties and their leaders all look different now. Harper survived into 2009 only through improvisation, occasional demagoguery, and constitutional brinksmanship. His reputation for strategic savvy is permanently damaged, as might be his party's prospects among Quebecers who don't view the Bloc as fair game for demonization. He still has only a minority, and now faces opposition leaders who distrust and dislike him, and long to humble him, more than ever. His advantage in facing Dion, a lame duck, is suddenly lost. Ignatieff might be tougher.

Layton's long-standing behind-the-scenes interest in coalitions and co-operation with other parties is now out in the open. That will make it hard for him to claim in any future campaign, as he did in the last one, that he's really "running for prime minister." The distinction between New Democrat and Liberal aims is clouded, perhaps diluting the NDP brand.

As for Ignatieff, he now takes over the Liberal helm, not after a bracing victory in a conventional leadership race, but through a rushed process that didn't allow normal democratic input from his party's members. He will have to struggle to validate his claim on the party's heart.

If much is left to be sorted out about what just transpired, it's clear that there was no winner. Any political advantage flowing from the crisis of late November 2008 will be measured only in terms of who manages to recover fastest.

Maclean's December 29, 2008