Since May 26, three ministers have lost their jobs. Defense Minister Art Eggleton and Public Works Minister Don Boudrias were forced out of their posts after being accused of favoritism in the wake of a series of scandals around a sponsorship program.

A week later, as more facts seemed to indicate that the revelations at the source of these scandals were coming from inside the Liberal Party itself, Chrétien fired Finance Minister Paul Martin. Widely recognized as the second-in-command in the Canadian government, Martin is considered the front-runner in the race to replace Chrétien as head of the Liberals and become the next prime minister.

Deeply divided, the Liberal Party is now heading toward a leadership "review" where support for Chrétien will be put to a vote.

The Liberal Party is today the only capitalist party in Canada with a strong base both inside and outside Quebec. It won three elections since 1993. Even after weeks of being on the defensive around the publicity contracts, it remains at close to 50 percent in the polls, more than three times stronger than any other party in Canada.

The bipartisan political system that has dominated political life for most of the years since the creation of Canada in 1867 shattered a decade ago when the Conservative Party suffered a devastating electoral loss, almost eliminating it from Parliament. This was accompanied by a regional fragmentation of bourgeois politics, with the right-wing Canadian Alliance, the official opposition, being present exclusively in Western Canada, and the Bloc Quebecois, the third party in Parliament, existing only in Quebec.

Today, tensions in the ruling class more and more find their expression inside the Liberal Party itself.

The media is trying to reduce the crisis to a "personality conflict" between Chrétien and Martin. But more facts are coming to the surface indicating that political questions underlie the tensions between the two main factions inside the party. At the source of the current crisis are how best to push forward the assault on working people in face of resistance to austerity cutbacks on the provincial level, and the question of Quebec.

A decade ago Chrétien defeated Martin by a small margin for the party leadership. Their contest was centered on the question of how to deal with Quebec. Martin was then supporting the Meech Lake Agreement, portrayed as containing a few concessions to the rights of the Quebecois.

Chrétien and Martin have "always disagreed about the government’s policies toward Quebec," said Richard Gwyn, a Toronto Star columnist, June 5. "To Chrétien, Martin had always been too much the accomodationist...towards Quebec," he wrote, while Martin was "always much readier to at least consider...concessions."

Chrétien and Martin also disagreed on the so-called Clarity Bill, the main piece of Ottawa’s response to its quasi-defeat in the referendum. This law defines the type of questions that the Quebec government would need to raise if it was to hold another referendum. It imposes a minimum percentage vote that would be required for Ottawa to recognize a victory of the Quebec government in the referendum.

"The success of the Clarity Bill represented the single greatest personal success of Chrétien during his term as prime minister.... Chrétien thus had won his lifelong jihad against separatism," said Gwyn in his article.  
 
Quebec remains a key question
The conflict between those supporting the hard line against Quebec, and those who favor minor concessions, has been at the center of politics in Canada since the 1960s. It remains a key question, essentially because nothing has been settled from the point of view of Canada’s capitalist rulers.

While not as central, the scandals surrounding Ottawa’s sponsorship program that precipitated the current crisis are also revealing.

Ottawa used the program to raise the presence of the Canadian flag and Canadian symbols in Quebec by sponsoring sporting, cultural, and other events. Between 1998 and 2000, Public Works Canada sponsored 555 such events in Quebec, compared to 43 in Western Canada and 82 in Ontario. In one typical case Ottawa gave $333,000 to sponsor a hunting and fishing show that never took place. The show was organized by a company that received 17 percent of the $232 million given by Ottawa through the sponsorship program since it was started in 1997.

In a letter to the Globe and Mail, Stéphane Dion, Canada’s minister of intergovernmental affairs, defended the publicity campaign, by saying that "Canada will not let itself be driven out of Quebec."

On June 4, Ralph Goodale, the new Public Works Minister, announced that his ministry would spread sponsorship cash more evenly across the country, now that "Quebec’s separatist threat [is] receding."

To reassure themselves, bourgeois politicians and commentators insist today on the current demise of the Parti Quebecois (PQ) in the polls as a sure sign that "separatism is dying." They forget that the drop in popular support for the PQ, the party that had called the referendum in 1995, is a result of its decision to implement Ottawa’s austerity campaign in Quebec.

The PQ’s declining support, however, has not resulted in increased backing for the federalist Quebec Liberal Party (QLP), but instead has boosted a third party, the Action Démocratique du Québec (ADQ). This party tries to maintain a middle road between the PQ and the QLP but has never had more than two members in Quebec’s National Assembly. The ADQ has the advantage of having never been tested in power.

The PQ is experiencing the same fate as other provincial governments that have been responsible for carrying through the rulers’ assault against the working class and farmers. The New Democratic Party government in British Columbia was kicked out of office for pursuing such a course. In Ontario, Conservative Party leader Michael Harris recently resigned after his government was forced to confront the resistance of working people to years of harsh austerity measures. In order to survive politically, his successor is doing everything possible to distance himself from the policies of the previous administration.

Following in the steps of the Ontario government, the British Columbia Liberal government of Gordon Campbell is now confronting the initial stages of a social movement centered on the trade unions, including massive marches in Vancouver and Victoria this year.  
 
Economic expansion
Over the last decade the Canadian economy has performed relatively well for the capitalist rulers. "Canada over the course of the last five or six years has put in place one of the most remarkable economic transformations we have ever seen," said Paul Martin in his first speech after being fired as finance minister.

These high marks were won first and foremost by capitalists in Canada taking advantage of the economic "boom" in the United States during the 1990s, an expansion built on the backs of U.S. working people. Exports from Canada increased sharply during those years, thanks in part to the continuing decline in the value of the Canadian dollar.

During that same period the Canadian economy has become less competitive, with a gap in productivity levels opening even wider between the United States and Canada due to the relative lack of success the Canadian rulers have had in carrying through their drive to lower the standard of living of working people and whittle away at health and safety conditions on the job.

There has been little open debate between the wings of the Liberal Party on cutbacks in education and medical care, or about the antiunion attacks that it is leading on the provincial level, like in British Columbia.  
 
 
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