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Mulroney on the hot seat

The former prime minister testifies about cash he received in paper bags. Tamils occupy a Toronto highway. The Toronto stock exchange is on a tear, on bank strength. Blackberry tycoon battles NHL over Phoenix Coyotes. And plastic bag makers claim cloth bags carry bacteria.

Top News: Canadians spent much of the past two weeks glued to their TVs, watching the long-awaited testimony of former prime minister Brian Mulroney at a judicial inquiry into whether he accepted money from a German lobbyist before leaving office.


Mulroney, who was disparagingly referred to as “Lyin’ Brian” during his nearly nine years in office, won a $2.1 million libel settlement from the Canadian government a decade ago over what became known as the Airbus Affair after the police were unable to prove he took cash from lobbyist Karlheinz Schreiber, who worked for various European interests, notably Airbus Industries, which was trying to sell A320 aircraft to then state-owned Air Canada.


In testimony last week, Mulroney admitted taking money, but denied that it had anything to do with Airbus and, weeping during his testimony, said that he still believes he was wronged by the federal government’s investigation. He has maintained that the payments were for advising foreign leaders to buy armored vehicles from Thyssen industries, a company Schreiber represented, and had nothing to do with Airbus.


Mulroney was willing to own up to at least one mistake. He said if he had it to do all over again, he probably would not have taken cash payments made in a brown paper bag in out-of-the-way hotel rooms. Instead, he insists, he would have asked for a check. While lawyers concede Mulroney might be able to win this legal battle on technical merit, the testimony appears to have done immeasurable harm to his already diminished reputation. Canadian taxpayers were further angered when they discovered they are on the hook for $2 million in fees to Mulroney's legal team, which are guaranteed by parliament.


While the courtroom drama was unfolding in Ottawa, a drama of another sort was boiling over in Toronto. Tamil Canadians took to the streets to get the Canadian government to pressure Sri Lanka not to crush the last remaining Tamil Tigers, the rebel group that had been fighting a three-decade-long civil war.


The pressure had been growing for weeks. Tamil groups (most of whom had bused in from Southern Ontario) had held a series of larger and more boisterous demonstrations on Parliament Hill in Ottawa to get the Harper government to intervene. The government maintained that it viewed the rebel Tigers as a terrorist group and refused to meet with the protesters.


With the end near for Velupillai Prabhakaran and his army, a group of Canadian Tamils and their supporters took over and shut down a portion of the Gardiner Expressway that cuts through downtown Toronto, resulting in a largely unsympathetic reaction by Torontonians.


Given his standing in recent polls, Prime Minister Stephen Harper might have been well served to leave the country and try to make peace in Sri Lanka. Instead, the governing Conservatives chose to launch a series of attack ads aimed at portraying Liberal leader Michael Ignatieff as a selfish, globe-trotting dilettante who would never have returned to Canada were it not for the chance to become prime minister.


The Conservatives used attack ads successfully against Stephane Dion, Ignatieff’s hapless predecessor, but early polling seems to indicate that Harper’s team missed their mark this time. However, knowing that the effectiveness in such advertising lies in their ability to instill long-term doubts about someone, the Liberals took little chance and answered back with a calm retort by Ignatieff and a withering series of ads questioning the governing Tory’s and Harper’s own abilities to manage the economy.


Brian Day, the former head of the Canadian Medical Association, is trying to get out from the spotlight after opponents to Barack Obama’s healthcare reform began airing ads in which Day denounces the single-payer Canadian health system. Day, long an advocate of greater privatization of certain elements of the Canadian system, said his comments, which came in a 40-minute interview and that he believed were for a documentary film, have been taken out of context.


Concern is growing in Canada over a compromise deal to have high-tech enhanced drivers licenses allowed as proof-of-citizenship when crossing the border between Canada and the United States. Ontario Privacy Commissioner Ann Cavoukian says the danger of these cards, which use a low-level radio transmission to pass along information, is that they could be accessed illegally. The large amounts of information that is stored on the cards could facilitate identity theft.  Cavoukian recommended the cards to be reissued with an on/off switch.


Money: May has so far been a banner month on the Toronto Stock Exchange, the second in a row, though no one seems sure why. The index, which hit its lows for the year on March 9 at 7566 points, has been on a tear, climbing to 9497 by May 1 and continued to 10232 this week. Driving the 35 percent run-up are Canadian banks, which are riding a wave of international praise for their more conservative practices and have rebounded sharply from the sell-offs in late 2008. Oil and gas producers, too, have rebounded faster than commodity prices.


However, with the auto sector in chaos, unemployment mounting and real wages falling, Canadian economists expect Canada’s recovery to begin only in late 2009 and to be very slow through 2010.


Elsewhere: What was supposed to have been a banner year in Canadian hockey reached a sudden and dismal end last week with the elimination of the Vancouver Canucks by the Chicago Blackhawks. The Canucks were the only one of the six Canadian teams to reach the second round of the playoffs and, now that they’re gone, fans north of the 49th parallel aren’t sure what to do.  


Indeed, the most interesting material in the sports pages in Canada is the increasingly acrimonious court battle between NHL commissioner Gary Bettman and Blackberry tycoon Jim Balsillie over the bankrupt Phoenix Coyotes. Bettman has staked his career on the success of hockey in the southern U.S. and has twice previously thwarted Balsillie’s efforts to buy a languishing U.S. franchise and move it back to southern Ontario. This time, Balsillie availed himself of U.S. bankruptcy courts, betting a $212 million offer will be enough for the court to give him the rights to the franchise, the main asset of Coyotes.


Instead, the judge, Redfield T. Baum, remanded the whole thing to court-ordered mediation until at least next month, leaving in doubt who will own the Coyotes next season and where they will be playing.


In one of the more pathetic public campaigns in recent memory, Canada’s plastics industry has fought back against the movement to phase out plastic bags at supermarkets with a study that suggests cloth grocery bags harbor dangerous bacteria. The response from consumer groups and even some grocery stores: throw your cloth bags in the laundry from time to time.