Canada Changes Course

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Mulroney will face far more onerous tasks as Prime Minister. He must revive Canada's sluggish economy, which is still recovering from the country's worst recession since the 1930s. Unemployment stands at 11.2%, compared with 7.5% for the U.S. The Canadian dollar is worth a meager U.S. 77¢, down from U.S. 98¢ in 1975. Mulroney also inherits the task, difficult even in the best of times, of ruling a country whose strong-willed provinces are often at odds with the federal government, and whose people do not share the same language: one of every four Canadians speaks French. Mulroney must also set the tone for his country's relationship−sometimes rewarding, sometimes maddening, always crucial−with the superpower neighbor to the south.

Indeed, the Mulroney victory is of major importance for the U.S. Ottawa and Washington are inextricably linked by a full diplomatic pouch of issues, ranging from acid rain to fishing rights to import quotas for steel. The two countries have the world's largest trading partnership: almost $100 billion in bilateral trade last year, more business than the U.S. did with Japan or any West European nation. American companies have more money directly invested in Canada than in any other foreign country. Canada and the U.S. are more than just neighbors: they share the longest undefended border in the world. As members of NATO, the two nations consult on defense even more frequently than they might. And as Canadians note wryly, their country is all that lies between the U.S. and the Soviet Union, as the missile flies.

During the 15-year reign of Trudeau's Liberals, however, relations between Canada and the U.S. reached a low ebb. Tired of what they considered to be Trudeau's insolence, Reagan Administration officials made little secret of their feelings that either Turner or Mulroney would be an improvement over the former Prime Minister. During the campaign, both candidates spoke of their desire to strengthen bonds between Ottawa and Washington, but Mulroney sounded especially fervent. "Superb relations with the U.S. will be the cornerstone of our foreign policy," he declared. When Mulroney visited Ronald Reagan at the White House in June, the two leaders swapped stories and got along famously. Campaigning in Chicago last week for his own reelection, Reagan telephoned congratulations to Mulroney.

Though Mulroney is committed to warmer ties, U.S. officials will be disappointed if they expect the new Prime Minister to be a Canadian version of Ronald Reagan. Mulroney is what members of his party call a "Red Tory," a pragmatist who favors compromise over ideological combat. During the campaign, he not only vowed to keep his country's extensive net of welfare programs intact, but he also advocated such innovative ideas as paying pensions to homemakers. By and large, Canada's Progressive Conservative Party tends to be several shades more liberal than the U.S. Republican Party, especially on domestic issues. Mulroney describes himself not as a conservative but as "a centrist, open to all discussions."