Canada Changes Course

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Mulroney's life revolves around politics so much that his closest friends, most of them college and law-school chums, tend also to be his most trusted advisers. An early riser, he scans half a dozen newspapers a day, including the New York Times. Though he radiates a hearty amiability, Mulroney rarely wastes a minute; if he is delayed somewhere, he pulls out a book and starts reading. (He prefers biographies, especially volumes on John Kennedy.) For relaxation, Mulroney favors a fast-paced set of tennis. Once an avid golfer, he rarely plays now because the game takes too long. When time permits, he relishes fishing trips to Labrador and skiing in the Laurentian Mountains.

Once he takes office, Mulroney's first priority will be to create more jobs, especially for the country's half a million unemployed young people. During the campaign, he proposed tax credits for employers who hire and train youths. He also recommended grants of up to $20,000 to young entrepreneurs who want to start their own companies. The Prime Minister's efforts, however, will be hampered by Canada's persistently high interest rates, now at 13%, and by an apparent pause in the country's recovery from the recession. Mulroney has already backed away from his earlier promises to eliminate the Canadian budget deficit by 1990. Indeed, he has acknowledged that his campaign pledges, including a $200 million hike in health and welfare spending, will cost an additional $3 billion over the next two years. Mulroney plans to cover the higher expenses partly by imposing a minimum income tax on the wealthy.

To a large extent, Canada's economic woes resulted from a whirlwind of outside forces that hit the country in the early 1980s: a drop in energy prices, a turndown in world trade, lofty U.S. interest rates. Yet the Trudeau government cannot escape blame. The Liberals overestimated the revenues that would flow from the country's oil holdings. Through legislation and attitude, Trudeau's men undercut the confidence of businessmen at home and investors from abroad. Finally, Trudeau himself had no patience for the nitty-gritty of economic management, preferring to leave the details to others. By contrast, Mulroney is certain to immerse himself in his government's economic policies.

The traditional friction between the federal government and the provinces is also likely to ease. Mulroney does not share Trudeau's confrontational style in such dealings, and seven of the ten provincial premiers are fellow Tories. The new Prime Minister has not offered any specifics on how he will deal with regional grievances, especially the continuing squabble between the energy-rich west and the energy-hungry east over oil pricing and supply. But he has set a conciliatory tone by promising to hold an early economic summit with the premiers.