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Pierre Trudeau may have asked business leader to move jobs from Quebec, says U.S. State Department document

A once-secret U.S. State Department document suggests that former Prime Minister Pierre Trudeau may have asked one of Quebec’s top business leaders to “make it as tough as possible” for the newly elected Parti Québécois government in 1976 and to quietly move jobs out of the province.

In a telegram dated Dec. 22, 1976 — little more than a month after René Lévesque’s sovereignist Parti Québécois stunned the rest of Canada by sweeping into power — U.S. Ambassador Thomas Enders updated the State Department on the debate behind the scenes within Pierre Trudeau’s government. He said Trudeau might be considering a more aggressive approach to dealing with the fledgling PQ government.

“Despite what cabinet ministers say, Trudeau may still be emitting punitive signals on the Quebec economy,” Enders wrote in a telegram that was classified “secret” and restricted to “exdis” or exclusive distribution.

“Paul Desmarais, Power Corporation chairman, Trudeau’s main business supporter and the Premier French Canadian businessman, tells me that Trudeau is suggesting that he ‘make it as tough as possible’ for Quebec,” the telegram continued.

“Desmarais, whose companies employ 48,000 in Quebec, thinks Trudeau wants him to leave organizational structures in the Province intact, but reprogram to the rest of Canada as many operations and investments as possible. Idea would be to set up spurt of provincial unemployment rate from current 10 per cent to 15 or even 20 next year.”

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Jean-Francois Lisee, author and former PQ leader, said the document is a bombshell that shows how far Pierre Trudeau was willing to go to counter Réné Lévesque’s government. (Paul Chiasson/Canadian Press)

According to the telegram, Desmarais wasn’t the only businessman who talked with Enders.

“Canadian Pacific chairman Ian Sinclair, who is the country’s most influential businessman and who has also contacted Trudeau for guidance, tells me he didn’t get a pull-out signal but got no encouragement to hang in,” the telegram said.

A month earlier, on Nov. 18, 1976, Enders sent a telegram to the State Department outlining a 40-minute talk he had with Trudeau about tactics in the wake of the Quebec provincial election. In it, Enders said Trudeau told him that while focusing the political debate on Ottawa would unite the PQ, economic issues could divide it.

“If ever the Quebec government could be set up to make decisions on ownership of industry and resources, social benefits, employee and employer rights, it will come under severe internal tension,” Enders wrote.

“Trudeau noted that these effects of tension would be magnified by the need to come to terms with foreign investors. He agreed that investors should not take any precipitate action either to pull out of or invest in Quebec, but rather should adopt a waiting stance while making clear to the new government that they wish assurances about their future in the province.”

The telegrams are among several documents recently republished by the U.S. State Department’s Office of the Historian as part of its Foreign Relations of the United States series.

The documents were declassified several years ago.

‘A bombshell’

Enders, a career diplomat who served as ambassador to Canada from 1976 to 1979, died in 1996. Trudeau died in 2000 and Desmarais passed away in 2013.

Jean-François Lisée, a journalist and author who went on to lead the PQ from 2016 to 2018, obtained thousands of U.S. government documents about Quebec’s sovereignty movement for his 1990 award-winning book In the Eye of the Eagle (Dans l’oeil de l’Aigle). He describes the telegram from Enders as “a bombshell.”

“That’s major news. We never had any news of that,” said Lisée, adding that the telegrams agreed with other documents he obtained for his book.

“It’s not clear how far that went and how effective it was, but this temptation of sabotaging part of the Quebec economy seemed to have been part of the strategy at the very outset,” he added.

“This is the first not only proof but direct testimony we have from a major player, Mr. Desmarais, to an unimpeachable source, Mr. Enders, that that was in play.”

Lisée said the documents show that Pierre Trudeau was willing to go outside the normal bounds of democratic debate to counter the sovereignist movement. He compared it to the RCMP spying on the Parti Québécois and party leader René Lévesque.

But Marc Lalonde — who was a key member of Trudeau’s cabinet at the time — called into question Enders’ account of his conversation with Desmarais, saying it contradicted what cabinet members were telling business leaders at the time.

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The late Paul Desmarais. In the December 1976 telegram, Enders says Desmarais told him Pierre Trudeau suggested he make things difficult for the new PQ government. (Shaun Best/Reuters)

“The statement about Mr. Desmarais, I don’t think represents what his understanding was at the time,” said Lalonde. “If he understood what the ambassador reports, then there has been a misunderstanding in the transmission of the information somehow, because I spoke to Mr. Desmarais myself repeatedly during this period.”

Lalonde said there was “great concern in the Quebec business community and fear of investing” at the time and the government told businesses it would understand if they chose to make new investments outside Quebec.

“Our purpose was not to encourage disinvesting,” he said.

Lalonde said Quebec went through tough economic times after the 1970 October crisis. He said the Trudeau government didn’t want another economic crisis that would force it to spend large amounts of money to bolster the province’s economy.

Stéphane Lemay, vice-president of Power Corporation, said he couldn’t comment on the document and the reference to Desmarais “as it relates to an alleged conversation between two persons who have since passed away.”

Lemay said Desmarais didn’t cut jobs in Quebec during that period.

“The actions of Mr. Desmarais and the Power Group of companies, during all the relevant years, do not at all support the theory which is put forward in the document,” he wrote in an e-mailed response to CBC News. “Power did not move jobs, operations or facilities out of Quebec during that period.

“In fact, following the election of the Parti Québécois in 1976, Mr. Desmarais was encouraging business leaders to maintain their activities in Montreal and the province of Quebec.”

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Graham Fraser, a senior fellow at the University of Ottawa and author of a book on the Parti Québecois’ early years in power, said the federal government discussed various options for dealing with the PQ government. (Kate McKenna/CBC)

Prime Minister Justin Trudeau’s office declined to comment.

Graham Fraser is a senior fellow at the University of Ottawa and author of PQ: René Lévesque and the Parti Québécois in Power. He said that while the passage related to Desmarais came as news to him, it dates from a time when Pierre Trudeau’s government — which had been caught off guard by the PQ win — was debating how to react.

“I think there would be a recognition that [at] that particular moment in time, December 1976, all kinds of ideas were flying around and the fact that this idea was thrown out — all kinds of other ideas were thrown out too,” Fraser said.

Fraser said he also was struck by one of the other documents recently published: a memorandum of a conversation between Pierre Trudeau and Enders during their first meeting in March 1976 that also was classified as secret.

Fraser said it was clear that the two men “hit it off.”

“It was a conversation in which they covered a whole range of Canada-U.S. issues in which they were quite undiplomatic in a way … going well beyond their respective mandates to talk quite theoretically and hypothetically about what governments could do or should do or might do,” he said.

That memo — which was marked “Nodis”  for “no distribution” — paints a picture of a cozy relationship between Trudeau and Enders. After debating ideas, they agreed to continue to talk in the future and to “conceptualize” together, although Trudeau asked Enders not to share that with his cabinet ministers.

“For heaven’s sake, don’t tell them that we’ve been conceptualizing together,” Trudeau says in the transcript.

A day later, Enders sent a telegram describing his impression of Prime Minister Pierre Trudeau:

“Trudeau was as advertised: elegant, contrary, brittle, unable to resist intellectualizing, preoccupied with Galbraithian thoughts that few in Canada share with him. He was also very friendly.”

Elizabeth Thompson can be reached at elizabeth.thompson@cbc.ca

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