Who Will Lead the Liberals Now?

As the depth of the LIBERAL defeat was sinking in on the evening of Oct. 14, Michael Ignatieff strolled out to console the party faithful crowded into a basement room below a bar in his suburban Toronto riding. Actually, his crowd didn't need all that much bucking up. Sure, their party had lost 19 seats and collected only 26 per cent of the popular vote, its lowest share ever. But their candidate had held his Etobicoke-Lakeshore constituency, and was now poised to be a top contender for the leadership that everybody knew Stéphane DION would soon have to resign.

Given the moment, Ignatieff might have chosen to unleash a defiant partisan assault on the victorious CONSERVATIVES, or offered the media a preview of the policy vision he would soon be pitching in the race to replace Dion. Instead, the celebrated author and former Harvard professor tried out a new persona: the highbrow grease monkey of Canadian politics. "We have to examine every piece of the great Liberal machine," he told reporters. "We have to put it up on blocks, we have to take the wheels off, we have to empty the oil, look at the gears. The Canadian people have said, 'This isn't working for us.' "

Ignatieff's garage metaphor summed up a widely held conviction among insider Liberals about what really went wrong for them in this fall's campaign - and long before it even began. Many of the party's most influential organizers and elected politicians, including Dion himself, point not to any failure of leadership style, policy vision, or even ideological bent, but rather to nuts-and-bolts organizational deficiencies. In particular, they're looking enviously at the Conservative party's far superior ability to raise money in small increments, month after month, from thousands of determined supporters.

In the coming weeks, Maclean's will explore the post-election challenges facing all of the major parties. For the Liberals, it's all about rebuilding from the ground up, and figuring how to restore themselves to the vaunted status of Canada's natural governing party.

Among Liberals taking a long view, the soul-searching these days has surprisingly little to do with how they first gambled on the improbable Dion as leader, then doubled down on his Green Shift as their platform centrepiece. Instead, they are preoccupied with how the party fell so far behind the Tories, and even the New Democrats, when it comes to the practical art of connecting with rank-and-file members. The leadership contest that will likely culminate at a Liberal convention next May in Vancouver is on; a sweeping platform rethink is inevitable. But many top Liberals insist the real action is resolutely workaday. "My number one priority," says party president Doug Ferguson, "is to change the fundraising culture of the party."

How badly that culture needs changing can be proven with remorseless arithmetic. Last year the Tories raised close to $17 million from 107,492 contributors, leaving the Liberals, who collected just $4.5 million from 23,442 backers, in their dust. The Liberals are, in part, victims of their own 2004 political financing reforms. Even though the party had long relied heavily on corporate donations, along with sizable individual contributions gathered at big fundraising dinners, Jean CHRÉTIEN's government moved to limit businesses to giving $1,000 a year and capped individual donations at $5,000. The Conservative party - especially its grassroots-oriented Reform predecessor - couldn't tap companies as easily. So by necessity they had come to rely mainly on support that flowed in steadily, in smaller increments, from individuals. When HARPER won power, he shrewdly tightened the rules further, banning business and union donations, and limiting individuals to $1,100 a year.

What this meant for Liberals was obvious long before Dion won the leadership in late 2006. At the same tumultuous convention, the party reformed its constitution to allow it to begin the slogging work of catching up with the Tories. The biggest step was to centralize the party membership lists, previously controlled by provincial wings, which sometimes guarded them to give their own fundraising first priority.

Ferguson says the task of creating that national membership list is completed. But Liberals are still squabbling about establishing nationwide rules for joining the party, including a common membership fee. More problematic, according to a senior party official, is the fact that Liberal riding associations are not required, as they are in the Conservative party, to share key information about local supporters - like who takes lawn signs and shows up to meetings - with the party's national database. This sort of detail is considered crucial when it comes to targeting members for direct mail and email appeals.

At his news conference this week, Dion announced unexpectedly that he would stay on as leader until his successor is chosen. He vowed to devote himself to modernizing Liberal fundraising. The party has been in a prolonged "financial crisis," he said, which left it too poor to return fire in early 2007 when the Tories took deadly aim with TV ads portraying him as a weak, vacillating non-leader. "We have to bring our fundraising machinery into the 21st century, or the Liberal party will be at a permanent political disadvantage," Dion said. Ferguson says it's more than a matter of getting on an equal financial footing with the Tories: "We need to engage members who have been feeling disconnected from the party."

The results of the past few month's efforts are not all that encouraging. Last spring the Liberals launched what they called their Victory Fund, a bid to coax party supporters into giving as little as $10 a month through an automatic credit-card deduction. But a party official said only about 1,000 donors are signed up under the program, out of a national membership roll of about 60,000. The technology and the approach seem up-to-date, so what's going wrong? One difficulty could be the way self-defined centrists, who tend to identify with the party, are also temperamentally less fervent than staunch right-wingers, left-wingers, or, for that matter, separatists. "The Bloc, the NDP and the Conservatives operate from a core of ideological support," says Tim Murphy, former chief of staff to prime minister Paul MARTIN. "They're motivated to give no matter what."

Under Harper, the Conservatives have shown they know how to push their members' buttons. The party responds swiftly to events in the news to stir up the anti-establishment spirit of its populist base. Last year, Conservative campaign director Doug Finley sent out a fundraising letter that capitalized on reports alleging a CBC journalist had worked with the Liberals on questions to ask former prime minister Brian Mulroney at a House committee. "Running as a Conservative in Canada is never easy," Finley wrote. "The Liberals have long benefited from the support of the country's most powerful vested interests."

Plausibly appealing to that sort of underdog mentality might get more difficult the longer the Harper government remains in power. Even during a long stretch in opposition, though, it's unlikely the Liberal base would respond to similar appeals. The aggrieved outsider mindset just doesn't fit with the potent mythology of the Big Red Machine, repository of the authentic Canadian identity. That leaves Liberals groping for ideas about how to reclaim their stature as a unifying coast-to-coast institution. Some senior Liberals are urging a serious effort to begin rebuilding in large swaths of the country where the party - now so overwhelmingly concentrated in Toronto, Montreal and Vancouver - has shrivelled to the point of near irrelevance. "If we concede Alberta, rural Saskatchewan and Manitoba, rural Quebec," says Ferguson, "how can we form a government?"

Still, kindling new life for Liberals in those now barren territories is a long-term proposition. Facing a minority Tory government that's unlikely to last longer than three years, Liberals also need to more quickly re-energize their core stalwarts. One time-honoured possibility: stage a high-toned policy confab starring inspiring international thinkers. There's plenty of precedent: Lester B. Pearson's 1960 Kingston Conference, Chrétien's 1991 Aylmer Conference, and, at the provincial party level, the 2001 Niagara Conference that helped pave the way for Dalton MCGUINTY's 2003 election as Ontario premier.

Some Liberals are already musing about holding another ideas gathering soon after a new leader takes over. Even those who don't necessarily see the need for such a conference are beginning the internal debate over policy. Since Dion's emphasis on the environment was widely seen as pulling the party to the left, talk of tacking back toward the centre is prevalent. "We are a party of the centre, not of the left," Ignatieff declared on election night. "When we hold the centre we win from the centre."

Maybe. But even a successful reaffirmation of the party's moderate-middle brand strength likely won't succeed unless it's combined with a patient push to reach out to more party members, more routinely. The Barack Obama campaign's stupendous success in connecting with younger voters over the Internet is an obvious model, even if Obama's personal allure is beyond imitation. "We need to look at tools that don't require massive advertising campaigns," says veteran Liberal strategist Susan Smith. "The next generation of Canadians are looking to be inspired, looking for a vision for their country."

The idea that a whole generation is hungry for Liberal vision might smack of wishful thinking from a party just handed what should have been a humbling defeat. More than that, it reflects a reluctance on the part of some Liberals to narrow their focus and start identifying voters more precisely. The Tories don't hesitate to do just that, doggedly courting, say, suburban women with young children and second-generation Chinese Canadians. "For many Conservatives, it's about pigeonholing people into categories and demographics," Smith says. "Liberals view voters differently - they are not numbers and statistics, they are people."

Yet as they scramble to catch up with Conservative fundraising, some Liberals are also arguing behind the scenes in favour of mimicking Tory polling-based tactics for zeroing in on susceptible voters and winnable seats. Ferguson says he advocates running to win in all 308 ridings. But another veteran Liberal strategist, who asked not to be named, suggested the party should focus on perhaps 125 constituencies, including the 76 it won on Oct. 14. The would mean setting their sights only on a minority next time out - a big comedown for a former powerhouse used to ruling with majorities, but perhaps nothing more than realistic for a cash-strapped political franchise caught in a rebuilding phase.

Maclean's November 3, 2008