Non en Quebec
Joe Clark's first year as Prime Minister was a time of broad hardship as his young Premiership was met with the worst economy since the 1930s depression. Canada's unemployment rate, inflation levels and interest rates were markedly higher than those to its immediate south, and Clark engaged in an ambitious policy mix of short-term tax cuts, interest rate hikes, Keynesian spending and privatizations to try to spur the economy. First and foremost was his dismantling of Petro-Canada, a core demand of his Albertan base; next was a two-year reduction in the payroll tax and a three-year reduction in the income tax, to spur consumer consumption while also injecting billions of dollars into road projects (financed with a three-cent gasoline tax)
[1], creating a bankruptcy protection fund for businesses of a certain size or that operated in more than one province, privatizing 30 of the 61 crown corporations (most prominently flag carrier Air Canada), and pursuing interest rate hikes considerably more aggressive than those in the United States. It was a curious mix of austerity and stimulus; Canadian economists to this day debate its efficacy, and by the one-year anniversary of his Premiership Clark's approvals had fallen so low the PCs would have been likely to be wiped out had an election been called. Indeed, knives came out for Clark in some more right-wing corners of the party, but his Premiership was saved by a confluence of factors and he would soon limp on.
The first was the election of former Finance Minister Donald S. Macdonald as Liberal leader in February of 1980. Macdonald was, compared to his fiery and charismatic predecessor Trudeau, an utter dud during Prime Minister's Questions and his position in support of free trade with the United States left him out of step with not only the Liberal base but many protectionist and nationalist swing voters worried about Canadian industry being overrun by American imports (Clark himself was quietly interested in the economic benefits of better trade relations with the US but was to Macdonald's left on this issue). Macdonald's victory in the 1980 leadership review had largely been on the back of his "economic competence" and that it was the "turn" of Ontario to have a Liberal leader. This, too, would have an effect as Quebec soon thereafter went to the polls on May 20 to vote on sovereignty-association with the rest of Canada - in other words, independence. The governing
Parti Quebecois, swept into power in 1976 in a font of sovereigntists fervor and frustration with the governing Liberals both provincially and federally, had waited until Trudeau had exited power to call its long-promised referendum, with leader Rene Levesque - a moderate compared to hardliners like Jacques Parizeau, who found the question in the plebiscite too academic and unwieldy - not wanting to have to campaign against the electric "PET." Sound as this stratagem may have been, it surprisingly backfired. First and foremost, Trudeau was as much a lightning rod for his opponents as his supporters; much as Quebecois may not have liked "Albertan oilmen" such as Clark, it was hard to polarize the electorate against the Tories who had pledged and delivered on a less statist and firm hand in constitutional matters, as well as the dry but inoffensive Macdonald. The "Oui" campaign thus fell behind the "Non" camp led by Claude Ryan, which ran it as a traditional political campaign, while the sovereigntists dove into more esoteric activism. Key officials made offensive remarks about women, Parizeau gave a disastrous CTV interview where he could not keep his facts straight on economics, and what, exactly, sovereignty "looked like" was esoteric. Swing voters, already despondent in a bleak economy, did not bite - "Non" won 71-29, a considerably broader margin than projected ahead of time, and Quebecois separatism was, for now, almost entirely dead, bookending a decade that had begun with the kidnappings by the FLQ that triggered the October Crisis.
Clark, in quietly but firmly refusing to indulge the referendum, showing sympathy for provincial frustrations and standing up for a federal Canada, had won a major victory, and the Tories could reasonably claim to be the party of moderate provincial-federal mutually beneficial relations, unlike (in their view) the antagonistic Trudeau years. In a message after the successful defeat in Quebec, with Macdonald nowhere to be seen, Clark chipperly announced, "Though times are very hard, Canada endures, and will continue to endure, and a brighter future lies ahead!"
[1] OTL's was four cents
