Brian Mulroney

The Stanfield-led Progressive Conservatives lost the 1974 election to the Pierre Trudeau-led Liberals, leading to Stanfield's resignation as leader. Mulroney, despite never having run for elected office, entered the contest to replace him. Mulroney and provincial rival Claude Wagner were both seen as potentially able to improve the party's standing in Quebec, which had supported the federal Liberals for decades. Mulroney had played the lead role in recruiting Wagner to the PC party a few years earlier, and the two wound up as rivals for Quebec delegates, most of whom were snared by Wagner, who even blocked Mulroney from becoming a voting delegate at the convention.[2] In the leadership race, Mulroney spent an estimated $500,000, far more than the other candidates, and earned himself the nickname 'Cadillac candidate'. At the 1976 leadership convention, Mulroney placed second on the first ballot behind Wagner. However, his expensive campaign, slick image, lack of parliamentary experience, and vague policy positions did not endear him to many delegates, and he was unable to build upon his base support, being overtaken by eventual winner Joe Clark on the second ballot. Mulroney was the only one of the eleven leadership candidates who did not provide full financial disclosure on his campaign expenses, and his campaign finished deeply in debt.[2]

Despite Mulroney referring to social programs as a "sacred trust" when he was Opposition leader in 1983,[30] he began to reduce expenditures on the programs when he came into office. In terms of old age security, Mulroney's government gradually reduced its benefits at middle income levels and above. The government also reduced the range of workers covered by the benefits from unemployment insurance. In 1990, the government limited cost-sharing under the Canada Assistance Plan in three provinces in response to their concerns that unemployed workers would apply for cost-shared provincial social assistance (as a result of rising unemployment).[31] Mulroney's government cut spending for unemployment insurance; in Spring 1993, the government lowered benefits for unemployed Canadians and eliminated benefits for the unemployed who failed to prove the reason they left their job. Mulroney's government limited baby bonus payments to only lower income Canadians.[32]

In 1985, Mulroney's government introduced a four-year plan to restructure family benefits, in order to combat the government debt and deficit. Starting in 1986, family allowances were partially indexed to the cost of living. For three years from 1986 to 1988, the refundable child tax credits were increased to $549 per year. Starting in 1989, the tax credits were partially indexed in the same manner as family allowances. That same year, as part of the government's program to target social benefits to low or middle income Canadians, universal family allowances ended as high income parents were required to repay all of their benefit at tax-filing time. This system maintained and increased a tax deduction for child care expenses, benefiting high-income families the most. In 1992, the government replaced family allowances with a new Child Tax Benefit that included the family allowance, the Refundable Child Tax Credit, and a non-refundable child tax credit. The new benefit paid a maximum of $85 per month per child up to the age of 18 and was tax-free. It was income-tested on the net family income reported in the preceding year's income tax returns.[33]

Mulroney's government reduced the federal work force by 1 percent each year from 1986 to 1991, resulting in the laying off of 11,000 federal employees. Mulroney's government transferred the costs of universal health care and higher education to the provinces, breaking tradition of the two levels of government splitting the costs. As a result, some provinces had to drop insurance coverage for certain medical procedures and drugs. Mulroney's government eliminated subsidies to government-owned passenger rail and postal services, resulting in the closing of post offices in some small towns and the elimination of certain train routes. The government also introduced fees for forwarding misdirected letters. Under Mulroney, military spending growth was reduced to 1.5 percent per year and foreign aid growth was reduced to 3 percent per year.[32] Mulroney also put spending limits on medicare.[34]

One of Mulroney's priorities was to lower the deficit, which had increased from $667 million under Prime Minister Lester Pearson (1968–69) to $37.2 billion under Trudeau (1984–85). By 1986–87, Mulroney's government cut the deficit to $29.8 billion, and in fiscal years 1988–89 and 1989–90, the deficit was at $29 billion, though it would never decrease beyond that point and the deficit would instead increase, such as in fiscal year 1990–91, where the deficit grew to $33.9 billion. In the Progressive Conservatives' final year in office, the deficit was at $38.5 billion in fiscal year 1993–94, about the same level that it was when Pierre Trudeau left office. As a percent of GDP the deficit was reduced from 8.3 percent to 5.6 percent during his tenure.[35]

The worldwide recession of the early 1990s significantly damaged the government's financial situation. Mulroney's inability to improve the government's finances, as well as his use of tax increases to deal with it, were major factors in alienating the western conservative portion of his power base – this contrasted with his tax cuts earlier as part of his 'pro-business' plan which had increased the deficit. At the same time, the Bank of Canada began to raise interest rates in order to meet a zero inflation target; the experiment was regarded as a failure that exacerbated the effect of the recession in Canada. Annual budget deficits ballooned to record levels, reaching $42 billion in his last year of office. These deficits grew the national debt dangerously close to the psychological benchmark of 100 percent of GDP, further weakening the Canadian dollar and damaging Canada's international credit rating.[36]

Mulroney's government slashed spending, de-indexed personal income tax brackets, and eliminated open corporate tax loopholes. The government also increased taxes on alcohol, tobacco and gasoline.[32] In 1988, Mulroney's government reduced the corporate income tax from 36 percent to 28 percent.[37]

Mulroney's government passed a major tax reform bill, Bill C-139, which was made effective on January 1, 1988. It included reforms for personal and corporate income taxes. The bill expanded the tax base for personal and corporate income; lowered rates applicable to taxable income; supplanted exemptions with credits; and removed certain deductions for personal income tax. The bill replaced the 1987 rate schedule of 10 brackets (with rates ranging from 6 to 34 percent) with a schedule of only three brackets (with rates of 17 percent, 26 percent, and 29 percent). The bill also limited the lifetime capital gains exemption to $100,000; lowered capital cost allowances; established limitations on deductible business expenses; and cut the dividend tax credit.[38]

In August 1989, Mulroney's government announced the introduction of a nine percent national sales tax, the goods and services tax (GST), to replace the hidden 13.5 percent manufacturers sales tax (MST). The government argued the MST damaged the Canadian economy's competitiveness as it only applied to domestically-manufactured goods, as opposed to the new GST which applied to both domestic and imported goods. The GST did not apply to basic groceries, prescription drugs, health and dental care, educational services, day care, and legal aid. Following public backlash, Mulroney's government changed the tax's rate to seven percent. Although the government argued the tax was not a tax increase, but a tax shift, the highly visible nature of the tax was extremely unpopular, and many polls showed that as many as 80 percent of Canadians were opposed to the tax. Two Progressive Conservative MPs from Alberta, David Kilgour and Alex Kindy, left the party in protest of the tax.[39][40][41] The Senate with a Liberal majority refused to pass the GST. Mulroney used Section 26 (the Deadlock Clause), a little known Constitutional provision, allowing him in an emergency situation to ask the Queen to appoint eight new Senators. On September 27, 1990, at the Queen's approval, Mulroney added the eight new Senators, thus giving the Tories their first majority in the Senate in nearly 50 years. In December 1990, the GST was passed in the Senate and was made effective on January 1, 1991. Mulroney's use of an "emergency" clause in the constitution was controversial and contributed to his decline in popularity.[41][42]

Mulroney's government privatized many of Canada's crown corporations. In 1984, the Government of Canada held 61 crown corporations. Under Mulroney, it sold off 23 of them,[43] including Air Canada, which was completely privatized by 1989,[44] although the Air Canada Public Participation Act continued to make certain requirements of the airline.[45] Mulroney's government also privatized Connaught Laboratories in 1984 through two public issues (one in 1984 and one in 1987)[46][47] and Petro-Canada in 1991.[48]

On June 1, 1985, Mulroney's government negotiated the Western Accord on Energy with the governments of the oil-producing provinces. It permitted the full deregulation of oil prices and allowed the market forces of international and local supply and demand to determine prices. This accord abolished the National Energy Program, which was a policy of Trudeau's Liberal government that was highly unpopular in the Western provinces.[49][50]^: 12–15

The environment was a key focus of Mulroney's government. His government added eight new national parks (including Bruce Peninsula and South Moresby), and passed the Canadian Environmental Assessment Act and Canadian Environmental Protection Act.[41][51]

In 1987, Mulroney hosted an international climate conference in Montreal, Quebec. There, 46 nations signed the Montreal Protocol to limit the use and production of chlorofluorocarbons (CFCs); this agreement came after the discovery that CFCs were burning a hole through the ozone layer.[52]

Mulroney secured the U.S.–Canada Air Quality Agreement, an environmental treaty on acid rain, with United States President George H. W. Bush in 1991. Both nations committed to reducing the emissions for the air pollutants (sulphur dioxide and nitrogen oxide) that caused acid rain through a cap-and-trade system.[53][54] Negotiations began in 1986 when Mulroney first discussed the issue with then-president Ronald Reagan. Mulroney repeatedly pressed the issue in public meetings with Reagan in 1987[55] and 1988.[56]

Under Mulroney, Canada became the first industrialized country to ratify the 1992 Convention on Biological Diversity in Rio de Janeiro, Brazil. Conference experts claimed that Canada's signing of the treaty motivated the United Kingdom and Germany to pledge their support and thus avoid the convention's defeat. The conference also introduced the United Nations Framework Convention on Climate Change, which sought to reduce greenhouse gas emissions to an environmentally-friendly level; Canada was the first Group of Seven (G7) nation to sign the treaty. At the convention, Mulroney pledged $260 million from Canada towards advancing sustainable development for developing nations; this included an offer to forgive $145 million in debts owed to Canada by Latin American nations on the condition that the sum of money be used for sustainable development and social programs. At the end of the conference, Mulroney stated, "I leave this conference believing we have a better chance of saving the world than we had when we came here."[57][58]

By 1992, Newfoundland and Labrador cod of breeding age dropped to one percent of its estimated peak. Concerned about the overfishing of cod stocks off the coast of the province, Mulroney's government in the summer of that year imposed a moratorium on cod fishing; they initially set the ban for a minimum of two years, but later expanded it indefinitely.[59][60][61] This resulted in the layoff of 30,000–40,000 workers. Mulroney's government introduced the Northern Cod Adjustment and Recovery Program (NCARP) that provided unemployment insurance payments and retraining to workers; most of the workers viewed this as insufficient. In the first decade of the ban, Newfoundland and Labrador's population fell by 10 percent as people left to search for work.[61][62]

On September 22, 1988, Mulroney issued an official apology on behalf of the Canadian government for Japanese Canadian internment during World War II. Mulroney's government provided a 300 million dollar compensation package which included $21,000 to each of the remaining 13,000 survivors, $12 million for a Japanese community fund, and $24 million to create a Canadian race relations foundation.[63]

Mulroney argues he set up the Deschênes Commission of inquiry on Nazi war criminals soon after he was first elected in 1984, even though it was controversial among “communities where Nazi criminals posed as respectable citizens.”[64]

On issues of abortion, Mulroney declared he was opposed to "abortion on demand", but gave no details on what that meant legally.[65] In Spring 1988, the Mulroney government offered a compromise solution that would give easy access to abortion in the early stages of pregnancy and criminalize late-term ones. The law in the House of Commons was defeated 147 to 76 in a free vote, voted against by both MPs who opposed easy access to abortions and those who opposed adding any abortion rules to the Criminal Code. Some pro-life social conservatives who played a role in Mulroney's 1984 landslide were disappointed by this move, as they were in favour of outlawing abortion completely, regardless of the circumstance. In 1989, the government introduced a much stricter bill. If enacted, it would ban all abortions unless a doctor ruled the woman's life or health would be threatened. Anyone found in violation of the law could be imprisoned for up to two years.[66] In another free vote, the House of Commons passed the new bill by nine votes.[67] A few months later, the bill failed in the Senate on a tie vote. Under the rules of the Senate, a tie meant the measure was defeated.[68] This was the last time the federal government attempted to enact abortion laws. Today, abortion in Canada remains completely legal at all stages of pregnancy, regardless of the reason.

In 1991, Frank magazine ran a satirical advertisement for a contest inviting young Tories to "Deflower Caroline Mulroney". Her father was incensed and threatened physical harm toward those responsible before joining several women's groups in denouncing the ad as an incitement to rape on national television. Frank's editor Michael Bate, called the spoof, intended to mock her unpopular father for bringing her to public adult oriented events, "clumsy" but had no regrets. Bate also shared sympathy towards her father's reaction over the spoof.[69]

A major undertaking by Mulroney's government was an attempt to resolve the divisive issue of national unity. Under the Quebec nationalist Parti Québécois government of Premier René Lévesque, Quebec became the only province to not sign the new Canadian constitution when it was patriated in 1982. In the 1985 Quebec provincial election, the Parti Québécois government suffered a landslide defeat to the Liberals led by Robert Bourassa. Some believed that the new Quebec government's moderate stances on nationalism would allow the province to formally endorse the constitution. Mulroney wanted Quebec to endorse the constitution and wanted to include Quebec in a new agreement with the rest of Canada.[70] In August 1986, Mulroney met with provincial premiers in Edmonton, Alberta, where the ministers agreed to the "Edmonton Declaration". It stated that a "Quebec Round" of constitutional talks based on Bourassa's five conditions that would have to be met for Quebec's endorsement of the constitution (recognition of Quebec's distinct character (as primarily Catholic and French-speaking); a veto for Quebec in constitutional matters; input from Quebec into the appointment of Supreme Court justices; entrenchment of Quebec's role in immigration; and a limit on the federal spending power[71]) would occur before further reforms would be undertaken.[72]

Mulroney called a First Ministers' conference with the ten provincial premiers for April 30, 1987, at Willson House, located on the shores of Meech Lake, Quebec, in the Gatineau Hills.[73] During the conference, Mulroney negotiated the Meech Lake Accord, a package of constitutional amendments designed to satisfy Quebec's demand for recognition as a "distinct society" within Canada. The Accord also devolved some powers to the provinces such as giving provinces a role in nominating people to serve in some federal institutions (e.g. the Senate and Supreme Court of Canada); allowing provinces to withdraw from federally-financed social programs on the conditions that the province establish its own program that meets national standards; giving constitutional status to federal–provincial immigration agreements; and mandating annual First Ministers' conferences (the Accord also required that Senate reform and fisheries be discussed at the conferences), which made the federal–provincial consultative process constitutional.[70] At a final roll call at 4:45 a.m. on June 3, 1987, hours before the signing ceremony, Mulroney knowingly breached convention by taking the vote in reverse order around the table instead of the traditional order of a province's entry into confederation.[74] At the symbolic signing ceremony, the premiers signed the Accord.[75] The agreement would have changed the constitution's amending formula; it thus needed to be ratified within three years by the federal parliament and the legislatures of all ten provinces. On June 23, 1987, Quebec became the first province to approve of the Accord, triggering the three year time limit provided for by the Section 39(2) of the Constitution Act, 1982; this meant that June 22, 1990, would be the last possible day the Accord could pass.[76]

Opinion polls showed that a majority of Canadians supported the Accord. Some believed the Accord would weaken Quebec separatism. Critics believed the Accord would weaken the federal government's authority and some from English Canada argued the "distinct society" clause would give Quebec special status and not make it equal to the other nine provinces. Mulroney told the Toronto Star, "You can have the old style of warring federalism, or you can have genuine co-operative federalism, on which we're trying to build a new country."[77] As criticism grew, support for the Accord declined. However, it was still popular in Quebec; some feared the Accord's failure would spark a backlash in the province and damage national unity.[70]

A commission headed by Mulroney's former cabinet minister, Jean Charest, recommended a companion accord that would address the concerns of other provinces, assert that the distinct society clause would be subject to the Charter, and would feature greater protections for minority language rights in the provinces.[78] Mulroney's environment minister and Quebec lieutenant, Lucien Bouchard, viewed the companion accord as a betrayal of Meech and subsequently praised the Parti Québécois in a telegram. Mulroney reportedly demanded Bouchard clarify the remark or resign, and Bouchard supplied a lengthy letter of resignation on May 22, 1990.[79] Mulroney, however, claims he fired Bouchard. Bouchard left the Progressive Conservatives soon afterwards. After the failure of the Accord, Bouchard convinced several other Tories and Liberals to join him to form the Bloc Québécois, a pro-sovereigntist party.[80][81][82]

In early June 1990, all premiers finally agreed to ratify the Accord[note 1] provided there be further constitutional discussions revolving around an elected Senate, the amending formula, equality, and Indigenous issues. Around that time, New Brunswick agreed to ratify the agreement. Manitoba and Newfoundland and Labrador remained the only provinces to have not ratified it; they only had a few weeks left. Unanimous support from every member of the Manitoba Legislative Assembly was required to bypass the necessary public consultations in the assembly and proceed with ratification. On June 12, 1990, Member of the Legislative Assembly of Manitoba Elijah Harper announced his opposition to the Accord, on the grounds that Indigenous groups had not been consulted. Harper's opposition prevented the amendment from proceeding, and thus the Accord failed to pass in the legislature.[70][83] This allowed the premier of Newfoundland and Labrador, Clyde Wells (who revoked the province's previous assent though reluctantly agreed to ratify the Accord in June 1990[84]), to excuse himself from bringing the Accord to a vote in the Newfoundland and Labrador House of Assembly. The Accord failed to be ratified as Manitoba and Newfoundland and Labrador did not approve of it by the June 23, 1990, deadline.[70]

Following the Meech Lake failure, Mulroney sought a second attempt to get Quebec's endorsement of the constitution. He appointed his foreign minister, Joe Clark, as the first minister responsible for constitutional affairs on April 21, 1991.[85] Clark was responsible for establishing a new accord to end the constitutional deadlock with Quebec. Mulroney's government appointed two Quebec bodies (the Allaire Committee and the Belanger-Campeau Committee) and two national bodies (the Beaudoin-Edwards Committee and the Spicer Commission) to engage in discussions regarding constitutional reform. These bodies generated various reports, including the federal document titled Shaping Canada’s Future Together. The Mulroney government then held five national conferences to discuss the proposals in the document. The conferences led to another federal report titled A Renewed Canada. After, negotations between the federal, provincial, and territorial governments occurred. Unlike the Meech Lake Accord, Indigenous peoples were included in the discussions. Quebec was included in the final stages. The negotiations culminated in the Charlottetown Accord, which was unveiled in Charlottetown, Prince Edward Island, on August 28, 1992.[86]

The Accord gave provinces jurisdiction over foresty, mining, cultural affairs,[note 2] and other areas; required the federal government to negotiate policy with the provinces in certain areas such as telecommunications, labour and training, regional development, and immigration; abolished disallowance (which gives the federal Cabinet power to overrule provincial legislation within one year of it being passed); and required provincial consent for the federal government gaining power over provincial infrastructure projects. The Accord allowed provinces to create their own social programs and mandated the federal government to compensate provinces as long as the provincial social programs met national standards. It also mandated the federal government to compensate provinces that withdrew from any constitutional amendment that transferred provincial powers to the federal government; the compensation would allow provinces to fund their own programs. In addition, the Accord addressed Indigenous self-government and contained the "Canada Clause" that determines Canadian values including egalitarianism, multiculturalism, and recognition of Quebec as a distinct society. Finally, the Accord entrenched the structure and appointment process for the Supreme Court of Canada in the constitution; changed the Senate into a Triple-E Senate with reduced powers (such as requiring a majority of all senators and a majority of Francophone senators in certain votes); increased the number of seats in the House of Commons; guaranteed Quebec at least a quarter of the Commons' seats; and increased the number of matters that require unanimous approval for a constitutional amendment.[86]

The Accord was supported by the federal government and all ten provincial governments. Although it could have been ratified as a constitutional amendment, Mulroney's government insisted on holding a national referendum to avoid a repetition of the criticism that the Meech Leek Accord was agreed upon without public approval. On October 26, 1992, two referendums, one national (without Quebec) and one in Quebec, were held asking if Canadians agreed with the Charlottetown Accord. Nationally, 54.3 percent opposed the Accord. In Quebec, 56.7 percent opposed it. Many saw the Accord's defeat as a protest against Mulroney's government, which was heavily unpopular due to the failure of the previous Meech Lake Accord, the introduction of the GST, and the early 1990s recession.[86]

As prime minister, Mulroney strengthened Canada's relations with the United States, moving away from Pierre Trudeau's Third Option policy of reducing American influence on Canada. Mulroney established a close relationship with U.S. President Ronald Reagan.[87] On March 17 and 18, 1985, the "Shamrock Summit" between Mulroney and Reagan was held in Quebec City. The summit gained its name from the two leaders' Irish background and because the meeting started on St. Patrick's Day.[88] In the summit, Mulroney and Reagan sang When Irish Eyes are Smiling; this signified the camaraderie between the two leaders and a turning point in Canada–United States relations.[89][90][91]

The Air India Flight 182 bombing, which originated in Montreal, occurred on June 23, 1985. This was the largest terrorist act before September 11, 2001, with the majority of the 329 victims being Canadian citizens. Mulroney sent a letter of condolence to Indian Prime Minister Rajiv Gandhi, sparking an uproar in Canada, since he did not call families of the actual victims to offer condolences. Furthermore, there were several warnings from the Indian government to the Mulroney government about terrorist threats towards Air India flights. Questions remain as to why these warnings were not taken more seriously and whether the events leading to the bombing could have been prevented.[92][93][94]

In November 1984, Mulroney sent his newly-appointed Canadian ambassador to the United Nations, Stephen Lewis, to the Headquarters of the United Nations in New York City to persuade the General Assembly to take action against the ongoing Ethiopian famine. Days later, the UN and Red Cross launched an effort to save seven million starving Ethiopians and 22 million others in Africa. The Mulroney government's efforts to aid Ethiopia differed Canada from the United States and the United Kingdom, two Western nations which avoided taking action against the famine due to Ethiopia's Marxist regime. Mulroney's foreign affairs minister, Joe Clark, became the first senior Western official to visit Ethiopia during the famine, ahead of UN officials. Mulroney's government spent tens of millions of dollars to match private donations to combat the famine. Canada contributed to over 10 percent of international aid to Ethiopia. After the famine, Mulroney's government increased aid and development funding to Africa.[95]

The Mulroneys with the Reagans in Quebec City, Canada, on March 18, 1985, the second day of the "Shamrock Summit".

Mulroney supported the United Nations coalition during the 1991 Gulf War and when the UN authorized full use of force in the operation, Canada sent a CF-18 squadron with support personnel and a field hospital to deal with casualties from the ground war as well as a company of The Royal Canadian Regiment to safeguard these ground elements. The Canadian Forces code-named Canada's participation Operation Friction. In August Mulroney sent the destroyers HMCS Terra Nova and HMCS Athabaskan to enforce the trade blockade against Iraq. The supply ship HMCS Protecteur was also sent to aid the gathering coalition forces. When the air war began, Canada's planes were integrated into the coalition force and provided air cover and attacked ground targets. This was the first time since the fighting on Cyprus in 1974 that Canadian forces participated directly in combat operations.[96]

On December 2, 1991, Canada became the first Western nation to recognize Ukraine as an independent country, next day after the landslide referendum in favour of independence in Ukraine.[97]

Mulroney's government opposed the apartheid regime in South Africa. Beginning in 1985, Mulroney led an effort within the Commonwealth to sanction the South African government with the goal of pressuring them to end apartheid and release anti-apartheid activist Nelson Mandela from prison. This put Mulroney at odds with British Prime Minister Margaret Thatcher, who opposed apartheid but believed the sanctions would hurt Britain (which had economic ties with South Africa) and that the measures would hurt South Africans and cause job losses. United States President Ronald Reagan also opposed sanctions, believing that Mandela and other leaders of the African National Congress were communists.[98] At an October 23, 1985, United Nations General Assembly meeting, Mulroney stated, "if there is no progress in the dismantling of apartheid, [Canada]'s relations with South Africa may have to be severed completely"; he restored this line in his speech after he originally removed it at the advice of External Affairs.[99] After an August 1986 meeting in London, Canada, along with other Commonwealth nations, implemented 11 new sanctions on South Africa including bans on new air links, new investment, promotion of tourism,[98] and imports of South African coal, metals and agricultural goods.[100]

The day after Mandela was released on February 11, 1990, he spoke with Mulroney through the telephone, thanking him for his efforts to end apartheid. Mandela made the Parliament of Canada his first legislature in the world to make a speech. On June 18 of that year, Mandela spoke in the House of Commons of Canada, where he thanked Mulroney and Canadians. The two remained in contact after they left politics; during his annual business trips to South Africa, Mulroney visited Mandela.[98]

Critics noted that Mulroney had originally professed opposition to free trade during the 1983 leadership campaign.[101] Though the 1985 report of the MacDonald Commission suggested free trade as an idea to him.[102] Negotiations between Canada and the United States for a free trade treaty started in May 1986. In October 1987, a deal was reached;[103] the Canada–United States Free Trade Agreement (CUSFTA) stated that all tariffs between the two countries would be eliminated by 1998. This deal was achieved not least because of Mulroney's close relationship with U.S. President Ronald Reagan.[104] This agreement was controversial; while Mulroney used his massive majority in the House of Commons to pass the bill, the Liberal-dominated Senate demanded an election before proceeding to a ratification vote.[105] This induced Mulroney to ask Governor General Jeanne Sauvé on October 1 to dissolve Parliament and call an election for November 21.[106]

NAFTA Initialing Ceremony, October 1992; From left to right: (Standing) Mexican President Salinas, US President Bush, Prime Minister Mulroney, (Seated) Jaime Serra Puche, Carla Hills, Michael Wilson.

The trade deal was the main issue of the election, with the Liberals and New Democratic Party (NDP) opposing it; Liberal leader John Turner (who was preparing for his second campaign after Mulroney defeated him in 1984) believed that the agreement would "Americanize" Canada and cost many Canadian jobs. A week after the October 25 debate, the Liberals were six points ahead of the PCs. To combat this Liberal surge, the PCs began running a more negative campaign, capitalizing on the perceived lack of public confidence in Turner, his perceived inability to lead the Liberal Party, and arguing that he only opposed free trade because of political opportunism. The Progressive Conservatives' poll numbers began to rebound and they were reelected with a greatly reduced majority, winning 169 out of 295 seats and 43 percent of the popular vote.[106] Mulroney became the first and only federal Canadian Conservative party leader since John A. Macdonald to lead his party to a second majority government.[lower-alpha 1] The trade deal gained the support of Quebec Premier Robert Bourassa, which helped the PCs maintain their standing in Quebec.[107] In this election, Mulroney transferred to another eastern Quebec seat, Charlevoix, after an electoral redistribution saw its boundary shift to include Baie-Comeau.

Also on November 21, Mulroney made a controversial Order in Council which allowed the establishment of the AMEX Bank of Canada (owned by American Express), despite Finance Minister Michael Wilson rejecting AMEX's application to open a Canadian bank in 1986. The Amex Bank of Canada started operating on July 1, 1990. Toronto-Dominion Bank chairman Richard Thomson accused Mulroney's government of favouritism towards Amex as its Chief Executive Officer, James Robinson, supported free trade.[108]

The government implemented the deal; it was made effective on January 1, 1989. In 1994, CUSFTA was replaced by the North American Free Trade Agreement (NAFTA), which now included Mexico.

In late 1987, the Western Canada-based right-wing populist Reform Party of Canada was founded. The creation of the party was motivated by Western Canadian discontent with Mulroney's government and the Progressive Conservatives in general. The Reform Party opposed the Mulroney government's promotion of the Meech Lake and Charlottetown Accords as well as their introduction of the goods and services tax. Although the party only won 2 percent of the popular vote and no seats in the 1988 election, they won its first seat in the Commons on the May 6, 1989, by-election in the Alberta riding of Beaver River, where Reform candidate Deborah Grey defeated Progressive Conservative candidate Dave Broda by a nearly 20 percent margin. This was the first sign that Mulroney's coalition was fracturing; the PCs had dominated Alberta's federal politics since the 1958 election.[109][110]

In June 1991, the pro-Quebec sovereigntist Bloc Québécois was founded by Mulroney's former environment minister and Quebec lieutenant, Lucien Bouchard. The party's foundation was motivated by the collapse of the Meech Lake Accord, which would have benefited Quebec if it was ratified. The party attracted a few other PC and Liberal members of parliament.[111]

Widespread public resentment of the goods and services tax, the early 1990s recession, the fracturing of his political coalition, and his lack of results regarding the Quebec situation caused Mulroney's popularity to decline severely during his second term. Mulroney entered 1993 facing a statutory general election. By this time, his approval ratings had dipped into the tens, and were at 12 percent in a 1992 Gallup poll, making him the most unpopular prime minister since opinion polling began in Canada in the 1940s.[112]

On February 24, 1993, Mulroney announced his intention to resign as prime minister and retire from politics. In his announcement, Mulroney stated, "Whether you agree with our solutions or not, none will accuse us, I think, of having chosen to evade our responsibilities by sidestepping the most controversial issues of our time." Mulroney claimed his resignation was not related to the consensus that he would be heavily defeated by Jean Chrétien's Liberals if he led the Tories into the next election, and rather argued he could defeat the Liberals if he sought another term.[113][114] The last Gallup Poll taken before Mulroney's announcement of resignation, on February 15, 1993, showed the PC's polling numbers had rebounded to 21 percent.[115] In his final days in office, Mulroney conducted a European "farewell" tour using Canadian federal funds.[116][117] On June 13, 1993, Mulroney was replaced as leader of the Progressive Conservatives by Defence Minister Kim Campbell. On June 25, 1993, Mulroney resigned as prime minister and chose not to run for reelection at the Commons.

The House of Commons after the 1993 election

In the October 25, 1993 election, the Progressive Conservative Party was reduced from 156 seats to two seats in the worst defeat ever suffered for a governing party at the federal level in Canada. The Tories were no longer recognized as an official caucus in the House of Commons, since the required minimum number of seats for official party status is 12. As an example of the antipathy toward Mulroney, his former riding fell to the Bloc by a lopsided margin; the Tory candidate finished a distant third, with only 6,800 votes out of nearly 40,000 cast.[118] The more right-wing Reform Party won over alienated Western Canadians and replaced the PCs as the major conservative party in Canada; they won 52 seats and 18.7 percent of the popular vote, which was greater than the PCs (which won 16 percent of the popular vote). The Bloc replaced Mulroney's voting base in Quebec, becoming the Official opposition (at 54 seats). In the election, Chrétien's Liberals won a strong majority government. Mulroney claimed he was not responsible for the obliteration of the PCs, and instead blamed Campbell and her relationship with her boyfriend. In The Secret Mulroney Tapes it was revealed Mulroney said of Campbell, "Throughout the whole goddam thing she's been screwing around with this Russian guy. The guy was sneaking into hotel rooms and the campaign bus"; he also said it was "the most incompetent campaign I've seen in my life."[119][120] In the following 1997 and 2000 elections, the Progressive Conservatives would continue being the smallest party in the House of Commons, holding on to fifth-place status though regaining official party status. In 2003, the party merged with Reform's successor, the Canadian Alliance, to create today's Conservative Party of Canada.

On September 29, 1995, the Canadian Department of Justice, acting on behalf of the RCMP, sent a Letter of Request to the Swiss Government asking for information related to allegations that Mulroney was involved in a criminal conspiracy to defraud the Government of Canada.[129] The investigation pertained to "improper commissions" allegedly paid to German-Canadian businessman Karlheinz Schreiber (or to companies controlled by him), Brian Mulroney and former Newfoundland premier Frank Moores in exchange for three government contracts.[130] These contracts involved the purchase of Airbus Industrie aircraft by Air Canada; the purchase of helicopters by the Canadian Coast Guard from Messerschmitt-Bolkow-Blohm GmbH (MBB) in 1986; and the establishment of a manufacturing plant for Thyssen Light Armoured Vehicles (Bear Head Project) in the province of Nova Scotia, a project which Mulroney as prime minister had cancelled.[130]

This Letter of Request (LOR) "and its contents were to be kept confidential" but the letter was leaked to the media.[131] As a result, Mulroney launched a $50 million libel lawsuit against the Government of Canada and the RCMP on November 20, 1995.[132] On January 5, 1997, Mulroney agreed to an out-of-court settlement with the Government of Canada and the RCMP.[133] The Oliphant Commission Report in 2010 stated that Mulroney accepted $225 000 from Schreiber, and former justice minister Allan Rock said he would have used a different litigation strategy in this case had he known about these payments.[134]

Mulroney played an influential role by supporting the merger of the Canadian Alliance (successor of the Reform Party), and the Progressive Conservatives. Mulroney joined the Conservative Party of Canada following its creation in 2003 by the merger of the Progressive Conservatives and the Alliance. This distinguished him from other prominent PC politicians, such as former prime ministers Joe Clark and Kim Campbell, who became independents as they believed that the Conservative Party was too right-wing and drifting towards social conservatism.

According to press reports, Mulroney's membership lapsed in 2006. In early 2009, Mulroney "called a high-ranking person in the party and asked that his name be removed from all party lists" due to his anger at the continued inquiry into his financial affairs,[135] although he denies this claim.[136] A Mulroney confidant, speaking on condition of anonymity, called the party's claims preposterous. "He's part of the history of this party, you can't rewrite history. If they're worried about branding, then shut the inquiry down. They're the ones who called the inquiry."[137]

Months before the 2015 federal election, Mulroney endorsed Prime Minister Stephen Harper.[138] Mulroney campaigned for Conservative Leader Erin O'Toole in the run-up of the 2021 Canadian election.[139] Just a month and a bit later, Mulroney criticized him on the matter of COVID-19 vaccinations, stating that he should show 'leadership' and expel unvaccinated MPs from the Conservative caucus.[140] In October 2022, Mulroney said he supported the Conservatives' new leader, Pierre Poilievre, but urged him to move closer to the political centre.[141]

Mulroney appears during an interview with Heather Reisman, speaking about his memoirs.

Mulroney's Memoirs: 1939–1993 was released on September 10, 2007. Mulroney criticizes Pierre Elliot Trudeau for avoiding military service in World War II, and favourably references sources that describe the young Trudeau as holding anti-Semitic nationalist views and having an admiration for fascist dictators.[142][143] Tom Axworthy, a prominent Liberal strategist, responded that Trudeau should be judged on his mature views. Historian and former MP and Trudeau biographer John English said "I don't think it does any good to do this kind of historical ransacking to try to destroy reputations".[144][145]

Brian Mulroney has received several honorary degrees, including:

Location	Date	School	Degree
Newfoundland and Labrador	October 1980	Memorial University of Newfoundland	Doctor of Laws (LL.D)[163]
Maryland	May 21, 1992	Johns Hopkins University	Doctor of Humane Letters (DHL) [164]
Connecticut	April 26, 1994	Central Connecticut State University	Doctor of Social Science (D.S.Sc)
Israel	1994	Tel Aviv University	Honorary Doctor of Philosophy[165]
Missouri	May 1998	University of Missouri–St. Louis	Doctor of Laws(LL.D) [166]
Quebec	December 2005	Concordia University	Doctor of Laws (LL.D) [167]
Massachusetts	May 21, 2007	Boston College	Doctor of Laws (LL.D)[168]
Ontario	June 15, 2007	University of Western Ontario	Doctor of Laws (LL.D) [169]
Quebec	June 16, 2007	Laval University	[170]
Quebec	June 3, 2016	Université de Montréal	Unspecified Doctorate (PhD) [171]
Quebec	June 6, 2017	McGill University	Doctor of Laws[172]
New Brunswick	May 15, 2018	St. Thomas University	Unspecified Doctorate [173]

Mulroney was appointed a Companion of the Order of Canada on May 6, 1998. His citation reads:[174]

As the eighteenth Prime Minister of Canada, he led the country for nine consecutive years. His accomplishments include, among others, the signing of the Free Trade Agreement with the United States, the North American Free Trade Agreement with Mexico and the United States, and the Acid Rain Treaty. In other international activities, he assumed the leadership of the Commonwealth countries against apartheid in South Africa and was appointed Co-chair of the United Nations' World Summit for Children. Fiscal reform, important environmental initiatives and employment equity were also highlights of his political career.

In 2018 Mulroney was inducted into the Canadian Disability Hall of Fame[175] and was awarded the George Bush Award for Excellence in Public Service.[176]