The first Conservative majority government in 26 years--and only the second in 49 years--was considered by many to be a breath of fresh air at first, but growing pains soon surfaced. Many of his ministers had little government experience, resulting in conflicts of interest and embarrassing scandals. Many Tories expected
patronage appointments due to the long time out of government. Indeed, Mulroney made a number of unscripted gaffes regarding patronage, including the reference to Ambassador
Bryce Mackasey as "there's no whore like an old whore". The new Prime Minister's handlers were concerned by his seeming unpredictability and rumours of drinking.
On paper, Mulroney entered office in a very formidable position. No other party crossed the fifty-seat mark, and he could have theoretically taken Canada in any direction he wanted. His position was far more precarious than his parliamentary majority would suggest. His support was based on a "grand coalition" of socially conservative populists from the West,
Quebec nationalists, and fiscal conservatives from Ontario and the Maritimes.
Not surprisingly, such diverse interests became difficult for Mulroney to juggle. He attempted to appeal to the western provinces, whose earlier support had been critical to his electoral success, by cancelling the
National Energy Program and including a large number of Westerners in his Cabinet (including Clark as minister of external affairs). However, he was not completely successful, even aside from economic and constitutional policy. For example, he moved
CF-18 servicing from
Manitoba to Quebec in 1986, even though the Manitoba bid was lower and the company was better rated, and received death threats for exerting pressure on Manitoba over French language rights.
One of Mulroney's main priorities, at least publicly, was to rein in the
deficit, which was running into the billions of dollars. However, the country's
debt increased substantially through his term. His attempts to cut spending limited his ability to deliver on many promises. Also impeding his progress was the Liberal controlled
Senate, led by
Allan MacEachen, which took on a very assertive role in legislation, forcing the government to compromise some points.
A major undertaking by Mulroney's government was an attempt to resolve the divisive issue of national unity. Mulroney wanted to include Quebec in a new agreement with the rest of Canada. Quebec is the only province that did not sign the new
Canadian constitution negotiated by
Pierre Trudeau in 1982. In 1987, Mulroney negotiated the
Meech Lake Accord with the
provincial premiers, a package of constitutional amendments designed to satisfy Quebec's demand for recognition as a "
distinct society" within Canada, and to devolve some powers to the provinces.
The
Air India Flight 182 bombing which originated in Montreal happened during this first term. This was considered the largest terrorist act before Sept 11, 2001 with the majority of the 329 victims being Canadian citizens. Mulroney sent a letter of condolence to then Indian prime minister Rajiv Gandhi which sparked an uproar in Canada since he did not call families of the actual victims to offer condolences. Gandhi replied that he should be the one providing condolences to Mulroney given that the majority of victims were Canadian or lived in Canada. Many Indo-Canadians considered this to be a racist act in that Mulroney didn't consider them to be true Canadian citizens because they were not of Anglo descent. Further to this, 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. A public inquiry into the Air India bombing is currently underway to answer some of these questions.
Another priority was the privatization of many of Canada's
crown corporations. In 1984, the Government of Canada held 61 different crown corporations. It sold off 23 of them. Air Canada was completely privatized by 1989, although the
Air Canada Public Participation Act continued to make certain requirements of the airline.
Petro-Canada would later be privatized.
Mulroney's government actively opposed the
apartheid regime in
South Africa. Mulroney met with many opposition leaders throughout his ministry. His position put him at odds with the American and British governments, but also won him respect elsewhere. Also, external affairs minister Joe Clark was the first foreign affairs minister to land in previously-isolated
Ethiopia to lead the Western response to the
1984 - 1985 famine in Ethiopia; Clark landed in
Addis Ababa so quickly he had not even seen the initial
CBC report that had created the initial and strong public reaction. Canada's response was overwhelming and led the US and Britain to follow suit almost immediately — an unprecedented situation in foreign affairs at that time, since Ethiopia had a
Marxist regime and had previously been isolated by Western governments.
The government took a strong stand against the U.S.
intervention in
Nicaragua under Reagan, and accepted
refugees from
El Salvador, Guatemala, and other countries with regimes supported directly by the Reagan administration.
Near the end of his first term, Mulroney closed a dark chapter in Canadian history with a formal apology and $300 million compensation package for the families of the 22,000 Japanese Canadians who had been stripped of their property and interned during the Second World War.
During his tenure as prime minister, Brian Mulroney's close relationship with
U.S. President
Ronald Reagan helped result in both a landmark treaty on acid rain and the ratification of a
free-trade treaty with the United States under which all tariffs between the two countries would be eliminated by 1998.
Critics noted that Mulroney had originally professed opposition to free trade during the 1983 leadership campaign. This agreement was controversial, and the Senate demanded an election before proceeding on voting, although Mulroney planned on calling an election before the treaty had been signed. The free trade was the central issue of the
1988 election, with the Liberals and NDP opposing it. With the Liberals gaining the initial momentum, a successful counterattack by
Allan Gregg resulted in the PCs being re-elected with a solid but reduced majority and 43% of the popular vote. Mulroney thus became the only Conservative to lead his party to two consecutive majority governments in peacetime during the 20th century. In this election, Mulroney was elected as the MP for
Charlevoix, which included Baie-Comeau after redistribution of the electoral boundaries.