On December 12, 2003, Paul Martin became Canada's Prime Minister, succeeding Jean Chretien. Martin, leader of the Liberal Party, has broad prior governmental experience, including service as Finance Minister. It is widely expected that he will call elections in Spring 2004 and that the Liberals will retain a majority in Parliament. At the same time, the recent merger between the Progressive Conservative party ("red" Tories) and the western-based conservative Canadian Alliance, into the "Conservative Party of Canada," may offer a more coherent opposition in the expected 2004 election.

The Liberal Party won a major victory in the November 2000 general elections. Chretien was the first Prime Minister to lead three consecutive majority governments since 1945, as the Liberals increased their majority in Parliament to 172 of the 301 Parliamentary seats. The Canadian Alliance Party, which did well in western Canada but was unable to make significant inroads in the East, won the second-highest total of seats (66).

The tension in federal-provincial relations is a central feature of Canadian politics: Quebec wishes to preserve and strengthen its distinctive nature; western provinces desire more control over their abundant natural resources, especially energy reserves; industrialized central Canada is concerned with economic development; and the Atlantic provinces have resisted federal claims to fishing and mineral rights off their shores.

The federal government has responded to these different regional needs by seeking to rebalance the Canadian confederation, ceding its spending power in areas of provincial jurisdiction, while attempting to strengthen the federal role in other areas. The federal government has reached agreement with a number of provinces returning to them authority over job training programs and is embarked on similar initiatives in other fields. Meanwhile, it has attempted to strengthen the national role on interprovincial trade, while also seeking national regulation of securities.

National Unity
The election in April 2003 of Premier Jean Charest and the Liberal Party of Quebec to govern Canada's second most populous province, was a significant victory for the Chretien government, which had struggled, under the threat of secession, to accommodate the aspirations of the French-speaking province. Though separatist aspirations are currently muted, and for now most Quebec voters seem to appreciate the assurance of maintaining their separate francophone identity and the economic benefits of remaining in the Confederation, 47% of Quebec voters still identify themselves as desiring a sovereign state.