It wouldn’t have exactly brought the Canadian Establishment to its knees. But late last fall, the Liberal-NDP coalition did briefly seem poised to become the most progressive Canadian government in a generation, possibly ever.

Then before you could say “corporate welfare bums,” it was all over. The Conservatives had mounted a hysterical campaign, the media had joined in trashing the coalition, and the Governor General had shown it no more mercy than she would a tasty seal.

By the end of January, the Liberals, now with Michael Ignatieff in charge, had come full circle, voting in support of the Conservative budget. Having briefly dallied with the NDP, the Liberals had returned to the corporate fold.

The full story of how the Establishment closed ranks against the fledgling coalition has yet to be told, but a small piece of it may have inadvertently come to light last week.

It was an unlikely source — the controversial secret tape in which Natural Resources Minister Lisa Raitt, speaking privately to an aide, describes the shortage of medical isotopes as “sexy” and muses about using it to her political advantage.

The media, apparently over the moon that a cabinet minister used the word “sexy” in a secret tape, had little time for another passage on the tape that was titillating in its own way.

Raitt describes how, at a closed-door meeting of politicians and corporate CEOs last January, bank presidents threatened to cut off funding to the deeply indebted Liberal party if Ignatieff voted against the Conservative budget:

“They did it at the Canadian Council of (Chief) Executives, there was three presidents of major banks who stood up in the room — and this is not from cabinet so I can talk about it — stood up and said, ‘Ignatieff, don’t you even think about bringing us to an election. We don’t need this. We have no interest in this. And we will never fund your party again.'”

It’s hard to know what to make of Raitt’s comments. She wasn’t at the meeting, which suggests she may have heard about it from the CEOs — possibly from bankers boasting they had Ignatieff on a tight leash?

Liberal finance critic John McCallum, a former chief economist at the Royal Bank who was at the meeting along with Ignatieff, firmly denied the bankers made any threats. “There was not even a hint of a veiled threat by any CEO,” he said yesterday by phone.

McCallum acknowledged that some CEOs at the meeting had opposed the Liberal-NDP coalition, as well as opposing an election. And he also acknowledged that it was likely the Liberal party borrowed money from the banks, although he said he didn’t know any details.

The taped comments raise questions about what role the banks may have played in nixing the coalition, and also what power they wield over the severely financially strapped Liberal party.

Certainly the bankers were anxious to see the passage of the Conservative budget, which included a measure called the Extraordinary Financing Framework that provided the banks with up to $200 billion in loans and asset swaps.

Back in 1998, then Liberal finance minister Paul Martin infuriated the banks when he refused to allow four of them to merge into two — a refusal that was popular with Canadians and is credited with helping shield Canadian banks from the excesses south of the border.

Could we count on Iggy to do the same?

Linda McQuaig is author of It’s the Crude, Dude: War, Big Oil and the Fight for the Planet.

Linda McQuaig

Journalist and best-selling author Linda McQuaig has developed a reputation for challenging the establishment. As a reporter for The Globe and Mail, she won a National Newspaper Award in 1989...