Canada's Chretien hit by arrogance, patronage claims

SASKATOON, Canada (Reuters) -- Charges of arrogance and patronage came back to haunt Canadian Prime Minister Jean Chretien on Thursday after Chretien admitted he had helped an associate secure a government loan.

Chretien said he was only doing his job as a member of Parliament when he lobbied the then president of the Business Development Bank of Canada to approve the cash -- a C$615,000 mortgage loan to a struggling hotel in his home town of Shawinigan.

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"You call who you know, and I knew the president, and I called him once or twice. He came to visit me at my home," Chretien told a news conference.

A group of investors, including Chretien, had sold the hotel in 1993. The government loan went to the new owner.

Canadian Alliance leader Stockwell Day, struggling to close a gap of up to 20 points in the polls with Chretien's Liberal Party, jumped on the news. "This is horrendous," he told a rally outside Vancouver.

Day has hammered away at the theme that Chretien's seven years in power have been marked by arrogance, secrecy, waste and patronage. Day was campaigning on Thursday in British Columbia, one of the four western provinces where his support is stronger than in the Liberal heartland in eastern Canada.

Chretien called the election just 3-1/2 years into his five-year term in office to take advantage of what appeared to be a good showing in opinion polls. The latest surveys still point to a Canada-wide majority for his Liberal Party, but the right-wing Alliance is also winning respectable poll ratings.

A Compas poll published on Thursday by the National Post and the Southam News chain put the Liberals ahead of the Alliance by 45 to 25 percent, a gap one point wider than the previous Compas poll a week ago.

A Reuters-Zogby poll put the Liberals ahead 44 to 28 percent and an Ipsos-Reid poll had pegged the gap at 40 to 28 percent.

But while Chretien and the Liberals have shown a consistently strong lead nationally, there are wide regional differences in party support.

The Alliance, riding a powerful wave of support in the West, has left the Liberals struggling to save the seats held by ministers in Saskatchewan, Alberta and British Columbia. Seven senior or junior ministers come from these provinces and at least four could lose their seats.

"We're here for a reason," one Chretien aide noted on Thursday.

Many voters in the West object to the dominance of the more populous provinces of Quebec and Ontario in government jobs and grants. Prairie farmers are also angry at high freight rates and low grain prices and at strict new gun registration rules.

"Unless people have something to vote for, probably he (Chretien) is not going to get any representation," Sinclair Harrison, president of the Saskatchewan Association of Rural Municipalities, said after talks with Chretien in Saskatoon.

"People can't talk about the long term. They have to pay their bills from yesterday."

Chretien's often negative image in the west and talk of government favors have not made huge dents in his popularity nationwide, although his government has been under the gun throughout the year for loosely administered jobs grants.

Police have launched investigations into five grants in Chretien's own electoral district to see if there were any improprieties.

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