Harper dogged by EI controversy in PEI

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As he prepares for a U.S. public-relations push this week to save the Keystone XL pipeline project now inextricably linked to his government, Stephen Harper is finding domestic political controversy equally hard to set right.

Tuesday's prime ministerial stop in Prince Edward Island, to announce a small package of assistance for local companies, was a case in point. It was the day after Mr. Harper had lost his only Newfoundland-Labrador MP, Peter Penashue, in a by-election defeat.

Notably absent from the Summerside event was Conservative PEI Senator Mike Duffy, who is under fire for expense claims. The RCMP is examining living-expenses payments to the former journalist and two other senators to see whether it should initiate an investigation.

Mr. Harper's visits outside Ottawa during parliamentary break weeks afford him a chance to sell Canadians on his government directly, but on Tuesday he found himself dogged by questions over controversial changes to employment insurance that the Tories have been trying to sell for more than a year.

The Conservatives first unveiled the reforms in the 2012 budget – aimed at urging unemployed Canadians to look harder and further for available jobs – but key rule changes took place in early January this year. Critics allege they target seasonal workers and industries in Atlantic Canada, which has led to simmering resentment in the region.

Blaming "misinformation," Mr. Harper tried to cut to the heart of the matter. "There is nothing, absolutely nothing in our changes that targets seasonal industries or seasonal workers or requires anybody to leave their region to get a job," he said. "We are simply making sure that when jobs are available, that Islanders can fill them, and when there is no work for Islanders in their region and they've paid into the fund, they will be eligible to receive, and that is our commitment."

He had little to say about Monday's by-election loss, which gave the sole Conservative seat in Newfoundland-Labrador to the resurgent Liberals under new leader Justin Trudeau.

By-elections only infrequently favour the governing party, but Mr. Penashue appeared to have been in line for a cabinet seat if he'd won. So voters also rejected the perks that come with having a minister from their riding.

"Peter Penashue knew very well that it would be difficult," Mr. Harper said when asked about the defeat. He lauded Mr. Penashue for resigning after an Elections Canada investigation found that his 2011 campaign accepted illegal donations. "He was determined to do the right thing and he made that decision, and of course we thank him for his public service."

The government offered no explanation for Mr. Duffy's absence from an important regional political announcement Tuesday, but the controversy over Senate expense claims continues unabated. Patrick Brazeau, another senator appointed by the Conservatives, announced Tuesday that he will fight a Senate committee order to pay back tens of thousands of dollars in living and travel expenses.

Mr. Harper leaves for New York Wednesday night as part of a ramped-up campaign to win a green light from the United States for the Keystone XL pipeline project, which would transport oil sands crude to Gulf Coast refineries but has been heavily opposed by environmental activists. He'll participate in a question-and-answer session Thursday at an event organized by the Council on Foreign Relations.

If the Obama administration approves the pipeline project, it would be a win for Mr. Harper because the Conservatives have campaigned heavily for the development.