This experience gave him knowledge of the Canadian parliamentary system, and allowed Chrétien to establish a very centralized government that, although highly efficient, was also lambasted by critics such as Jeffrey Simpson and the media as being a "friendly dictatorship" and intolerant of internal dissent.

When the 1995 Quebec independence referendum began in September, Chrétien was relaxed and confident of victory as polls showed federalist forces were leading by a wide margin.

[5] In the weeks leading to the referendum on October 30, 1995, the federal government was seized with fear and panic as polls showing that, under the leadership of Bouchard, the oui side was going to win.

[7] With the federalist forces in open disarray and the polls showing that the oui side was going to win, Fisheries Minister Brian Tobin suggested organizing a gigantic "unity rally" in Montreal.

[9] On the night of the referendum, the prospect of victory by the oui side was so realistic that Defence Minister David Collenette ordered the military to begin contingency plans to defend federal property in Quebec from a separatist take-over.

[11] On November 5, 1995, six days after the referendum, Chrétien and his wife escaped injury when André Dallaire, armed with a knife, broke in the prime minister's official residence at 24 Sussex Drive.

[14] In early 1996, the federal government launched an advertising program to increase the presence of Canada in Quebec, a policy that Chrétien believed would avoid a repeat of the near-defeat of 1995, and was to lead eventually to the Sponsorship scandal.

[28] On August 7, 2001, the APEC report was issued by Judge Ted Hughes, which cleared Chrétien of wrongdoing, but stated that Jean Carle of the PMO had improperly pressured the RCMP to attack the protesters.

[37] In 2001, the court ruled in favor of Chrétien, stating it was the prime minister's prerogative to advise the Queen not to raise Canadians to the British peerage if he felt so inclined, and thereforth this was not an abuse of power as Black had claimed.

The rising interest rates, aside from hindering economic activity and thus hurting the government's ability to collect taxes, raised the costs of servicing the existing national debt, which in turn created further doubts among investors that they would be repaid, thus starting the circle all over again.

[53] It was only with the budget that Martin introduced on February 27, 1995, that the Chrétien government began a policy of cuts designed to eliminate the deficit in order to reassure the markets.

[56] Chrétien was not keen on making deep cuts to government spending, but given the crisis caused by the skyrocketing interest rates had decided "reluctantly" there was no alternative.

"[48] The 1995 budget, which was called by Peter C. Newman a "watershed document" that marked the first time in recent memory that anybody had made a serious effort to deal with the deficit, won a favorable reaction from the international markets, and a led to an immediate fall in interest rates.

[65] One senior Liberal later recalled about the Chrétien-Martin debate about reforming Old Age Security that: Martin had been told "no" by the prime minister three times and still he persisted...his insubordination was unprecedented.

[72] The consortium that was due to take ownership of Pearson sued for breach of contract, which led the government to settle out of court in April 1997 for $60 million in damages.

[77] Likewise, Chrétien was later to tell Lawrence Martin that it was far better to intervene in the internal affairs of Yugoslavia to stop human rights violations in the Kosovo region by Serbian forces than to do nothing.

[82] Clinton informed the prime minister that he could either scrap NAFTA or accept it as it was, and that the most he could offer were a few cosmetic concessions like writing a letter saying the United States was not interested in taking over Canada's energy and water.

[84] Critics of the government such as Joe Clark then pointed out that in the previous week, The Globe & Mail had run on its front p. a photo of Canadian soldiers turning over POWs to American troops.

[98] The Progressive Conservatives had a popular new leader in Jean Charest and the New Democrats' Alexa McDonough led her party to a breakthrough in Atlantic Canada, where the Liberals had won all but one seat in 1993.

[100] Finance Minister Paul Martin released a 'mini-budget' just before the election call that included significant tax cuts, a move aimed at undermining the Alliance position going into the campaign.

Chrétien formed a "war room" comprising his communications director Françoise Ducros, Warren Kinsella, Duncan Fulton and Kevin Bosch to gather material to attack Day as a right-wing extremist.

The New Democrats and Bloc Québécois also ran lacklustre campaigns, while the Progressive Conservatives, led by former Prime Minister Joe Clark, struggled to retain official party status.

Opposition parties frequently charged that Chrétien had broken the law in regards to his lobbying for Business Development Bank of Canada for loans to the Auberge Grand-Mère inn.

Duhaime was a friend and constituent to whom the Prime Minister stated that he had sold his interest in the Grand-Mère Inn, a local Shawinigan-area hotel and golf resort, eventually providing evidence of the sale—a contract written on a cocktail napkin.

On February 19, 2001, the RCMP announced that there they did not find sufficient evidence to lay criminal charges against anyone in regards to the Grand-Mere Affair, and Chrétien accused Clark of waging a "witch hunt" against the Liberals.

[107] On April 5, 2001, the National Post received documents purportedly from an anonymous source within the bank, indicating that Chrétien was still owed $23,040 by Duhaime for his share in the Auberge Grand-Mère.

[113] The major controversy of the later Chrétien years was the Sponsorship Scandal, which involved more than $100 million distributed from the Prime Minister's Office to Quebec's federalist and Liberal Party interests without much accountability.

[115] Opposition critics further suggested that the public works minister at the time, Alfonso Gagliano, whom Chrétien had praised as a great patriot, was not just a mere bystander to questionable contacts associated with the sponsorship program that Fraser had identified.

[115] In response to the public outrage, Chrétien argued in speech in Winnipeg that all this was necessary to stop Quebec separatism and justified by the results, stating that: "Perhaps there was a few million dollars that might have been stolen in the process.

"[116] Chrétien's argument that he had nothing to apologize for in regards to the sponsorship program, and his apparent condoning of corruption as justified by the results of saving Canada fared poorly with the Canadian public, which increasingly started to perceive the prime minister as an autocratic leader with a thuggish streak.