O'Leary says he would 'coerce' provinces to follow his policies
OTTAWA — Conservative leadership candidate Kevin O’Leary says if he becomes prime minister he will do everything in his power to “coerce” provinces into adopting his preferred economic policies.
In an interview Monday, O’Leary said he wants a “new form of federalism” and a “new tonality for government” that would prioritize federal targets, including tying equalization payments to specific priorities — ideas that seem to go against the grain of the party’s long-standing tenets, according to policy documents.
He also compared his idea to use the notwithstanding clause for border security to the War Measures Act invoked during the October Crisis.
O’Leary’s main campaign promise is to bring Canada to three-percent economic growth. “You can’t do that just federally. You have to have the co-operation of the provinces, obviously,” he said, then accusing some provincial leaders of mismanagement.
“What do I do about that? Everything in my power to help them make the correct economic decisions on behalf of the rest of Canada,” O’Leary said. “I’m going to look for every leverage and fulcrum I’ve got. I do not agree to pushing down more economic decisions in the hands of people that are incompetent.”
If a province uses carbon pricing, O’Leary said he would “find a way to make it economically unviable for you to do that.”
If a province goes above a federal cap for corporate tax rates, based on what Donald Trump implements in the United States, “I would then find a way to deduct that from some form of transfer or equalization payment.”
O’Leary rejected the characterization that using such tactics is a way of punishing provinces that have policies he disagrees with.
“No, no, no. It’s not a punishment. It’s coercing them to do the right thing for their people,” he said.
O’Leary went on to say he would overhaul how equalization payments work, calling them “investments.”
The transfer program, which is supposed to address fiscal disparities among provinces, is written into the 1982 Constitution. Payments are unconditional and “receiving provinces are free to spend the funds according to their own priorities,” according to Finance Canada.
“I don’t want to just send money not knowing what it’s going to, because look at what happens,” O’Leary said, accusing Ontario, specifically, of “wasting” the money.
Receiving payments “disincentivizes” provinces from developing their own economies, O’Leary said, pointing specifically to Nova Scotia and New Brunswick, which he said should be developing their land-based natural gas resources.
“They can simply put out their hand and say, ‘give me an equalization payment.’”
On equalization payments, the party has traditionally focused on reforming the formula that determines who gets what, rather than earmarking funds. The platform that got Stephen Harper elected in 2006 said, “we will ensure that no province is adversely affected from changes to the equalization formula.”