West Block Transcript: Season 6, Episode 20

THE WEST BLOCK

Episode 20, Season 6
Sunday, January 22, 2017
Host: Vassy Kapelos
Guest Interviews: Minister François-Philippe Champagne, Kevin O’Leary, Jason Kenney
Location: Ottawa

On this Sunday, the new Trump administration says renegotiating NAFTA is a priority and Canada should ready itself for a new border tax. How damaging would this be for jobs and the economy here at home?

Then, Kevin O’Leary says he entered the Conservative leadership race to save the country from Justin Trudeau and his “insane economic policy”, but what alternative is O’Leary proposing, and do his numbers add up?

Plus, the battle on the right in Alberta: Are Progressive Conservatives willing to destroy their party to keep its most popular contender from becoming leader?

It’s Sunday January 22^nd. I’m Vassy Kapelos, and you’re in The West Block.

President Trump and his trade team are vowing to renegotiate all of the North American Free Trade Agreement (NAFTA) and to slap U.S. neighbours, including Canada with a new border tax. Trump’s protectionist plans will give tax breaks to companies doing business in the U.S. while putting tariffs on those businesses who operate outside the country. How is Canada preparing for this change? Here’s the prime minister late last week. Take a listen

Prime Minister Justin Trudeau: “In ensuring that everyone on both sides of the border understands the importance of continuing to work constructive and productively across the Canada-U.S. border on issues that matter deeply to citizens on both sides of the border.”

Joining me now is François-Philippe Champagne, Canada’s trade minister. Mr. Champagne you’re in Davos, Switzerland for the World Economic Forum, a gathering of political and business elites from around the world. What are you going to be concretely coming home to Canada with?

Minister François-Philippe Champagne: Well I think the first reason I came to Davos was really to meet my counterparts and I’ve achieved that. This has been a great investment in time because within two or three days I could meet almost all my counterparts. The Europeans this morning had meetings with my counterparts from the Philippines. I met people from Brazil, Mexico, and China obviously; Japan. So we’re talking about trade. We’re talking about investment in Canada and that’s why we come here. We also have a number of business people which are here, foreign investors who are interested in Canada. So in my new role, sometimes I say I’m the chief marketing officer of Canada, so being in Davos, engaging with people. That’s why we’re here and I think it has been a very successful week.

Vassy Kapelos: Let me ask you about the other big news and that of course is the swearing in of the new President of the United States Donald Trump. His trade officials are indicating there will be a border tax, not just on Mexico, but on Canada as well. That’s of course in addition to renegotiating NAFTA. How damaging do you estimate that border tax will be for the Canadian economy should it come into effect?

Minister François-Philippe Champagne: Well the first thing we have to say is to wish good luck to the 45^th president. I would say we’re going to see. You know there’s been discussion, but we’ll see what comes in reality. What I’ve been doing with the U.S. counterparts, there were numbers of representative congressman and others who are here in Davos and I always go back to say we share the longest unguarded border in the world. We have $2.4 billion of trade in goods and services every day. We have 35 states in the United States which have Canada as their major export market. We have 9 million of jobs in the U.S. which depend on trade with Canada so I always go back to the basis and say as the prime minister has said, we’re happy to sit down, but we start from the strong basis. Our economies are integrated. I think our American counterparts understand that we’re going to work on that basis, and we’re going to put things on the table, they’re going to do the same. But we’re going to see what is coming up but we are prepared. We are very serious about that.

Vassy Kapelos: But have you calculated how much a tariff on Canadian goods could cost the economy? It’s not just speculation at this point. We heard from the U.S. Congress secretary nominee Wilbur Ross last week saying it would in fact apply to Canada.

Minister François-Philippe Champagne: Well as you know, with respect to the negotiation with the United States, my colleague, Chris Jeffrey and the minister of foreign affairs will take the lead on that. I would not be able to tell you that because I was in Davos this week. What I’ve been doing with U.S. officials who attended here was to remind them of the integrated economy you have and the prosperity because the fact that our two economies are so integrated, we have millions of well-paying middle class jobs on both sides of the border that depends on open trade between U.S. and Canada. That’s what I’ve been saying, and I can tell you that’s a message which I think registered with our U.S. counterparts which were here in Davos.

Vassy Kapelos: Do you think the Trudeau government though should a tax be applied on Canadian goods, retaliate?

Minister François-Philippe Champagne: Well I think we’ll have to see and like I said my colleague Chris Jeffrey and minister of foreign affairs will take the lead on that. But what we have to remind ourselves is, and again, I’m coming back to the fact that our two economies are dependent on each other.

Vassy Kapelos: Let me turn to a different trade relationship, the one with China. Donald Trump and his commerce secretary have been very critical of China calling it the most protectionist country. This while Canada will soon begin trade talks with the country, is it a risk for Canada for forge ahead with those talks when our southern neighbour and largest trading partner basically considers China enemy number one?

Minister François-Philippe Champagne: Well that’s their position. What we’re saying is that one essential step that we’re saying that we’re going to sit down to look at whether we should be engaging with China further on trade. So I think the essential step that we said we’re going to take is to make a study to sit at the table to make these feasibility studies to look at would that be in the benefit of Canada. We said we were going to have public consultations as well. So the essential first step is first to sit down and look whether that would be in our best interest. That’s what we’ve said that’s what we’re going to do, and I think it’s a good thing. You know in a world where people are talking about uncertainty and protectionism, as Canada you know we’re 0.5 per cent of the world population and we represent 2.2 per cent of global trade so we have to be looking at market, not only for today but prepare markets for decades to come. So I think sitting down with the Chinese is the right thing to do. We’re going to look at whether that would be in the Canadian interest. And if so, we’re going to continue.

Vassy Kapelos: Is there any kind of timeline set out for something like that? If something happens in the United States, the impact on our economy would be fairly quick and fairly certain. So is there any desire on the part of your government to expediate trade talks with China?

Minister François-Philippe Champagne: Well I spoke to my Chinese counterpart. This is one of the visits I will be doing shortly when I’m back in Canada. This is one of the countries that I want to visit because that’s an important relationship. And what I heard from the Chinese side, they’re quite happy as well with this first step that we said let’s make this a feasibility study as quickly as possible. Obviously this is complex; it’s going to take time. But what I can tell you is that there’s an interest on their part and in our part to sit down and actually look at whether that would be in our interest and we’re going to do that as quickly as possible because I think it’s the right things to do. We want to send a signal to Asia and in the Asian-Pacific nations that Canada is open to trade. And I can tell you in the world where the buzz word in Davos was ‘uncertainty’. They look at Canada, Canada’s stability, predictability. People are looking for countries like that that can offer that for people who are going to invest in our country.

Get breaking National news

For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.

Sign up for breaking National newsletter Sign Up

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

Vassy Kapelos: Thank you so much Minister Champagne for joining us this morning.

Minister François-Philippe Champagne: Well it was great talking to you from Davos and looking forward to be back home.

Vassy Kapelos: Still to come, why are Conservatives in Alberta up in arms against each other? But first, Kevin O’Leary says he joined the Conservative leadership race because Justin Trudeau’s economic plan isn’t working, but what about O’Leary’s plan?

Vassy Kapelos: Welcome back. Businessman and reality TV star, Kevin O’Leary entered the Conservative leadership race last week; one day after his fellow contenders took part in the French language debate in Quebec City. O’Leary says he’s in the race because of what he calls the prime minister’s “insane economic policy”. A policy he says is costing Canadian jobs and increasing the federal debt load. And what is Mr. O’Leary proposing to do instead?

Joining me now is Kevin O’Leary. Mr. O’Leary thanks for being here. You’ve said you’re in the race because of what you call the prime minister’s “insane economic policy” and that you want to create jobs for those 18-35 year olds living in their parents basements. How specifically would you do that?

Vassy Kapelos: Let me start with that debt figure, $1.5 trillion dollars. You know as you said it’s not for a number of years and they have projected that the debt to GDP ratio would decrease over the same time. Why is that not sufficient?

Kevin O’Leary: Because I don’t trust this government anymore, at all. They made promises coming in. They were going to balance the budget in 2019 with a $10 billion deficit. Within two months, it was $35 billion. Now I see these absurd numbers. Then I see the policies they put in place. What I realize is what many Canadians realize now; Justin Trudeau doesn’t actually know what he’s doing. That’s what I believe.

Vassy Kapelos: On what you would specifically do, you mentioned put the price on the carbon, the national price on carbon as well there are provincial ones and corporate taxes and personal income taxes. Would you get rid of carbon tax or price on carbon and would you decrease taxes? If so, by how much?

Kevin O’Leary: Well, let me be very specific on what I’m going to do. I’m going to go to Ottawa in 2019 and unwind everything Justin Trudeau did. Everything, he won’t even remember his name 100 days after I take over. It’s very simple. Everything he’s doing is making the country very susceptible to a very slow economy that’s not going to provide anything for our country. So there’ll be no carbon tax. I will completely erase that. That’s the first thing I’ll do. I’ll be removing and waiting obviously to see what Trump’s going to do in terms of corporate taxes and we need to be competitive. We don’t need the lowest taxes. We need to be competitive. The job of government is to provide an environment where people want to start and grow businesses, whether they’re in Canada now or whether it’s capital that wants to come into Canada. And you let that flower bloom and it provides for all of the economy and all of the people. We can’t even grow a weed in Canada today. Trudeau’s policies have poisoned the ground of entrepreneurship and of any kind of economic growth. So there’s a lot of work to be done and my job now for the next two years is going to be to shine the light on Trudeau’s policies because I can read a balance sheet and an income statement and explain the risks inherent to the Canadian people so that he does as little as possible. The more work he does, the more he does, the harder my job is when I get there, so I want to try and stop him in his tracks. And while we’re talking about this, don’t paint the walls at 24 Sussex until my wife has seen the colours.

Kevin O’Leary: So here’s an example, we’re not obviously going to spend all day on tax policy, but I’ll give you one easy one. So let’s say you take a resource rich province like Quebec and you designate a company that has 51 per cent of its employees in the province and its headquarters are there, pays tax provincially there, and pays federal tax there. You’ll allow investors that put money into that business. If they’re successful and they sell their shares later, they’ll get up to 30 days to redeploy the capital back into another Canadian company and they’ll pay no capital gains tax. That’s how you a) attract capital and that’s how you actually redeploy capital. That’s how you create jobs. I don’t see any kind of creativity like that coming out of Trudeau. All I see is the degradation of our economy through more and more and more taxation. I’m very unhappy.

Vassy Kapelos: Just very quickly, we have only about 30 seconds before we go. But what does the next four months look like for you before the leadership election? Are you going to be spending more time in Canada? What’s the plan going forward?

Kevin O’Leary: I’m a global investor; I travel all around the world. I’m here at the global ETF Conference. We have people from Germany, Italy, France, Canada, England, you name it. It’s a very important economic conference. That’s what I do. That’s how I start in touch with capital is. But what I’m going to be doing mostly is reaching out to Canadians because I was surprised last week when I actually announced, and I did it in social media on Facebook live, seconds before I went on national television. Within 40 minutes, 2.7 million people had viewed that. Forty-thousand contacted me. I’m going to be selling memberships to the Conservative Party. Many of those people have never voted before. They were a former NDP-er, some of them were Liberals. Some of them have never been in politics. I need to expand the party. In order for me to get a majority mandate in 2019, I actually have to get 62 per cent of the votes to people 18-35. Wherever Trudeau goes, I’ll go there next and I’ll explain the risk that his policies have for them. Those are the important voters to get the majority mandate. And I’ll make public something now that I’ve told the caucus of the Conservative Party. If I don’t deliver a majority mandate in 2019, fire me. Because in order to do what I have to do, I need a majority mandate. I’ll be asking the Canadian people for that, and then I will eradicate, reverse, eliminate everything Trudeau put in policy, everything gone within the first 100 days. You won’t even remember his name after I’ve been there 100 days.

Vassy Kapelos: Thanks very much for joining us, Mr. O’Leary.

Kevin O’Leary: Take care. Bye-bye.

Vassy Kapelos: Up next, Jason Kenney and the battle within his own party as he campaigns to become its new leader.

Vassy Kapelos: Welcome back. With less than two months to go until the Alberta Progressive Conservative Party picks its new leader, party members there are in a battle over unite-the-right and who should be its leader. Former federal cabinet minister Jason Kenney is one of vying for the leadership and he’s based his campaign primarily on bringing the right together. But is it working? And what impact is it having on the party?

Joining me now from Edmonton is Jason Kenney. Mr. Kenney thanks for being with us. I wanted to ask you why you think you’re the only PC Party leadership candidate who wants to unite-the-right in Alberta.

Jason Kenney: Listen, Alberta is in real trouble right now. We’re in a deep recession that’s being made worse by ideological policies by this NDP government, which got elected almost by accident with two free enterprise parties splitting the vote right down the middle in the last election. And most free enterprise Albertans don’t want to risk that a second time. Two recent polls indicate about 80 per cent of Wildrose and Progressive Conservative voters in Alberta would like to see them come together in one party like we did federally back in 2003. There’s three other candidates running for the PC leadership. They’re all good people for whom I have respect, but they have a different view. They think we should maintain the current division in Alberta politics and they’re prepared to risk that second NDP term that I’m not prepared to risk.

Vassy Kapelos: I guess I wanted to ask you though because I remember when I worked in Alberta before the New Democratic Party formed the government in Alberta, political parties on the right definitely couldn’t get on the same page. They were really deep divisions. What makes you think you can, not just unite them and keep the right together, but do that in order to win the provincial election?

Jason Kenney: Well things have changed pretty dramatically since the election of the NDP. It’s really raised the stakes. Quite frankly, very few Albertans, and myself included, thought it was possible that the NDP could win, which is in a way why they’re called an accidental government. I mean they won legitimately but many people went to the polls casting a protest vote which they thought was going to result maybe in a PC or Wildrose minority, never they thought an NDP majority. But here we find ourselves with a government that just imposed the largest tax in Alberta history that has raised income and business and provincial property taxes that were going to help the federal Liberals raise the payroll taxes, massive new regulations attacking entire industries. And all of this is adding fuel to the fire of one of the worst recession in our history. So that’s really concentrated people’s attention. And secondly, the Wildrose and PC parties are actually not separated on any policy issues any longer. They’re voting together identically in Alberta’s legislature 90 per cent of the time. The other 10 per cent are not major issues. They’re voting for each other’s amendments 100 per cent of the time and there’s no major issue on which they disagree. Eighty per cent of their grassroots say it’s time to bury the hatchet. We did it federally. They’ve done it in Saskatchewan with the Saskatchewan party. So I’m really proposing a kind of reconstitution of the coalition that existed here pretty successfully for decades under the leadership of people like Peter Lougheed and Ralph Klein before it fractured.

Vassy Kapelos: What about internal tension within the party? How much of it is there? I know that there was a very senior PC member working on your campaign who was suspended by the party and senior party members according to some reporting appear to want to prevent you from becoming the party leader because of your desire to unite-the-right, so how bad is it?

Jason Kenney: Well, it’s been awkward. There’s no doubt that there have been some people who are in senior positions in the party who would rather that my campaign did not exist. They’d just rather go it alone and pretend that the unity issue is not being debated by Albertans every day. And they’d like to disregard the fact that over 75 per cent of grassroots PC supporters and voters want unity. So unfortunately, I think amongst some small subset of people, they look at the party more as a club and an organized act of nostalgia. But quite frankly, I am what management theorists would call a bit of a disruptive force in that respect. I’m trying to challenge that as a vehicle for grassroots sentiment, people who are not prepared to tolerate the risk of a second NDP term to perpetuate a division between two parties in which there is no major policy disagreement. So there have been some, I’ll call them peculiar rules and rulings in the course of this campaign but we’re not being distracted by those because I just want to stay focused and on frankly, getting the mandate at the PC convention on March 18^th to pursue and achieve unity. And so far, it’s going very well. We believe we’ve elected over 80 per cent of the delegates, notwithstanding some rules that we consider unreasonable.

Vassy Kapelos: Did you expect the pushback though from party brass when you entered into this?

Jason Kenney: I did actually. We factored that in. I priced that in and there’s been really some real open hostility from some of those folks. But they really don’t represent the grassroots, and if they did, our campaign wouldn’t be successful today.

Vassy Kapelos: I wanted to also ask you about policy. I know that you want to repeal a price on carbon and unite-the-right. What other specific policy measures though should Albertans expect from you if you are successful in your bid for the leadership?

Jason Kenney: Sure, just one clarification. I’ve never actually called it unite-the-right because I just think that’s too narrow of a construction.

Vassy Kapelos: I guess just really quickly if you could isolate a couple of things beyond getting rid of the price on carbon that you would bring in?

Jason Kenney: So really job number one for a united free enterprise government would be economic growth and that would begin with restoring investor confidence which would mean sending a clear signal both substantively and symbolically that Alberta is open for business again. It’s not to repeal many of the job killing regulations, to demonstrate we’re not going to fiddle with the royalties, to get our tax rates back down to being amongst the most competitive in North America. We’ve gone from some of the lowest to some of the highest tax rates in North America. That will require getting our fiscal house in order.

Vassy Kapelos: Before we go, I wanted to ask you about the race in your former federal party. Have you decided who you’re going to support and what do you make of some of the divisions that are going on within the party and within the leadership candidates and especially the entrance of Mr. O’Leary?

Jason Kenney: Well I must confess I’m surprised there are so many candidates in the race and I wish them well. I’m not going to be endorsing anybody because I have to obviously be focused on my own challenge here in Alberta. But, you know Kevin is obviously going to bring some colour, flare and attention to the race. And I think he’s got an interesting perspective. I have said this though consistently that I think in Canada, the head of a national party aspiring to be prime minister has to be able to speak both of our official languages. You can’t have a leader who can’t speak to over a quarter of Canadians. So I think a functional bilingualism or fluency frankly, in both languages is a basic condition of being taken serious as prospective prime minister.

Vassy Kapelos: Thanks very much for joining us, Mr. Kenney. Good luck with the race.

Jason Kenney: Thanks very much, my pleasure.

Vassy Kapelos: That is our show for today. We’re always eager to hear from you. You can find us online at www.thewestblock.ca. You can also reach us on Twitter and Facebook. Thanks so much for joining us today. I’m Vassy Kapelos. See you back here next week.