Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Kevin O'Leary speaks during a session entitled ‘If I run here's how I'd do it’ during a conservative conference in Ottawa Friday, February 26, 2016.


Conservative leadership candidate Kevin O'Leary is getting bad press for his apparently heretical view that Ottawa might use its power to get provinces to pursue (in his view) sensible economic policies. Particular ire has been reserved for his idea that transfers from Ottawa might be withheld from provinces that don't follow the O'Leary script.

Harrumphing commentators opine that this is not how we do things in Canada, and that Mr. O'Leary clearly doesn't understand the Constitution, federal-provincial relations, provincial sovereignty, the second law of thermodynamics and possibly quantum computing. Subtext: he must be an idiot.

For all I know he may be, although I suspect not. But if he is, it is not because he defends the idea that a powerful federal government was always at the centre of our founders' vision for the country. One of the chief justifications for that power was that the new nation needed a centre with legitimacy that spoke for the entire country, overcoming the parochial navel-gazing of the provinces, especially on economic matters.

Story continues below advertisement

One former prime minister, when faced with the obdurate foot-dragging of the provinces, famously asked, "Who speaks for Canada?" The Constitution eloquently replies: "There shall be one parliament for Canada."

And that parliament and the governments to which it gives rise were endowed with myriad powers designed to underline its central economic vocation, such as the trade and commerce clause, the common market clause and the ability to unilaterally designate any infrastructure as federal because it benefited Canada as a whole. Even the general philosophy behind the difference in powers given to provinces and Ottawa speaks volumes. Ottawa is there to provide for the "peace, order and good government" of the country. By contrast, the provinces were given jurisdiction over "all matters of a merely local or private nature."

Out of this weak hand and a lot of political belligerence, the provinces – with Ottawa's shameful connivance – have now brought us to the point where we look to them, not Ottawa, to remove the barriers they have created to free trade within the country. Premiers arrogate to themselves the right to approve pipelines that fall under federal jurisdiction, and one former (federalist) premier of Quebec can dismiss Ottawa as basically an irrelevant relic.

So not only is there plenty of constitutional ammunition for Mr. O'Leary to draw on in asserting a leadership role for Ottawa on the economy, his call to look at other pressure points than federal legislative power is also entirely defensible.

Many of the same people who find Mr. O'Leary's idea of withholding federal transfers from provinces over economic policy disagreements risible are the very people who leap to the barricades to defend Ottawa's unilateral right – nay, duty – to withhold those very transfers should a province dare to contravene the Canada Health Act. Yet health care is indubitably a provincial jurisdiction, while the power to create and sustain a national economy that generates national prosperity properly belongs in Ottawa.

Remember that, bar equalization, nothing in the Constitution requires Ottawa to transfer money to the provinces, and even the language on equalization gives the feds huge latitude on the size and design of the program. Yes, recent practice has allowed provinces to escape federal conditions on new transfers and get the money anyway, but who made this holy writ? Our attempts to write it into the Constitution have consistently failed. It is no victory for federalism or the economy that we therefore sneak it in the back door.

Suppose, then, that an O'Leary government is elected promising to make deep tax cuts to stimulate the economy, but the provinces simply raise their taxes by a similar amount. It has happened before, turning federal tax cuts into unintended increases in transfers to the provinces. Mr. O'Leary's critics would have you believe that despite Ottawa voluntarily giving the provinces, on average, one out of every five dollars they spend each year, it is inconceivable that he might use that money as leverage to rein in their bad behaviour.

Story continues below advertisement

Or suppose that Ottawa finds many provincial and municipal policies are causing the supply of new housing to dry up, contributing to a bubble and closing off access to the middle class for many. Should Ottawa just ignore the fact that the provinces are clamouring for billions in federal infrastructure and "affordable housing" funding which might be used in part to reward those that support sensible housing policies and – heaven forfend – punish those whose policies harm Canadians?

Mr. O'Leary's tone, of course, is another matter. Perhaps it is not helpful to attack individual premiers or ruminate about "coercing" the provinces. That probably runs counter to one half of what is arguably the winning formula in herding the provinces toward better economic policy: speak softly. But the other half? Carry a big stick.

Brian Lee Crowley ( is the managing director of the Macdonald-Laurier Institute, an independent non-partisan public policy think tank in Ottawa:

Want to interact with other informed Canadians and Globe journalists? Join our exclusive Globe and Mail subscribers Facebook group

The Globe's John Ibbitson makes predictions on the Conservative leadership race and says the party needs to choose between sticking to Stephen Harper's values or that of U.S. President Donald Trump
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies