Kevin O’Leary says Justin Trudeau’s Liberals have squandered Canada’s vast economic potential, and that it’s time for wholesale change within the federal government.
In an interview with BNN Bloomberg on Tuesday morning, the Canadian businessman said that Canada’s abundance of natural resources make it one of the richest nations on earth, but political leaders have done a poor job managing the country’s wealth.
“We’re such a wealthy country, and we are so poorly managed from a policy basis,” he said.
“When I think about the tremendous potential the country has in natural resources, which was the essence of its success over the last 200 years – we’ve ignored it.”
O’Leary said that the current federal government has instead focused on things that “have nothing to do with our core wealth,” adding that he “can’t help but blame Justin Trudeau for the last decade.”
“He’s a weak manager, in my opinion. A very successful politician, but a very, very weak manager,” he said.
O’Leary made a brief foray into politics himself during Trudeau’s first term, entering the race to become the leader of the federal Conservative Party in January of 2017.
However, he dropped out a few months later, saying he didn’t think he would garner enough support in Quebec to beat Trudeau in a 2019 election, and officially endorsed Maxime Bernier, who lost his leadership bid narrowly to Andrew Scheer.
Foreign investment, capital gains
O’Leary argued that Canada should be attempting to lure foreign investment from corporations and sovereign wealth funds in order to inject jobs and capital into the Canadian economy, but current policies make investing in the country unattractive.
“We’ve done a very poor job of that and we’ve made the policy so poor in terms of attracting capital for these massive projects that they just don’t come anymore,” he said.
“Our own pension plans go and invest in natural resources outside of Canada. It’s just shameful. It’s a real problem… I’m hoping there will be a change in policy in this country because I would love to invest more in it, I just find it impossible to do so.”
When it comes to taxation, O’Leary said the proposed change to Canada’s capital gains tax, which officially came into effect on Tuesday, is “an absolute mistake.”
“When you mess around with corporate tax rates, corporations are not people, they can move. Structures can move, and they will,” he said.
“They’ll contort themselves if all of a sudden they find a path of least resistance somewhere else.”
Jamie Golombek, managing director at CIBC Private Wealth, told BNN Bloomberg in a Tuesday interview that for most individuals, the increase to the capital gains inclusion rate won’t impact their finances.
“For the average Canadian, this will not make any impact, whatsoever,” he said.
“You have to have over $250,000 of annual capital gains for this to actually impact you… a capital gain is the difference between the selling price of something and the cost. So typically a stock price; the proceeds plus the cost base is your capital gain.”
But O’Leary said that from a business perspective, the changes will negatively impact Canada’s ability to compete with other G20 nations for investment dollars, adding that it’s a fundamental policy misstep by Finance Minister Chrystia Freeland.
“I want to respect Freeland because she is the finance minister, but I don’t know why she’s the finance minister. She has no experience at this. She’s never even run a bank… I don’t know why she’s there,” he said.
“The damage she’s doing now will be felt, if it doesn’t get repaired immediately, for decades. Bad managers do a lot of damage, and she is a very bad, underqualified manager.”
Leadership change
O’Leary said that he’d like to see new elected leaders take control of Canada’s finances in order to help the country become more prosperous and competitive.
“Justin Trudeau and his cabinet have been very successful in terms of longevity, but I really believe this to be true: Canada, if you look at resources per capita, is one of the richest countries on earth, run by idiots,” he said.
O’Leary compared Canada’s approach to managing its abundance of natural resources to that of Norway’s – another major oil exporter.
He said the Scandinavian country used and contributed to its sovereign wealth fund wisely over the years, growing it to one of the largest in the world, and making Norway one of the richest nations per-capita in Europe.
“(Canada) desperately needs leadership that understands the potential of the country and what to do in terms of putting the right people in cabinet positions,” he said.
“We have unqualified, weak managers, and I mean no disrespect, but I wouldn’t let them run a bodega… I think a lot of people feel this way about this country: so much potential, so squandered (with) weak leadership. Let’s change it.”
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