The National Telegraph - Wyatt Claypool - January 24, 2025


Why won't Pierre Poilevre touch Equalization？ (Political capital explained)


Episode Stats

Length

13 minutes

Words per Minute

186.83658

Word Count

2,429

Sentence Count

122

Misogynist Sentences

5

Hate Speech Sentences

4


Summary

In this episode, I discuss the concept of political capital and why Pierre Polyev is unlikely to tackle equalization reform when he becomes Prime Minister of Canada in the next election. I also talk about why it's a good thing we don't have to wait for another election cycle to get the issue addressed.


Transcript

00:00:00.000 Hey guys, Wyatt Claypool here. There's a good issue floating around out there in Canadian
00:00:05.720 politics right now that gives me the opportunity to talk about the issues of how politics works
00:00:11.780 as well as the concept of political capital. Since I'm from Alberta, I naturally saw a lot
00:00:17.840 of Albertan conservatives annoyed that they saw that federal conservative party leader
00:00:22.520 Pierre Polyev says he's not going to be touching equalization when he becomes prime minister.
00:00:27.580 I know many of them are saying, well, it's so unfair, how could he not touch it? And I agree,
00:00:32.940 equalization is absolutely unfair. The problem is that Pierre Polyev, even when he becomes prime
00:00:39.300 minister, even if he has a majority government of like 240 seats, even he is hemmed in by how much
00:00:47.000 political capital he has. Donald Trump has a big mandate in the US after winning his second
00:00:53.600 non-consecutive term for president. But even he isn't going to be touching entitlement reform
00:00:59.060 because there's so much energy, so much rhetoric that you have to put towards that issue to bring
00:01:04.620 people on side to get anything done on it, that it is going to operationally exhaust you in tackling
00:01:10.740 other issues. That is the same thing that Polyev is having to deal with in Canada, looking forward
00:01:16.620 to his future prime ministership. And he's probably going to be prime minister at this point. It's
00:01:20.780 basically guaranteed, unless you believe Frank Graves and Ecos, who now think the liberals and
00:01:26.100 conservatives are within five points of each other, and the liberals are having a big surge.
00:01:30.480 Frank Graves is a liberal hack. He obviously hates Pierre Polyev personally, and I think that's what's
00:01:35.120 motivating his terrible polling right now. But I digress. Polyev wants to get things done like bail
00:01:41.920 reform, or at least ending the liberals' bail reform, actually having real justice in this country again.
00:01:47.440 He wants to reduce overall taxes. He wants to get rid of the carbon tax. That's an easy one to do
00:01:52.400 because so many people are against it at this point. He wants to do heavy regulation cuts. He wants to get
00:01:56.940 pipelines built. He wants to rebuild the military. He wants to do a lot of things. There's probably more
00:02:02.440 than two dozen major pieces of policy that the conservatives need to get done in four years.
00:02:08.100 And while the parliamentary system in Canada allows you to move faster than the president usually can in
00:02:13.940 the U.S., even Polyev, if he tried to tackle something like equalization, immediately all the
00:02:20.060 media's attention, all of his time in terms of talking about policy and justifying his government's
00:02:26.520 stances and agenda is going to be eaten up by talking about equalization. Because as much as we
00:02:33.500 hate equalization, rightfully so here in Alberta, and now the Newfoundlanders are also growing to hate it
00:02:39.320 really bad. I guarantee probably people in Saskatchewan and British Columbia don't care as much because
00:02:44.620 they don't pay as much into it in terms of the net loss they have on their tax dollars when they
00:02:49.600 give them to the federal government. The problem is that I would rather wait until a second Polyev term
00:02:57.020 when people are making median another $4,000 a year. People are better off. We have more social
00:03:04.220 stability in the country. We've reduced immigration. We've made sure that temporary foreign workers and
00:03:08.920 students aren't just hanging out after their visas expire. At that time where people are better off,
00:03:15.320 they're happier, that is when you can get the mandate to reform equalization. Because if more of
00:03:21.540 the provinces are have provinces because our top marginal income tax rate has fallen to this 25%,
00:03:27.600 not 33%, our business tax rate has gone from 18 to 13 or 18 to 14, there will be way more bandwidth,
00:03:35.000 way more political capital for Polyev to spend on something like equalization. In fact, as Canadians
00:03:41.620 are happier, the amount of price he has to pay in order to actually get equalization reform done
00:03:47.840 is going to go down. Voters, depending on how they feel about an issue across the country, and sometimes
00:03:54.540 it depends on the region, can kind of discount the amount that you actually have to push on an issue
00:04:00.240 to get it done. Something like the carbon tax, something like reforming just like the bail,
00:04:07.060 getting rid of same-day automatic bail, that's going to cost Polyev. Let's say he has 100 points
00:04:12.040 of political capital when he enters office for his first term. Those two things are going to cost him
00:04:17.360 like two or three points in this theoretical world. Getting something done like major regulation reform,
00:04:24.080 getting a pipeline built between Alberta and Eastern Canada, Energy East, that's going to take
00:04:29.400 like 25 points, because there's going to be a lot of political maneuvering, a lot of deal-making,
00:04:34.740 a lot of the use of Polyev's bully pulpit, all coming to bear on making sure Francois Legault,
00:04:41.380 or whoever the Quebec premier is at that point, is actually getting this deal done, is actually
00:04:46.420 approving the pipeline. Getting rid of a lot, like making better land deals with indigenous,
00:04:53.560 indigenous groups, indigenous like tribal councils, that is going to take a lot of political capital
00:04:59.920 from the Polyev government to reform the way they work with indigenous groups to actually get
00:05:04.560 pipelines built. Getting the military spending increased, that is going to take a lot of political
00:05:09.760 capital, because at the same time as Polyev's trying to reduce taxes and spending, increasing that
00:05:15.320 spending is going to take a little bit more justification, because he's going to get a lot of fire from
00:05:19.280 the media. Why are you spending more money on the military at the same time you're cutting universal
00:05:24.260 dental? That's another thing. Cutting a lot of the liberal programs is probably going to take 30 points
00:05:29.520 of political capital, because as much as these programs are useless, we don't need them at all.
00:05:36.680 People don't like spending being cut naturally, even though polls show 62%, 63% of Canadians think we
00:05:43.860 spend too much. When you start cutting, everyone starts becoming a critic. Well, why are you cutting
00:05:48.720 that? Why aren't you cutting this? Every piece of spending that you cut is going to affect somebody.
00:05:54.320 That doesn't mean we shouldn't cut. I think we should aggressively cut. In fact, if you move faster,
00:05:59.640 it makes it so that the public reaction, the media reaction, is more truncated, and they don't have time
00:06:05.400 to sort of fear monger over every single dollar being reduced. If you just get in and you say,
00:06:09.840 okay, we're restricting universal dental to seniors, we're restricting pharma care to like people living
00:06:15.860 below the poverty line, and we're just getting rid of the housing accelerator program, immediately you
00:06:20.960 have saved billions of dollars, and all the anger is going to be within like two weeks, and you can
00:06:25.840 move on. Oftentimes, politicians are just not good at sticking through negative press. The one thing
00:06:32.760 that somebody like Ralph Klein was amazing at was that he understood that he would have to be hated for a
00:06:39.420 year, for two years, for three years to get certain things done, to get the balance of the budget
00:06:44.600 balance to get into a surplus to pay down the debt. He was going to have to have a lot of protesters on
00:06:49.100 his lawn. He was going to have to have a lot of negative reports in the media. But if he kept
00:06:53.140 pressing on the average middle class voting taxpayer was going to say, you know what, I get it. I get
00:06:59.020 why he did that. Good. Thank you, Ralph. That's why Ralph was unbeatable. He understood the political
00:07:05.440 capital he would need to spend to get something done that would then on the other side make people
00:07:10.160 like him more. If you overspend your political capital, that's where I would say you become like
00:07:16.520 Blaine Higgs. He was doing great things for the New Brunswick economy. Probably was moving too fast or
00:07:22.540 didn't have enough, you know, I guess in this theoretical world, he didn't have enough pillows
00:07:27.720 around the floor to cushion people's fall when he was cutting useless services and the fear-mongering
00:07:33.740 was going to hit him. He probably should have also cut taxes because then people would see the
00:07:38.520 benefits right away to themselves and they would better understand the fiscal conservative
00:07:42.980 program that Blaine Higgs was running. He ended up losing it. I think it was because he did a really
00:07:48.780 good job on public finance, but people were criticizing for that, but he never made people's
00:07:53.540 personal finances catch up at the same speed. So people looked at it like, look at this cruel man
00:07:59.080 cutting the provincial budget while I'm not getting ahead. Probably should have done the same
00:08:03.280 two things, those two things at the same time. I thought he was a great premier. Really sad that
00:08:08.020 he's no longer the premier of that province. He was great on parental rights, social issues, fiscal
00:08:12.660 issues, just should have cut the HST, should have cut income taxes a year before the election. You don't
00:08:18.780 wait until the election to say that you'll do it if they re-elect you. You gotta do it beforehand.
00:08:24.060 This is the same thing I say about Premier Smith. And I know people are like annoyed with me when I
00:08:30.520 say I went to the AGM and I voted no on her leadership review. I voted no because there's
00:08:34.880 no way of me saying she's doing a six out of 10, seven out of 10 job, room for improvement. And
00:08:40.640 because I know so many people are going to vote yes, certain people need to vote no to show there is
00:08:45.380 room for improvement. You don't deserve 100%. You don't deserve like 100% mandate from your base.
00:08:51.180 You need to cut taxes. You need to cut spending. The problem for Smith right now in Alberta is I find
00:08:57.480 that she's using a lot of her political capital to get big spending projects done, to spend on like
00:09:04.260 building a train or building an arena or doing something like that. And I find that she's going to
00:09:09.500 run out of room in the next couple of years where she can't cut taxes. She can't cut spending to be able
00:09:14.540 to cut taxes. She can't balance the budget if oil prices go down. And then we're going to be in a bit
00:09:20.000 of a conundrum when we're running against Nahid Nenshi as the Alberta NDP leader who the UCP has been
00:09:25.460 labeling as a tax and spend liberal. But on the other side, we look like hypocrites. We've been
00:09:30.960 spending too much. We've not actually cut people's taxes. So how are we supposed to call Nenshi a tax
00:09:36.280 and spend liberal when we're basically maintaining the same tax rates that the NDP had brought in back
00:09:41.620 in 2015? You know what? It kind of looks bad. And so that's where Pierre Polyev, I understand
00:09:47.500 why in a first term, he wants to get a lot of these small and medium sized issues dealt with that he can
00:09:54.820 do a lot with rather than tackle equalization right away in which only certain people in Alberta really
00:10:02.740 rank that as like one of their top five issues. People in Alberta are still going to name just federal
00:10:07.800 taxes, federal spending, you know, inflation, crime, all that sort of thing. Those are going to be their
00:10:14.600 top issues. Equalization is not going to hit like high for many people outside of rural Alberta.
00:10:22.380 And so right now, if Polyev entered government in my theoretical model where he has 100 points of
00:10:26.900 political capital to spend, I would say equalization would cost him 75 of those points. It would basically
00:10:33.300 be the thing he would be having to deal with for two years, getting it done. And even then,
00:10:38.040 there would probably be court challenges. Maybe the Supreme Court packed with liberals would say,
00:10:42.280 no, equalization is actually the law of the land. It's actually charter, like we are bound by the
00:10:48.240 charter to equalize the provinces. And by the way, I really knocked the desk there. By the way,
00:10:54.380 equalization isn't in theory bad. In the US, Arkansas tends to get more federal dollars per capita
00:11:01.100 than somewhere like New York City, or just New York in general, or Texas. Big states tend to get fewer
00:11:08.360 federal dollars per capita than somewhere like Wyoming, than somewhere like Idaho, like states
00:11:14.560 with smaller economies, with less powerful economies tend to get a bit more money. Equalization in Canada
00:11:20.680 is terrible, because the formula basically makes it so that provinces like Quebec, provinces like many of
00:11:27.560 the Maritimes, except for Newfoundland are all incentivized to be broke. They're incentivized not
00:11:34.000 to grow their economies to keep their taxes and regulations high. And they get more federal transfer
00:11:39.100 payments if they do that. That's the main thing in equalization that needs to be changed. Equalization
00:11:44.220 doesn't even need to necessarily go away, because I understand none of us never going to be able to
00:11:48.340 actually pay for its own healthcare system unless the rest of Canada pitches in. Same thing in PEI,
00:11:53.700 it's hard to justify having a higher social service spending in those provinces with low populations,
00:12:00.140 with specifically older populations. I get it. It's just the current system is making it so that
00:12:05.940 the populations keep getting older because younger people in PEI keep going elsewhere because the
00:12:11.360 economy sucks because the government makes it that way because they get more money to make it that way.
00:12:15.760 That's the real thing we need to reform. And I get it. It's unfair, but we might have to wait a
00:12:21.180 little bit. We might have to build up our political capital and make the case for people on why
00:12:26.420 equalization needs to go after we've made them better off first. But anyways, that should be it
00:12:33.020 for me today, guys. Let me know your thoughts on how Polyev should conduct himself in his first term.
00:12:39.220 Remember to like this video, subscribe to the channel, and to all my Alberta viewers, my fellow
00:12:44.700 Albertans, equalization sucks. But sadly, we'll probably have to suck it up for at least four
00:12:50.240 more years. At least we'll all be better off if Polyev does the right things on federal policy first
00:12:56.100 and then moves on to it. But anyways, see you guys later.