Canada’s Role in a Shifting Global Order — with Mark Carney | Prof G Conversations

00:47:34
https://www.youtube.com/watch?v=V11qNDDElZw

概要

TLDRIn this in-depth conversation, Canada’s Prime Minister Mark Carney addresses the current geopolitical climate, focusing on U.S.-Canada relations amid shifting trade dynamics and tariffs. He emphasizes the need for Canada to reinforce its trading relationships with like-minded countries and improve internal trade barriers. Carney outlines a plan to tackle major issues like housing supply and climate action, while also mitigating the impacts of U.S. tariffs that have caused strain in their economic partnership. The Prime Minister expresses hope for a redefined relationship with the U.S., enhancing collaboration in a changing global order.

収穫

  • 🌍 Canada is shifting focus towards like-minded countries due to U.S. trade policies.
  • 🏠 Major housing reforms are essential to address affordability and supply in Canada.
  • 🚀 Canada aims to become an energy superpower while investing in climate-resilient technologies.
  • 🔗 Stronger regional trade agreements are being prioritized.
  • 📉 U.S. tariffs create risk premiums affecting U.S. assets and global economics.
  • 🤝 A desire for deeper international security and economic relationships is evident.
  • 💼 Canada's trading practices are evolving to mitigate the impacts of U.S. tariffs.
  • ⚖️ The sentiment in Canada indicates feelings of betrayal by the U.S.
  • 🌐 The interview highlights the need for coherent U.S. policies to restore trust with allies.
  • 🔮 Future economic scenarios involve greater domestic focus and collaboration with other countries.

タイムライン

  • 00:00:00 - 00:05:00

    The discussion highlights a growing risk premium on US assets, which raises questions about the stability and coherence of the emerging global economic system. There is a consensus among nations, especially like-minded ones, that they need to deepen trading and security relationships while recognizing the shifting dynamics of international order.

  • 00:05:00 - 00:10:00

    The speaker provides their backstory, detailing their upbringing in Canada and extensive career in finance and governmental roles, emphasizing their experience during the 2008 financial crisis and their leadership roles in major banks. They eventually became the Prime Minister of Canada, seeking to handle pressing national issues.

  • 00:10:00 - 00:15:00

    The Prime Minister identifies key issues facing Canada, such as improving internal free trade among provinces, addressing a housing crisis, and re-establishing economic and security relationships with nations outside the United States. These priorities illustrate a proactive agenda aimed at fostering economic cooperation and security.

  • 00:15:00 - 00:20:00

    The dialogue shifts to tariffs, particularly how they strain US-Canada relations. The Prime Minister details the adverse effects of US tariffs on Canadian goods, asserting a need for negotiations post-elections to restore balanced trade relationships and signify a commitment to mutual economic benefit.

  • 00:20:00 - 00:25:00

    The conversation notes a heightened motivation among nations to establish new trading relationships, given uncertainties with the US. Canada seeks to reinforce connections with other G7 countries, while examining trade deals and security arrangements with like-minded partners to alleviate reliance on the US, amid ongoing trade tensions.

  • 00:25:00 - 00:30:00

    The leaders in the G7 and G20 are confronting the end of the previous global order, largely anchored by US policies. There is speculation about future trade dynamics, especially in terms of achieving a semblance of cooperation versus isolationist tendencies, prompting deeper internal discussions about the nature of international alliances and trade agreements.

  • 00:30:00 - 00:35:00

    With ongoing tariffs and broader trade issues, the Prime Minister speaks to the Canadian perspective on US leadership. Reflecting on historical agreements, he emphasizes a need for compromise and strategic partnerships while navigating political challenges that arise from changing US policies.

  • 00:35:00 - 00:40:00

    The interview delves into structural economic issues within the US, including income inequality and a lack of social cohesion. The Prime Minister draws parallels between Canada's and the US's economic challenges, indicating a focus on equitable growth while recognizing the necessity of diversity and skilled labor development for future workforce needs.

  • 00:40:00 - 00:47:34

    Amid discussions on climate change and energy, the Prime Minister expresses a commitment to sustainable development through innovative housing solutions and clean energy initiatives. This comprehensive approach aims to position Canada favorably in the global market while enhancing social equity through housing reforms and environmental responsibility.

もっと見る

マインドマップ

ビデオQ&A

  • What are the main challenges Canada is facing under the new leadership?

    The three biggest issues include achieving free trade within Canada, addressing the housing crisis by doubling housing production, and redefining Canada’s trading relationships beyond the U.S.

  • How does Canada plan to manage its housing crisis?

    By cutting development charges, incentivizing construction through federal funding, and promoting innovation in building methods.

  • What is Canada's strategy towards climate action?

    Canada aims to balance its energy wealth while investing in green technologies and promoting competitiveness in climate-smart sectors.

  • What is the general sentiment in Canada towards U.S. leadership?

    Many Canadians feel betrayed by U.S. tariffs and actions impacting sovereignty, resulting in a strained relationship.

  • How does Canada intend to deepen trade with other nations?

    Canada plans to strengthen ties with like-minded countries and explore new trading partnerships, especially in critical minerals.

  • What are the expected economic impacts of U.S. tariffs on Canada?

    The tariffs are likely to create a strained trading relationship and impact sectors that rely heavily on integrated supply chains.

  • How does Prime Minister Carney view the current U.S. commercial policy?

    He perceives it as a move towards more protectionism, which complicates trade dynamics and affects global supply chains.

ビデオをもっと見る

AIを活用したYouTubeの無料動画要約に即アクセス！
字幕
en
オートスクロール:
  • 00:00:00
    is that the sense you get that nations
  • 00:00:02
    are lining up to cut a deal with us
  • 00:00:04
    right now there's a risk premium in US
  • 00:00:06
    assets that wasn't there before Uh and
  • 00:00:09
    the question is how big is that risk
  • 00:00:11
    premium going to set where is it going
  • 00:00:12
    to settle um and uh and that in part is
  • 00:00:16
    going to depend on how coherent the new
  • 00:00:19
    system is You know and and is there does
  • 00:00:23
    the US credibly commit to a new system
  • 00:00:26
    or a series of deals i do believe that
  • 00:00:28
    there are a series of like-minded
  • 00:00:31
    countries We very much like the US to be
  • 00:00:33
    part of that group but like-minded
  • 00:00:35
    countries who will develop deeper
  • 00:00:36
    trading and security relationships as a
  • 00:00:38
    consequence of this Uh it's the world of
  • 00:00:41
    second best It's not what we would all
  • 00:00:43
    want but it's the logical thing to do
  • 00:00:51
    Prime Minister where does this podcast
  • 00:00:52
    find you i'm in Montreal right now
  • 00:00:54
    professor The majority of the world
  • 00:00:56
    spends their news is 10 minutes uh
  • 00:00:59
    domestic and 20 minutes international In
  • 00:01:01
    the US we're kind of self-absorbed
  • 00:01:03
    narcissistic We don't talk a lot about
  • 00:01:04
    other countries I think most people have
  • 00:01:07
    heard of you have seen you on TV but
  • 00:01:09
    don't know much about you Can you give
  • 00:01:10
    us sort of your backstory your origin
  • 00:01:12
    story sure Um so I was born u in the
  • 00:01:16
    Arctic uh the north of Canada place
  • 00:01:18
    called Fort Smith Northwest Territories
  • 00:01:20
    I grew up in Edmonton and uh those who
  • 00:01:22
    might follow hockey was the days of
  • 00:01:24
    Wayne Gretzky when he was playing for
  • 00:01:25
    the Oilers That was when I was a kid Uh
  • 00:01:27
    I went away to university in the US Uh
  • 00:01:29
    and then um and then I worked on Wall
  • 00:01:31
    Street or versions of Wall Street I
  • 00:01:33
    worked for Goldman Sachs and London and
  • 00:01:34
    Tokyo and New York and ultimately Canada
  • 00:01:37
    And then I went in about 20 years ago to
  • 00:01:39
    become the deputy governor of the Bank
  • 00:01:41
    of Canada which is the equivalent of the
  • 00:01:43
    Federal Reserve in the US Uh and ended
  • 00:01:45
    up being the governor during the
  • 00:01:46
    financial crisis of 2008 Um so worked
  • 00:01:50
    with you know through that process of
  • 00:01:52
    the financial crisis We had a quote good
  • 00:01:55
    financial crisis if you can have a good
  • 00:01:56
    financial crisis in Canada We got
  • 00:01:58
    through it better than anyone else
  • 00:02:00
    emerged stronger Our bank stayed
  • 00:02:01
    together uh and then ultimately I kind
  • 00:02:04
    of slightly bizarrely um I was asked to
  • 00:02:07
    uh become governor of the bank of
  • 00:02:09
    England So I became the first foreigners
  • 00:02:10
    governor of the bank of England and I
  • 00:02:12
    did that through the period of the
  • 00:02:13
    Brexit referendum as it turned out and
  • 00:02:15
    in the aftermath of that and then came
  • 00:02:17
    back
  • 00:02:18
    Canada 2020 right in the middle of uh co
  • 00:02:22
    you had a I think you probably had a
  • 00:02:23
    better experience during CO if I
  • 00:02:25
    listening to your podcasts if I read it
  • 00:02:27
    correctly than I did and then I worked
  • 00:02:29
    uh I worked did a lot of work on climate
  • 00:02:31
    change for the United Nations sort of
  • 00:02:33
    pro bono and organizing the financial
  • 00:02:35
    sector to help address climate change uh
  • 00:02:37
    but also at the same time I worked for
  • 00:02:39
    Brookfield which is a big asset manager
  • 00:02:41
    Uh and I was chair of Bloomberg Um and
  • 00:02:43
    then as of the start of January uh I
  • 00:02:47
    first ran for the leadership of the
  • 00:02:48
    Liberal Party which is uh one of the
  • 00:02:50
    main parties here and uh winning that
  • 00:02:53
    became prime minister about a month ago
  • 00:02:55
    Uh and now I'm running for election We
  • 00:02:57
    have much last point much shorter
  • 00:02:59
    elections than the United States Uh our
  • 00:03:01
    campaign is 37 days and we've got two
  • 00:03:03
    weeks roughly left to go
  • 00:03:06
    So a big friend of the pod is Ian Brener
  • 00:03:08
    the geopolitical strategist and he was
  • 00:03:10
    on the pod last week and he described
  • 00:03:12
    you as a open quote generational mind
  • 00:03:15
    for Canada on the global stage close
  • 00:03:17
    quote in your view what role does Canada
  • 00:03:22
    play on the global
  • 00:03:24
    stage so we play I mean we play several
  • 00:03:27
    roles Um we're a member of the G7 In
  • 00:03:29
    fact we are chair of the G7 uh this year
  • 00:03:32
    So I'm chair of the G7 uh we're a member
  • 00:03:35
    of the Commonwealth which is the old uh
  • 00:03:37
    UK grouping Um we're me member of the
  • 00:03:39
    franophhone which is the obviously the
  • 00:03:41
    franophhone grouping of about uh 60
  • 00:03:43
    countries So we we have our role in
  • 00:03:46
    several uh different let's call it
  • 00:03:48
    organizations self-appointed
  • 00:03:49
    organizations or groupings I think one
  • 00:03:51
    of the roles we play potentially in the
  • 00:03:54
    new or the emerging uh global order is
  • 00:03:57
    partly based on you know our assets Uh
  • 00:04:00
    we are uh an energy an emerging energy
  • 00:04:03
    superpower in all forms of energy Uh
  • 00:04:05
    we're one of the largest critical
  • 00:04:07
    mineral suppliers in the world We're
  • 00:04:08
    we're pretty good in AI A lot of people
  • 00:04:10
    claim that We're you know but we're I
  • 00:04:12
    think legitimately claiming that And so
  • 00:04:15
    we can play a role as a country that
  • 00:04:17
    believes in open open markets open
  • 00:04:19
    systems believes in trade open ideas
  • 00:04:23
    diversity we can play a role with
  • 00:04:25
    like-minded countries uh to kind of
  • 00:04:27
    reconstruct that bit of that bit of the
  • 00:04:30
    international order which has been uh
  • 00:04:32
    I'm in Montreal they would say bulver
  • 00:04:35
    like it's been upended uh in the course
  • 00:04:37
    of uh more intensively in the last few
  • 00:04:39
    months but uh a process that really
  • 00:04:42
    began with the financial crisis 15 years
  • 00:04:44
    ago and just for our listeners the
  • 00:04:46
    elephant in the room is tariffs I'm
  • 00:04:47
    going to get to that but I want to start
  • 00:04:49
    with if if you were to so typically In
  • 00:04:53
    the US and I imagine the same way in
  • 00:04:54
    Canada when a new leader is elected
  • 00:04:56
    assuming you get elected they have sort
  • 00:04:58
    of a honeymoon period and an opportunity
  • 00:05:00
    to get more done in their first year
  • 00:05:03
    more grace if you will than in the next
  • 00:05:06
    two or three years What would you
  • 00:05:08
    identify as the two or three biggest
  • 00:05:09
    issues facing Canada and what's your
  • 00:05:11
    agenda if you could pick two or three
  • 00:05:13
    things you're really going to go hard at
  • 00:05:14
    your first year as prime minister what
  • 00:05:16
    are those things as you just suggested
  • 00:05:18
    I'll set tariffs aside and uh and focus
  • 00:05:21
    in on on on three things Uh first is
  • 00:05:25
    having free trade actually within Canada
  • 00:05:27
    We have you know basically 13 economies
  • 00:05:30
    here Uh 10 different provinces and
  • 00:05:32
    territories all with their own rules
  • 00:05:34
    It's hard to move credentials and
  • 00:05:36
    sometimes goods and services across the
  • 00:05:38
    country Far harder than it should be So
  • 00:05:40
    uh a process a very quick process of
  • 00:05:42
    free trade And by the way just to put
  • 00:05:44
    orders of magnitude on this you know a
  • 00:05:47
    reasonable estimate of the economic
  • 00:05:49
    benefit of that is bigger than the
  • 00:05:50
    economic hit from the worst version of
  • 00:05:53
    the Trump tariffs So we can kind of give
  • 00:05:55
    ourselves more than others can Second
  • 00:05:57
    thing is uh we have a huge housing
  • 00:05:59
    problem here Uh and particularly
  • 00:06:02
    obviously for younger Canadians first
  • 00:06:04
    and foremost we need to double the rate
  • 00:06:05
    of housing Um and we need to I won't go
  • 00:06:08
    into all the details I'm happy to but uh
  • 00:06:10
    we need some major reforms in order to
  • 00:06:12
    do that we can do it in a way that
  • 00:06:14
    actually leverages you know the Canadian
  • 00:06:15
    supply chain technology and all the
  • 00:06:17
    lumber we potentially won't be able to
  • 00:06:19
    send southbound to the US And then the
  • 00:06:22
    third thing um look the world's flu
  • 00:06:25
    fluid I'm afraid this kind of comes
  • 00:06:27
    towards tariffs but uh I think the
  • 00:06:30
    trading system is going to get reordered
  • 00:06:32
    fairly quickly And so in the course of
  • 00:06:35
    the first year the question is well who
  • 00:06:37
    are we going to deepen our relationships
  • 00:06:38
    with other than the United States and
  • 00:06:40
    those relationships last point are both
  • 00:06:43
    economic and security Uh the world's a
  • 00:06:45
    much more dangerous and divided place
  • 00:06:47
    Security concerns are are top of the
  • 00:06:49
    list Uh so who in Europe or European
  • 00:06:51
    Union as a whole UK who in Asia where
  • 00:06:54
    are we going to partnership um if I can
  • 00:06:57
    say one last thing Scott is you know the
  • 00:07:00
    just being shaken so hard by what's
  • 00:07:02
    happening in the United States Canadians
  • 00:07:04
    are very open to all of
  • 00:07:06
    those priorities like people are up for
  • 00:07:09
    big things Uh they're coming together
  • 00:07:11
    and they're willing to do big things
  • 00:07:13
    because they know they have to do big
  • 00:07:14
    things because the world's changed so
  • 00:07:15
    much Well let's use that as a segue into
  • 00:07:18
    tariffs So I haven't checked my Apple
  • 00:07:21
    Watch in the last two minutes so I don't
  • 00:07:22
    know the state of things right now
  • 00:07:24
    You're uh my understanding Canada's
  • 00:07:26
    largest our largest trading partner No
  • 00:07:28
    we we we tend to be obsessed with China
  • 00:07:30
    but you're our largest trading partner
  • 00:07:32
    No We're most important Yeah Yeah So
  • 00:07:35
    give us the state of play you're the
  • 00:07:37
    you're you're the man representing our
  • 00:07:40
    largest trading partner
  • 00:07:42
    economically as to to the best of your
  • 00:07:45
    knowledge describe the state of play
  • 00:07:47
    between what is happening between the US
  • 00:07:50
    and Canada Where does it sit at this
  • 00:07:52
    moment so I'll I'll start with the the
  • 00:07:55
    bad news or the um as we would call the
  • 00:07:57
    unjustified news um which is what
  • 00:08:00
    tariffs are in place Uh we have still in
  • 00:08:03
    place today tariffs that were originally
  • 00:08:05
    justified because of fentanyl uh
  • 00:08:07
    fentanyl coming across the border uh
  • 00:08:09
    from Canada Uh just for the listeners
  • 00:08:11
    who haven't tracked this um less than 1%
  • 00:08:14
    of the fentanyl imported into United
  • 00:08:16
    States comes from Canada In fact you've
  • 00:08:18
    got a sophisticated audience So I can
  • 00:08:20
    say things like 19 basis points uh of
  • 00:08:22
    the fentanyl comes across the border
  • 00:08:24
    from Canada We've taken major steps to
  • 00:08:26
    reinforce the border drones helicopters
  • 00:08:28
    other things and it's fallen by a
  • 00:08:30
    further n
  • 00:08:32
    990% over the course of the last 3
  • 00:08:34
    months Um but those tariffs um hit a
  • 00:08:37
    wide range of goods in Canada hit a wide
  • 00:08:39
    range of goods and there's a few
  • 00:08:40
    carveouts for that but you know it's
  • 00:08:42
    hitting hundreds of billions of good and
  • 00:08:43
    those are 25% tariffs from the United
  • 00:08:46
    States Then we are also caught Secondly
  • 00:08:48
    we're also caught in the steel and
  • 00:08:49
    aluminum tariffs which are uh this quote
  • 00:08:52
    uh uh national security tariffs
  • 00:08:54
    so-called 232 tariffs Uh we are the
  • 00:08:57
    largest supplier of aluminum in the
  • 00:08:58
    United States We're one of the most
  • 00:09:00
    important suppliers of steel to the
  • 00:09:02
    United States and you can roll those up
  • 00:09:04
    into hundreds of thousands of jobs in
  • 00:09:06
    the US depending on Canadian steel and
  • 00:09:08
    aluminum Um and then the third thing is
  • 00:09:10
    we are caught in the auto tariffs As
  • 00:09:13
    people probably know but I'll just
  • 00:09:15
    personalize it Well they wouldn't know
  • 00:09:17
    this fact There was something called the
  • 00:09:19
    auto pack which was signed the year I
  • 00:09:21
    was born you know 60 years ago And we
  • 00:09:24
    have had an increasingly integrated auto
  • 00:09:26
    system with the United States for 60
  • 00:09:28
    years It got tighter with the Canada US
  • 00:09:30
    free trade agreement 40 years ago and
  • 00:09:31
    then with NAFTA and the successor So
  • 00:09:34
    literally you know these companies and
  • 00:09:35
    the supply chains the main part
  • 00:09:37
    suppliers uh they they're virtually
  • 00:09:39
    fully integrated um and now into the
  • 00:09:41
    middle of this is coming 25% uh US
  • 00:09:45
    tariffs uh which are you know in an
  • 00:09:47
    industry as as as you know that has you
  • 00:09:50
    know 5 7% margins I mean this is this is
  • 00:09:53
    absolutely damaging so we have three
  • 00:09:55
    sets of tariffs we are not subject yet
  • 00:09:59
    to the recipro so-called reciprocal
  • 00:10:01
    tariffs of the US so the state of the
  • 00:10:03
    relationship ship is um strained to say
  • 00:10:05
    the least because all of these tariffs
  • 00:10:08
    are in violation of what you call USMCA
  • 00:10:12
    we call KSMA the same trade agreement
  • 00:10:15
    The good news or the better news is that
  • 00:10:18
    3 weeks ago or so uh President Trump and
  • 00:10:21
    I spoke and we agreed that following the
  • 00:10:23
    Canadian election there would be the
  • 00:10:25
    beginning of a negotiation of a of a
  • 00:10:27
    comprehensive a new comprehensive
  • 00:10:29
    relationship economic security So uh we
  • 00:10:32
    are we are in the the queue so to speak
  • 00:10:34
    uh for those discussions
  • 00:10:36
    It strikes me that these actions are
  • 00:10:38
    about to inspire uh what they envision
  • 00:10:42
    that it's a tremendous amount of deal
  • 00:10:43
    making but deal making around us that
  • 00:10:48
    this it just seems logical this a thesis
  • 00:10:51
    and I want you to validate or nullify it
  • 00:10:54
    but if I'm a G7 nation and I have a
  • 00:10:57
    trading partner that I used to be able
  • 00:10:58
    to count on that was mutually very
  • 00:11:00
    prosperous and now I just not only can't
  • 00:11:02
    count on them but have no idea who I'm
  • 00:11:04
    waking up next do that it's incredible
  • 00:11:07
    motivation to start establishing
  • 00:11:09
    dialogue with other nations is uh
  • 00:11:12
    respond to that thesis is Canada
  • 00:11:14
    aggressively and actively trying to
  • 00:11:16
    reroo around America right now well I
  • 00:11:19
    would say you know trade is a world of
  • 00:11:22
    and um so um you know it's a it's a
  • 00:11:25
    positive sum game as you know both s you
  • 00:11:27
    do it right both sides win it's not a
  • 00:11:29
    zero- sum game so I might not choose the
  • 00:11:31
    phrase around America but obviously you
  • 00:11:34
    know Look if we're uh if we've got
  • 00:11:36
    excess capacity or we have things we're
  • 00:11:38
    going to develop for I'll use the
  • 00:11:40
    example of critical minerals where we're
  • 00:11:42
    a big player Um who are with whom are we
  • 00:11:45
    going to trade who can we rely on you
  • 00:11:49
    know we we're we're sitting here we
  • 00:11:51
    supply 70% of the pod ash to the United
  • 00:11:54
    States you know one of the most
  • 00:11:56
    important components of fertilizer
  • 00:11:58
    70% And there is a 25% tariff being put
  • 00:12:01
    on pod ash So when you think about it
  • 00:12:03
    well geez maybe I might want to take
  • 00:12:06
    another I'll call it a commodity even
  • 00:12:08
    though critical metals and minerals are
  • 00:12:09
    are more than that Um if we're going to
  • 00:12:11
    develop those maybe we want to develop
  • 00:12:13
    them with a supply chain to someone
  • 00:12:15
    who's not going to slap a tariff like
  • 00:12:16
    that on So that invalidating your thesis
  • 00:12:19
    we uh we yeah we have begun to intensify
  • 00:12:21
    discussions with other other countries
  • 00:12:23
    other trading blocks We have a pretty
  • 00:12:25
    good set of trading trade deals in place
  • 00:12:28
    We have a free trade deal with Europe We
  • 00:12:30
    have free trade We're part of the trans
  • 00:12:32
    what was called the trans-pacific
  • 00:12:34
    partnership in Asia So we have a number
  • 00:12:36
    of those but we we're looking to
  • 00:12:37
    reinforce them Um and look we're we are
  • 00:12:41
    hopeful maybe hopeful isn't the right
  • 00:12:43
    word but we're open to open is a better
  • 00:12:45
    way to put it to um a restart of the US
  • 00:12:49
    trading relationship Um provided there's
  • 00:12:52
    willingness on the other side and we can
  • 00:12:53
    come to one of those positive positive
  • 00:12:56
    sum deals
  • 00:12:57
    So I would imagine you speak to a lot of
  • 00:13:00
    other G7 leaders or G20 leaders What's
  • 00:13:04
    the general
  • 00:13:06
    consensus around American leadership
  • 00:13:09
    right now and I realize that you have
  • 00:13:11
    more restraint and or a bit more or
  • 00:13:15
    tangibly nor diplomatic
  • 00:13:17
    but what is the thesis among this group
  • 00:13:20
    of world leaders around what is going on
  • 00:13:23
    here uh how do they explain it how do
  • 00:13:26
    you explain it to each other or can you
  • 00:13:28
    explain it to each other because quite
  • 00:13:29
    frankly here in the US a lot of this
  • 00:13:31
    doesn't even make sense to us and and
  • 00:13:34
    this is our
  • 00:13:35
    leadership Well I think the first thing
  • 00:13:38
    is to recognize as as I have said and uh
  • 00:13:42
    a number of those other leaders have
  • 00:13:43
    said including G7 leaders is that the
  • 00:13:47
    system as we knew it is over right when
  • 00:13:50
    the anchor of the system is fundamental
  • 00:13:52
    has done a series of measures uh that
  • 00:13:54
    the US has done but also set out a
  • 00:13:57
    series of objectives and I'll come back
  • 00:13:58
    to that but set out a series of
  • 00:14:00
    objectives that are just inconsistent
  • 00:14:02
    with the way the system has been
  • 00:14:03
    operating for decades right basically
  • 00:14:05
    since the fall of the Berlin all
  • 00:14:07
    intensified since then So you recognize
  • 00:14:09
    that that system anchored on the US is
  • 00:14:11
    over That then leads to how do you react
  • 00:14:14
    to it there's partly the negotiation
  • 00:14:16
    with the US and which you've been
  • 00:14:17
    focused on But then it's also how do we
  • 00:14:20
    deal with each other which we've also
  • 00:14:21
    touched on in terms of what the US is
  • 00:14:23
    trying to accomplish I think it's uh you
  • 00:14:26
    know I take go back to uh Peter Teal of
  • 00:14:30
    10 years ago saying take Donald Trump
  • 00:14:33
    literally uh and seriously but take him
  • 00:14:35
    literally and seriously and you know
  • 00:14:37
    they're looking to um to balance uh
  • 00:14:40
    where to the extent possible to balance
  • 00:14:42
    trade which is not the way we think
  • 00:14:44
    about things but is the way the US
  • 00:14:47
    thinks about things and you know you do
  • 00:14:49
    get into odd situations like Canada
  • 00:14:51
    where we actually run a the America has
  • 00:14:54
    a trade surplus with Canada in goods The
  • 00:14:57
    only reason there's an overall deficit
  • 00:14:59
    with Canada is because of basically oil
  • 00:15:02
    imports Well if you don't want our oil
  • 00:15:03
    imports that will be a bit of a problem
  • 00:15:05
    for a period of time cuz you know the
  • 00:15:08
    only other option for the refineries
  • 00:15:10
    that take Canadian oil is Venezuela and
  • 00:15:12
    that's you know they've just ban those
  • 00:15:14
    uh those imports as well
  • 00:15:16
    So there it's not the logic isn't
  • 00:15:19
    entirely consistent let's put it that
  • 00:15:20
    way But I think at the core recognizing
  • 00:15:23
    this desire for more balanced trade and
  • 00:15:26
    so from the US administration question I
  • 00:15:30
    think in our mind is there are some
  • 00:15:32
    industries autos
  • 00:15:34
    particularly aerospace would have
  • 00:15:36
    another element of this um and then a
  • 00:15:39
    number of commodity in there a couple
  • 00:15:41
    industries that are so integrated that
  • 00:15:44
    it's hard to see why for US
  • 00:15:47
    competitiveness let alone North American
  • 00:15:49
    competitiveness it makes sense to pull
  • 00:15:51
    them apart That would be our argument
  • 00:15:53
    And then there's other industries forest
  • 00:15:55
    products steel aluminum as three big
  • 00:15:58
    examples where we're agriculture pot ash
  • 00:16:01
    I gave that example nickel I could go on
  • 00:16:04
    where we're such huge suppliers and such
  • 00:16:06
    a safe secure supplier Again it doesn't
  • 00:16:09
    really to us make sense that that would
  • 00:16:12
    be displaced or tariffed So you know
  • 00:16:15
    we've seen that this the trade policy is
  • 00:16:17
    evolving as some of these choke points
  • 00:16:19
    become more evident and uh you know I
  • 00:16:22
    suspect I suspect we will see more Maybe
  • 00:16:24
    I'll say one other thing if I could
  • 00:16:25
    which is it strikes me a bit what the in
  • 00:16:29
    the in the consistencies of uh US policy
  • 00:16:33
    is a desire to have some minimum tariff
  • 00:16:37
    if possible um which has a revenue
  • 00:16:40
    raising element to it and I think you
  • 00:16:42
    know tied into uh US tax policy that is
  • 00:16:45
    uh that is also a possibility here my
  • 00:16:48
    understanding is about 99% of our trade
  • 00:16:50
    is tariff-free and that 1% is around
  • 00:16:52
    things like dairy haven't largely been
  • 00:16:55
    kind of a trade-free zone between Canada
  • 00:16:57
    and the US today Yeah Yeah we have And
  • 00:16:59
    then we have you know like any trading
  • 00:17:02
    partners you get the odd trade irritant
  • 00:17:04
    and uh you know a trade dispute but we
  • 00:17:06
    have processes to deal with those And so
  • 00:17:08
    we had a you know we have a on ongoing
  • 00:17:12
    things around forest products sometimes
  • 00:17:14
    steel and aluminum and you know that's
  • 00:17:16
    handled But yeah trade is basically uh
  • 00:17:18
    tariff-free And you know when it when
  • 00:17:20
    it's your biggest trading partner
  • 00:17:23
    pulling that apart is is is quite costly
  • 00:17:25
    It's costly for both You know from a
  • 00:17:27
    Canadian perspective and you know I'm
  • 00:17:29
    out on the road I'm I'm running for
  • 00:17:31
    office I'm talking to lots of Canadians
  • 00:17:32
    up and down There is a very strong sense
  • 00:17:35
    of yeah this is going to cost us but
  • 00:17:38
    we're willing to take the price to
  • 00:17:40
    restructure our economy in a different
  • 00:17:42
    direction like it's been such a sense of
  • 00:17:46
    uh I mean the word that's used is
  • 00:17:48
    betrayal So you know we signed a deal
  • 00:17:50
    we've had this partnership we observe it
  • 00:17:53
    in good faith we set up businesses we
  • 00:17:55
    you know we know lots of America we like
  • 00:17:57
    Americans we listen to American podcasts
  • 00:17:59
    you know there's such a thing and all of
  • 00:18:00
    a sudden you know we get these uh you
  • 00:18:04
    know these attacks is which is the way
  • 00:18:06
    these this is viewed is okay So it's
  • 00:18:08
    going to cost us for a period of time Uh
  • 00:18:11
    and we'll build out and uh build with
  • 00:18:13
    others We'll be right back after a quick
  • 00:18:19
    break You were the first nonbrit uh to
  • 00:18:23
    serve to run the Bank of England You're
  • 00:18:25
    sort of the Bo Jackson of like global
  • 00:18:26
    economic leadership I've compared this
  • 00:18:29
    and it might be a crude analogy but I
  • 00:18:31
    want you to I want you to add some color
  • 00:18:34
    or fill in the blanks here I've
  • 00:18:35
    described these tariffs as the biggest
  • 00:18:38
    own goal since Brexit What similarities
  • 00:18:42
    do you see and how does that inform a
  • 00:18:45
    how you respond to this and b what you
  • 00:18:46
    think ultimately the outcome is well I
  • 00:18:49
    think there's
  • 00:18:50
    um there are a lot of similarities and
  • 00:18:53
    uh it starts with the economics the
  • 00:18:56
    economics of what's happening Actually
  • 00:18:58
    briefly describe Brexit because uh just
  • 00:19:00
    give us the headline news on Brexit So
  • 00:19:03
    the headline on Brexit is uh for a
  • 00:19:05
    variety of reasons and many of them not
  • 00:19:07
    to do with economics although it was
  • 00:19:08
    sold as an economic you know win uh but
  • 00:19:11
    a lot of people you know because of
  • 00:19:12
    reasons of identity and others voted u
  • 00:19:16
    in 2018 if I'll get my dates right 2016
  • 00:19:19
    I guess no uh for the UK to leave the
  • 00:19:22
    European Union and the UK was even more
  • 00:19:25
    tightly bound in trade and economic
  • 00:19:27
    relationships with the European Union
  • 00:19:29
    than Canada is with the United States
  • 00:19:31
    including free movement of labor very
  • 00:19:32
    easy move in the capital uh huge uh
  • 00:19:35
    trade going both ways uh and you never
  • 00:19:38
    had to get your product if your product
  • 00:19:39
    met the product standard in the UK
  • 00:19:41
    didn't have to worry about it you could
  • 00:19:43
    sell to any country in Europe and so the
  • 00:19:45
    decision taken as I say for a variety of
  • 00:19:47
    reasons narrowly but taken to leave the
  • 00:19:50
    European Union and I remember when it
  • 00:19:52
    happened and our view at the time and
  • 00:19:54
    remember this was during a period where
  • 00:19:56
    it was interest rates were at rock
  • 00:19:58
    bottom inflation was too low people were
  • 00:19:59
    worried about deflation blah blah our
  • 00:20:01
    view was okay what's going to happen is
  • 00:20:04
    the economy is going to slow
  • 00:20:05
    unemployment's going to go up
  • 00:20:07
    inflation's going to go up and we at the
  • 00:20:09
    Bank of England are going to have to
  • 00:20:10
    raise interest rates when this happens
  • 00:20:12
    And by the way the currency will also go
  • 00:20:13
    down The currency went down by 20 25%
  • 00:20:16
    It's still on the floor relative to
  • 00:20:18
    where it was Um still on the floor
  • 00:20:19
    because you had a big negative trade
  • 00:20:22
    shock a big loss of wealth uh basically
  • 00:20:24
    uh future wealth in the currency market
  • 00:20:26
    priced it first Um and exactly what we
  • 00:20:29
    expected to happen happened I mean it
  • 00:20:31
    happened to happen roughly at the same
  • 00:20:33
    time as co was finishing but you had a
  • 00:20:35
    big again I'm relying on your audience a
  • 00:20:38
    big negative supply shock to the economy
  • 00:20:41
    because you ripped up trading
  • 00:20:42
    relationships and the productive
  • 00:20:44
    capacity went down relative to where
  • 00:20:47
    demand was So that was inflationary and
  • 00:20:50
    um combination of that meant UK rates
  • 00:20:52
    are higher and it's got a bigger
  • 00:20:53
    inflation problem it has had than other
  • 00:20:56
    economies When you look at what's
  • 00:20:57
    happening in the US the friction put
  • 00:21:00
    into its trading
  • 00:21:01
    relationships is going to cause the same
  • 00:21:03
    thing It is going to slow the rate of
  • 00:21:06
    growth of that economy It is going to
  • 00:21:08
    affect the dollar It has affected the
  • 00:21:10
    dollar negatively as we've seen Uh it's
  • 00:21:13
    going to push up prices on the margin Um
  • 00:21:16
    and so slower economy higher inflation
  • 00:21:18
    higher interest rates all things being
  • 00:21:20
    equal Now there's a big caveat with what
  • 00:21:22
    I did or there's a qualifier is a better
  • 00:21:24
    way to put it The UK was a much more
  • 00:21:27
    open
  • 00:21:28
    economy much more dependent on Europe
  • 00:21:31
    The US is more of a closed economy It
  • 00:21:33
    depends on the world but it is it's
  • 00:21:35
    different orders of magnitude So it's
  • 00:21:37
    same direction different orders of
  • 00:21:38
    magnitude So there's I think there are a
  • 00:21:40
    lot of uh a lot of parallels here and I
  • 00:21:43
    guess maybe the other parallel if I can
  • 00:21:45
    add one more which remains to be seen
  • 00:21:48
    but the UK I would say and you'll get
  • 00:21:51
    I'll get hate mail from UK some UK
  • 00:21:53
    listeners but I would say based on the
  • 00:21:55
    polling it's pretty well understood that
  • 00:21:57
    the economic impact of Brexit has been
  • 00:22:00
    negative in the UK Let's say twothirds
  • 00:22:02
    of the people now understand that But
  • 00:22:05
    the path back to being closer to Europe
  • 00:22:07
    is very difficult politically It's hard
  • 00:22:10
    to build rebuild that consensus They
  • 00:22:12
    move very slowly And you think about the
  • 00:22:14
    situation in the world right now for the
  • 00:22:17
    UK Boy there's a lot of logic being
  • 00:22:19
    closer to Europe You know from uh get
  • 00:22:22
    trade perspective and even from a
  • 00:22:24
    security perspective they built this
  • 00:22:26
    sort of uh what's called a coalition of
  • 00:22:28
    the willing with respect to Ukraine
  • 00:22:30
    because the UK the US is pulling back
  • 00:22:32
    from support for Ukraine By the way
  • 00:22:34
    Canada has stepped up and is part of
  • 00:22:36
    that largely European coalition of the
  • 00:22:38
    willing alongside Australia So there's a
  • 00:22:41
    logic to going back to that but it's
  • 00:22:42
    hard to go back once you've broken up
  • 00:22:44
    these relationships And you know so the
  • 00:22:47
    next six 12 months are I in my judgment
  • 00:22:50
    are going to be quite important for the
  • 00:22:51
    United States uh and for the global
  • 00:22:53
    trading system because the question is
  • 00:22:55
    okay we understand that there's a there
  • 00:22:58
    there is a big change a big break with
  • 00:23:00
    the old system but how much of a break
  • 00:23:02
    is it going to be and is there going to
  • 00:23:04
    be a relatively open trading system for
  • 00:23:08
    and I'm using quotations here for those
  • 00:23:09
    listening like-minded countries broadly
  • 00:23:12
    like-minded countries you know I think
  • 00:23:14
    of the G7 as being pretty like-minded
  • 00:23:16
    countries not surprisingly You know we
  • 00:23:18
    value liberty free speech open markets
  • 00:23:21
    in general So are we going to have a
  • 00:23:23
    relatively open system amongst
  • 00:23:26
    ourselves or is it only going to be with
  • 00:23:28
    a few countries or is it going to be
  • 00:23:30
    with no countries i mean that's kind of
  • 00:23:32
    what to play for here Um and um but the
  • 00:23:35
    system won't it won't revert to to what
  • 00:23:38
    it was previously
  • 00:23:40
    When we're talking about these tariffs
  • 00:23:41
    there's a general sense that uh or at
  • 00:23:44
    least a a talk track from the Trump
  • 00:23:47
    administration that the US has been
  • 00:23:50
    taken advantage of by its trading
  • 00:23:52
    partners including Canada that they've
  • 00:23:54
    just got the better end of the deal and
  • 00:23:56
    that tariffs will help restore some sort
  • 00:23:59
    of parody or equity in the relationship
  • 00:24:02
    Respond to that
  • 00:24:04
    Well I I mean we don't obviously we
  • 00:24:06
    don't see it um we don't see it in the
  • 00:24:08
    following respects because really again
  • 00:24:11
    the way the the Trump administration has
  • 00:24:14
    defined being quote taken advantage of
  • 00:24:16
    is do you run a trade deficit um and we
  • 00:24:19
    can argue about that definition I
  • 00:24:21
    wouldn't if I lead on my economic
  • 00:24:23
    training and uh my experience I would
  • 00:24:25
    say well that isn't being taken
  • 00:24:27
    advantage of It's it's mutual exchange
  • 00:24:30
    But the US runs the surplus with us the
  • 00:24:33
    US sells more to if anyone's being taken
  • 00:24:35
    advantage of we're being taken advantage
  • 00:24:36
    of right because I mean by that
  • 00:24:39
    definition and the only place where they
  • 00:24:42
    run a deficit is yes we do ship oil to
  • 00:24:45
    the United States now we happen to ship
  • 00:24:47
    oil to the United States at a big
  • 00:24:49
    discount to global prices so we're being
  • 00:24:52
    taken advantage of again on that
  • 00:24:54
    definition um on the on the goods trade
  • 00:24:57
    side and we're getting taken advantage
  • 00:24:59
    because we're selling oil at below good
  • 00:25:01
    prices so we you know we we want our
  • 00:25:03
    money back No we don't Where we still
  • 00:25:05
    see the broader benefits uh of the
  • 00:25:07
    relationship and uh you know I don't
  • 00:25:10
    think that I'll go back to the auto
  • 00:25:12
    sector Um it's not going to feel taken
  • 00:25:16
    advantage of Um as if if these tariffs
  • 00:25:18
    stay in place and you know as you say
  • 00:25:21
    you got to check your your your phone
  • 00:25:23
    every once in a while just to see where
  • 00:25:24
    things stand Uh there's a possible
  • 00:25:26
    exemption on the auto part side uh
  • 00:25:29
    that's coming in in the United States um
  • 00:25:32
    which we would have said right what we
  • 00:25:33
    did say right from the start would have
  • 00:25:35
    to happen because the whole system will
  • 00:25:37
    grind to a halt uh without it So some of
  • 00:25:40
    the mutual advantages will become more
  • 00:25:42
    are becoming more apparent and hopefully
  • 00:25:44
    uh the US administration can continue to
  • 00:25:47
    be
  • 00:25:48
    nimble My understanding is that you ship
  • 00:25:51
    us cheap energy or cheap oil You're
  • 00:25:53
    obviously a very resource abundant
  • 00:25:55
    nation We apply our IP and refining
  • 00:25:58
    capability and then we sell it at three
  • 00:26:00
    times the cost It sounds like it's been
  • 00:26:01
    pretty mutually beneficial Yeah No
  • 00:26:03
    that's absolutely right How do you see
  • 00:26:07
    this playing out if you were attempted
  • 00:26:09
    to speculate what the relationship is
  • 00:26:12
    around global trade and tariffs on a
  • 00:26:15
    macro level and then specifically with
  • 00:26:17
    Canada and the US when when you try to
  • 00:26:20
    plan an economy similar to way the CEO
  • 00:26:22
    tries to plan a business what are you
  • 00:26:25
    expecting you have to do scenario
  • 00:26:27
    planning Nobody knows But what do you
  • 00:26:29
    think are the most likely scenarios for
  • 00:26:31
    how this plays out because I I I mean
  • 00:26:33
    this seriously Prime Minister we're all
  • 00:26:36
    befuddled by this The majority of people
  • 00:26:38
    who understand economics are having a
  • 00:26:41
    difficult time seeing how this is a big
  • 00:26:43
    win for the US We're just we're having a
  • 00:26:45
    difficult time understanding how we win
  • 00:26:48
    here Maybe more people come to the They
  • 00:26:51
    claim there's 75 nations lining up to
  • 00:26:54
    cut deals with them
  • 00:26:56
    Is that the sense you get that nations
  • 00:26:58
    are lining up to cut a deal with us
  • 00:26:59
    right now well short answer I I I I
  • 00:27:03
    don't know this I I don't know is on
  • 00:27:06
    that second question There there's a few
  • 00:27:09
    things that happened here One is that um
  • 00:27:13
    there's a risk premium in US assets that
  • 00:27:16
    wasn't there before Uh and the question
  • 00:27:18
    is how big is that risk premium going to
  • 00:27:19
    set where is it going to settle um and
  • 00:27:22
    uh and that in part is going to depend
  • 00:27:24
    on how coherent the new system is You
  • 00:27:29
    know and and is there does the US
  • 00:27:32
    credibly commit to a new system or a
  • 00:27:35
    series of deals remember we're you know
  • 00:27:37
    we have a we have a trading deal with
  • 00:27:39
    the US that was signed by the current
  • 00:27:41
    president um and uh and which which
  • 00:27:44
    isn't being you know observed So so I
  • 00:27:46
    think that's one thing is there's a risk
  • 00:27:48
    premium on US assets and if there's a
  • 00:27:49
    risk premium on US assets then the cost
  • 00:27:51
    of all other assets around the world is
  • 00:27:54
    greater right like since we're still
  • 00:27:56
    priced off of uh priced off of US
  • 00:27:58
    treasuries for example so that's one
  • 00:27:59
    thing I think second is um I do believe
  • 00:28:02
    that there are a series of like-minded
  • 00:28:05
    countries we very much like the US to be
  • 00:28:07
    part of that group but like-minded
  • 00:28:09
    countries who will develop deeper
  • 00:28:10
    trading and security relationships as a
  • 00:28:12
    consequence of this uh it's the world of
  • 00:28:15
    second best It's not what we would all
  • 00:28:17
    want but it's the logical thing to do
  • 00:28:20
    Third thing that's going to happen is
  • 00:28:22
    that um there is going to be much
  • 00:28:24
    greater focus and I know this for a fact
  • 00:28:26
    Well this will be a fact if if if my
  • 00:28:29
    party is successful in the elections Uh
  • 00:28:31
    a much greater focus on uh domestic
  • 00:28:33
    drivers of demand So building at home
  • 00:28:36
    building big infrastructure building
  • 00:28:37
    millions of houses building you know
  • 00:28:39
    building out our own economies um more
  • 00:28:42
    more pro uh domestic procurement right
  • 00:28:45
    in a world where we've got excess steel
  • 00:28:47
    and aluminum capacity which we will uh
  • 00:28:50
    if the US doesn't change on trade well
  • 00:28:52
    guess whose steel and aluminum we're
  • 00:28:53
    going to buy um for a variety of things
  • 00:28:56
    Uh guess what defense procurement we're
  • 00:28:59
    going to do uh you know right now we
  • 00:29:01
    spend about 75% of our defense dollars
  • 00:29:05
    go to the United
  • 00:29:06
    States that you know doesn't make a lot
  • 00:29:09
    of sense uh if we settle out in a in a
  • 00:29:12
    more um armslength relationship with the
  • 00:29:15
    US and that's true if it's true for us
  • 00:29:18
    it's true for Europe it's true for the
  • 00:29:19
    UK um and so we'll all move more
  • 00:29:23
    domestic and more with each other and
  • 00:29:26
    the degree to which that happens so this
  • 00:29:28
    is a world just to be clear and you I
  • 00:29:30
    think you intuitively what you get this
  • 00:29:32
    from the start we got a world where we
  • 00:29:35
    have higher risk premia right it's cost
  • 00:29:37
    of capital is more expensive and we've
  • 00:29:39
    got a world where people are doing
  • 00:29:41
    second best things countries are doing
  • 00:29:43
    second best things so it's a world
  • 00:29:44
    that's more expensive and it's more it's
  • 00:29:47
    not
  • 00:29:48
    artic fancy word like it's not totally
  • 00:29:50
    in and of yourself but it's you're
  • 00:29:52
    putting much greater emphasis on uh
  • 00:29:55
    taking care of yourself um we'll do that
  • 00:29:58
    and we'll with like-minded countries and
  • 00:30:01
    uh and move forward The surveys I've
  • 00:30:03
    read said that twothirds of Americans
  • 00:30:05
    still think of Canada as an ally We're
  • 00:30:07
    sort of like oh you know Trump let boys
  • 00:30:09
    will be boys We still love Canadians But
  • 00:30:12
    2/3 plus of Canadians no longer see the
  • 00:30:15
    US as an ally I mean quite frankly it
  • 00:30:19
    feels like Canadians are just pissed off
  • 00:30:21
    that they feel the term used was
  • 00:30:23
    betrayed and that even if we're even if
  • 00:30:26
    we're able to establish go back to
  • 00:30:28
    normal hasn't the knife you know isn't
  • 00:30:31
    it the knife gets pulled halfway out of
  • 00:30:33
    the back but this injury takes years or
  • 00:30:35
    decades to fail i mean what is the vibe
  • 00:30:38
    if you will around how Canadians feel
  • 00:30:41
    about Americans and how long do you
  • 00:30:43
    think it gets it takes us to repair this
  • 00:30:46
    relationship i certainly recognize those
  • 00:30:48
    figures Um there is a feeling here that
  • 00:30:52
    uh that the it's the actions of the US
  • 00:30:56
    There's there's several things One is
  • 00:30:58
    the trade actions Secondly was this long
  • 00:31:00
    period and I'm I'm not going to repeat
  • 00:31:02
    the phrases that were used but these
  • 00:31:04
    threats to our sovereignty our very
  • 00:31:07
    sovereignty which you know kind of
  • 00:31:09
    unique There's us in Denmark who
  • 00:31:12
    suffered actual threats to sovereignty I
  • 00:31:14
    guess Panama we rolled ourselves in with
  • 00:31:16
    that and that's you know on your
  • 00:31:18
    hierarchy of betrayals threatening
  • 00:31:20
    somebody else's sovereignty is pretty
  • 00:31:22
    much the top Uh I guess the top is
  • 00:31:24
    acting on that threat Um
  • 00:31:26
    so that's all mixed in I think secondly
  • 00:31:30
    what has been striking has been the
  • 00:31:34
    relatively muted response in the
  • 00:31:37
    broader US to these steps right you know
  • 00:31:43
    the CEO class if I can put it that way
  • 00:31:46
    the other major influencer stakeholders
  • 00:31:48
    and the uh that's changing a bit but it
  • 00:31:51
    was pretty quiet for a long period of
  • 00:31:52
    time um so you know and when you look at
  • 00:31:56
    that from this side of the border you
  • 00:31:57
    think oh okay well this is more deeply
  • 00:32:00
    held or the friendship is less firmly
  • 00:32:02
    rooted It's like any relationship I
  • 00:32:05
    think if it's uh when you have a a loss
  • 00:32:07
    of trust it you know it can be repaired
  • 00:32:10
    to a degree It takes a period of time
  • 00:32:12
    and it takes action to repair right but
  • 00:32:15
    you know it's more than more than five
  • 00:32:16
    words I I think that uh that action can
  • 00:32:19
    start with uh in May the prime minister
  • 00:32:24
    of Canada at that point will meet with
  • 00:32:26
    President Trump Uh I want to be the
  • 00:32:28
    prime minister of Canada at that point
  • 00:32:29
    I'm working hard to get there But uh uh
  • 00:32:32
    and they will sit down and start a
  • 00:32:33
    process of um redefining that
  • 00:32:36
    relationship and and and building trust
  • 00:32:38
    out from
  • 00:32:39
    that We'll be right
  • 00:32:42
    back Support for PropG comes from
  • 00:32:44
    HubSpot HubSpot is taking on the
  • 00:32:46
    fundamental myth and business software
  • 00:32:48
    that you need dozens of different tools
  • 00:32:51
    to succeed You don't You only need one
  • 00:32:53
    that actually works With HubSpot's
  • 00:32:55
    powerful AI solution Breeze built right
  • 00:32:58
    into their customer platform you have
  • 00:33:00
    everything you need all in one place
  • 00:33:01
    Breeze C-pilot acts like a digital
  • 00:33:03
    wingman that keeps you two steps ahead
  • 00:33:05
    While Breeze agents take entire work
  • 00:33:07
    streams off your plate That's not AI
  • 00:33:09
    vaporware That's leverage We're talking
  • 00:33:12
    about real ROI Cutting sales cycles in
  • 00:33:15
    half resolving service tickets faster
  • 00:33:17
    and working less hours every week to
  • 00:33:19
    make it all happen Go to
  • 00:33:21
    hubspot.com/ai to get started today
  • 00:33:27
    We're back with more from Prime Minister
  • 00:33:31
    Carney So just as a means of not or
  • 00:33:35
    taking advantage of the fact that we
  • 00:33:37
    have um you on this podcast we have real
  • 00:33:42
    problems in the US around income
  • 00:33:43
    inequality Um for the first time in our
  • 00:33:46
    nation's history a 30-year-old isn't
  • 00:33:48
    doing as well as his or her parents was
  • 00:33:49
    at 30 Tremendous polarization
  • 00:33:52
    politically People just don't like each
  • 00:33:53
    other I mean I would argue that
  • 00:33:55
    comparatively the nation's actually done
  • 00:33:57
    quite well But what ills us that calls
  • 00:34:00
    coming from inside of the house We don't
  • 00:34:01
    like each other within
  • 00:34:02
    America Uh you're asked to be a
  • 00:34:06
    journeyman and come be treasury
  • 00:34:08
    secretary or head of the Fed What policy
  • 00:34:11
    plans do you think the US should adopt
  • 00:34:13
    and then I want to use that as a jumping
  • 00:34:15
    off point to what are the biggest
  • 00:34:16
    economic challenges that Canada faces
  • 00:34:19
    and how you plan to address them
  • 00:34:21
    Well I think the okay uh you go to the
  • 00:34:24
    heart of uh I mean that's a big big
  • 00:34:26
    question I guess the way I I I look at
  • 00:34:28
    it as follows I'm going to I'm going to
  • 00:34:29
    come at this from an odd angle maybe but
  • 00:34:32
    uh when I look at um what's going to
  • 00:34:35
    drive economic prosperity uh
  • 00:34:37
    productivity growth uh for the next 25
  • 00:34:40
    years what are the big drivers of that
  • 00:34:42
    i'd put down three uh big drivers AI no
  • 00:34:44
    insight I'd put at the top of the list
  • 00:34:47
    uh probably the life sciences revolution
  • 00:34:48
    where I'm less uh less expert um and um
  • 00:34:52
    and I would put carbon I would put drive
  • 00:34:54
    towards lower carbon the US has taken a
  • 00:34:56
    step back from that for the moment but
  • 00:34:58
    it's going to come back because the the
  • 00:35:00
    underlying issues around are there and
  • 00:35:03
    so okay if those are some of the big
  • 00:35:06
    things that are going to drive economies
  • 00:35:08
    going forward uh and the US can have
  • 00:35:10
    mastery in all of those um but the
  • 00:35:13
    question is how broadly that's going to
  • 00:35:15
    be shared within the us uh across
  • 00:35:17
    various social strata um and how ready
  • 00:35:20
    people are going to be to take advantage
  • 00:35:22
    of it Right so you know is AI going to
  • 00:35:25
    be you know purely an elite uh or
  • 00:35:28
    largely an elite operation or is AI
  • 00:35:30
    going to be used to train a lot of
  • 00:35:31
    people to do a number of things i mean I
  • 00:35:34
    know that sounds very panglosian or you
  • 00:35:37
    know techno optimistic but it is the
  • 00:35:40
    question is whether it's a deliberate
  • 00:35:42
    policy that's steered by by the federal
  • 00:35:45
    and and local governments in a way that
  • 00:35:48
    are going to ensure that you know in
  • 00:35:50
    Appalachia you're learning skills that
  • 00:35:53
    are consistent with that andor you know
  • 00:35:55
    the energy transition over time it's not
  • 00:35:57
    a term that's used anymore in the US as
  • 00:35:59
    far as I can tell uh but it will come
  • 00:36:01
    back if I can flip it back Scott to us
  • 00:36:04
    we have the same set of issues uh or set
  • 00:36:06
    of drivers those are global drivers on
  • 00:36:09
    top of that we have a series of things
  • 00:36:10
    such as I mentioned critical minerals we
  • 00:36:12
    have large conventional energy um so how
  • 00:36:15
    are we balancing all that in a way that
  • 00:36:18
    builds the jobs as as we move out one of
  • 00:36:20
    the things I'll say two other things
  • 00:36:22
    which are related but distinct we got to
  • 00:36:25
    sort out our housing issues in this
  • 00:36:27
    country we have a massive economic we
  • 00:36:29
    have a absolute social need but we have
  • 00:36:31
    a massive economic opport opportunity to
  • 00:36:33
    create a new industry new way of
  • 00:36:35
    building houses and at scale and driving
  • 00:36:36
    that And we're going to we're going to
  • 00:36:38
    shoot on that And I guess the last thing
  • 00:36:40
    I'd say which candidly worries me a bit
  • 00:36:42
    about the United States uh and gives me
  • 00:36:46
    greater comfort or strength in Canada is
  • 00:36:49
    uh a word I'm not sure you like to use
  • 00:36:52
    anymore which is around diversity We
  • 00:36:54
    have a huge huge opportunity here
  • 00:36:56
    because we're one of the most diverse
  • 00:36:57
    countries in the world We value
  • 00:37:00
    diversity they get a very strong sense
  • 00:37:02
    of uh equal rights in a broad sense uh
  • 00:37:04
    we can be a magnet for talent and as the
  • 00:37:07
    US is pushing out brains if you will and
  • 00:37:10
    you know it's quite a hostile
  • 00:37:12
    environment in the academic world in the
  • 00:37:13
    United States now uh we can take
  • 00:37:15
    advantage of that um and then that
  • 00:37:17
    cascades down through you know the AI
  • 00:37:20
    revolution life sciences uh other uh
  • 00:37:23
    other elements podcasters creative class
  • 00:37:26
    Scott come up here whether it's now it's
  • 00:37:28
    now above zero creative has done a lot
  • 00:37:30
    of work in that sense prime minister so
  • 00:37:33
    The look you have a housing crisis We
  • 00:37:36
    have a housing crisis and it seems like
  • 00:37:38
    leaders have agreed that it's a crisis
  • 00:37:40
    for the last 10 years now I read that
  • 00:37:43
    housing in Vancouver as a percentage of
  • 00:37:44
    the average salary is the third most
  • 00:37:46
    expensive city in the world and that so
  • 00:37:49
    much of it is in zoning and nimism
  • 00:37:53
    uh and your the previous prime minister
  • 00:37:56
    you know they wanted to address the
  • 00:37:57
    housing crisis What's the friction point
  • 00:38:00
    is it capital is it labor is it zoning
  • 00:38:02
    what is different about what you're
  • 00:38:03
    proposing that is going to register any
  • 00:38:06
    more progress than previous
  • 00:38:07
    administrations
  • 00:38:09
    so it's uh it's all of the above Um and
  • 00:38:11
    so you attack it in a in a comprehensive
  • 00:38:14
    way Um I I'm going to simplify in terms
  • 00:38:17
    of restrictions zoning um development
  • 00:38:19
    charges and we work at multiple levels
  • 00:38:21
    of government It's part of the reason
  • 00:38:23
    why those costs are there They come from
  • 00:38:24
    the municipal side And so in effect we
  • 00:38:27
    put up a bunch of money just put up a
  • 00:38:29
    bunch of money to commit to cut the
  • 00:38:31
    development charges in half Okay So that
  • 00:38:34
    and that's subject to a series of other
  • 00:38:37
    restrictions being removed but we will
  • 00:38:39
    we at the federal level will will pay
  • 00:38:41
    for that to to be cut in half The second
  • 00:38:43
    thing uh I mean we believe very strongly
  • 00:38:46
    that uh we productivity for in the
  • 00:38:49
    Canadian housing uh sector construction
  • 00:38:51
    sector basically has flatlined for the
  • 00:38:53
    last 20 years Okay We're still building
  • 00:38:55
    houses like we did before and given the
  • 00:38:57
    scale of what we need to do you know we
  • 00:38:59
    got to move much more rapidly
  • 00:39:01
    particularly in urban density and other
  • 00:39:02
    things So you know modular prefab
  • 00:39:04
    housing um mass timber other innovations
  • 00:39:08
    that are there they exist And so one of
  • 00:39:11
    the things we're going to do to
  • 00:39:13
    kickstart that industry and this is
  • 00:39:15
    Canada's not the United States we have a
  • 00:39:16
    different attitude to toward these
  • 00:39:18
    things We have a problem with uh deeply
  • 00:39:21
    affordable housing right social certain
  • 00:39:24
    countries you might call social housing
  • 00:39:25
    Uh we have we we just have not built
  • 00:39:27
    that for decades basically in effect And
  • 00:39:31
    so we need to we need to catch up And so
  • 00:39:33
    what we're doing part of what we're
  • 00:39:34
    doing is we're going to build huge
  • 00:39:37
    amount at that level and set the the the
  • 00:39:41
    the specs if you will for that We're
  • 00:39:44
    going to build and we're going to build
  • 00:39:46
    by you know on our balance sheet our as
  • 00:39:48
    a developer and we'll set the specs for
  • 00:39:50
    that which drive the industry upstream
  • 00:39:52
    in prefab mass timber etc which you know
  • 00:39:54
    gets the economies to scale there Um but
  • 00:39:57
    by and large we will rely on private
  • 00:39:59
    sector build Uh we'll make a bunch of
  • 00:40:01
    land available We'll make cheap capital
  • 00:40:03
    25 billion uh for developers in this
  • 00:40:06
    case which is bigger money up here Cut
  • 00:40:08
    those development charges in half drive
  • 00:40:11
    that and then we will give tax breaks to
  • 00:40:15
    people buying their first time home So
  • 00:40:17
    basically they're getting 5% off their
  • 00:40:18
    first first-time home which you know
  • 00:40:20
    from a down payment perspective starts
  • 00:40:22
    starts to add up So attacking it both on
  • 00:40:24
    the supply demand side The way we look
  • 00:40:27
    at it is this is generational Like the
  • 00:40:31
    scale of the problem is generational
  • 00:40:33
    such that we are building out a huge
  • 00:40:36
    pipeline of apprentices in the skil
  • 00:40:38
    trades And one of the core messages I
  • 00:40:40
    give virtually every time I speak so I'm
  • 00:40:42
    going to do it now is this is going to
  • 00:40:44
    be a great time for a career in the
  • 00:40:45
    skilled trades in Canada because we're
  • 00:40:47
    going to build for the next 2530 years
  • 00:40:49
    like we are going to add if we get this
  • 00:40:52
    right and we intend to 3 to four points
  • 00:40:54
    of GDP of investment that's a huge
  • 00:40:57
    number right it's possible we used to
  • 00:40:59
    invest at that scale relative to GDP in
  • 00:41:01
    the early70s we can do it again you know
  • 00:41:03
    we can finance it um we got all the
  • 00:41:06
    pension funds we got lots of money to
  • 00:41:08
    finance it but we need to we need to
  • 00:41:10
    kickstart it and of course it's not it's
  • 00:41:11
    housing is we start with housing it's
  • 00:41:13
    not just housing it's energy it's other
  • 00:41:15
    other elements but that's what we're
  • 00:41:17
    going to do so we want to get young
  • 00:41:19
    people into the skilled trades at scale
  • 00:41:22
    We're going to pay for all their
  • 00:41:23
    apprenticeships We're going to work with
  • 00:41:25
    the unions to pull them through We're
  • 00:41:26
    adding a bunch of capacity at
  • 00:41:28
    post-secary education so they can get
  • 00:41:29
    these trades at a scale so we're getting
  • 00:41:31
    hundreds of thousands which again in the
  • 00:41:34
    US doesn't seem like a lot but in Canada
  • 00:41:35
    these are big
  • 00:41:37
    numbers Let's talk a little bit about
  • 00:41:38
    climate and energy you've evolved uh
  • 00:41:41
    from being a climate finance advocate to
  • 00:41:44
    scrapping the consumer carbon tax and
  • 00:41:46
    calling for Canada to be an energy
  • 00:41:48
    superpower How have your views changed
  • 00:41:51
    on this uh I wouldn't I wouldn't say my
  • 00:41:54
    views have changed uh to be honest So I
  • 00:41:56
    mean it's uh it's very resultsoriented
  • 00:41:58
    So the consumer carbon tax uh in Canada
  • 00:42:01
    was responsible for about 6% of our
  • 00:42:04
    emissions reduction So 94% of the work
  • 00:42:08
    was being done elsewhere Now it sent a
  • 00:42:10
    signal to households but it it it just
  • 00:42:14
    wasn't that important Um but it was
  • 00:42:18
    quite divisive because people you know
  • 00:42:20
    viewed it as a tax and they they saw the
  • 00:42:23
    tax but the tax they didn't all give
  • 00:42:26
    credit to the rebates that they were
  • 00:42:27
    getting So it politically it was
  • 00:42:29
    unhelpful was undercutting the overall
  • 00:42:31
    message So we got rid of that um a few
  • 00:42:34
    months ago Um was the first thing I did
  • 00:42:36
    actually when I got into office Um but
  • 00:42:38
    what we what we are doing is making sure
  • 00:42:41
    that the carbon market for large
  • 00:42:43
    emitters works well So and that um and
  • 00:42:48
    and we're large emitters work well and
  • 00:42:50
    as a consequence of that we're getting
  • 00:42:52
    them in effect to pay people for this is
  • 00:42:55
    what will happen if we're elected to pay
  • 00:42:57
    people for you know driving EVs
  • 00:42:59
    retrofitting their homes uh uh the other
  • 00:43:03
    you know climate smart choices And then
  • 00:43:06
    on top of that it there is a big element
  • 00:43:08
    uh uh big IRA type element to our
  • 00:43:11
    climate strategy investment tax credits
  • 00:43:13
    and others So we're looking basically
  • 00:43:16
    and and having you know reasonable
  • 00:43:17
    success with this where we're putting
  • 00:43:18
    out you know a dollar federally and
  • 00:43:21
    we're getting $4 to5 of private
  • 00:43:23
    investment on top of that Um and you
  • 00:43:26
    know what's really relevant to us aside
  • 00:43:29
    from caring about the climate and people
  • 00:43:31
    up here do care about the climate as a
  • 00:43:33
    whole um is that we think that this is
  • 00:43:36
    going to be a fundamental driver of
  • 00:43:38
    competitiveness And if you look at who
  • 00:43:40
    we're going to be trading with more over
  • 00:43:42
    time Europeans the Brits others guess
  • 00:43:45
    what they care about this In fact as you
  • 00:43:47
    know with carbon border adjustment
  • 00:43:49
    mechanism is coming into in Europe And
  • 00:43:52
    so we take a view that okay we've got to
  • 00:43:54
    do this medium long term for
  • 00:43:56
    competitiveness because that's where the
  • 00:43:58
    world's going Secondly the Europeans and
  • 00:44:00
    others are going to want us to do this
  • 00:44:02
    Thirdly actually we've got a lot of the
  • 00:44:04
    technology So part of being an energy
  • 00:44:05
    superpower is around small modular
  • 00:44:07
    reactors Um I mean we're a big hydro
  • 00:44:10
    power Uh we're decent on hydrogen We
  • 00:44:13
    could get better at carbon capture and
  • 00:44:14
    storage All these things we can do And I
  • 00:44:16
    guess the last point which goes back to
  • 00:44:18
    the US is you know right now and I'm
  • 00:44:21
    going to grossly generalize the US
  • 00:44:22
    doesn't care about climate 6 months ago
  • 00:44:25
    it cared about climate Guess what you're
  • 00:44:26
    going to care about climate again down
  • 00:44:28
    the road And when you care about climate
  • 00:44:29
    down the road again we want to be in a
  • 00:44:32
    position where we're much more
  • 00:44:33
    competitive uh and maybe have
  • 00:44:35
    leapfrogged a number of US companies So
  • 00:44:38
    I just want to do a quick lightning
  • 00:44:39
    round Advice to your 25-year-old self
  • 00:44:42
    You got 10 15 seconds with your
  • 00:44:45
    25-year-old self What would you say to
  • 00:44:46
    yourself
  • 00:44:48
    uh you know relax It's and and and stay
  • 00:44:51
    focused on what you like I mean I
  • 00:44:53
    probably spent more time doing things I
  • 00:44:55
    didn't really love than uh I should have
  • 00:44:57
    Uh you got a chance to go back and meet
  • 00:45:00
    with someone who you've lost or who's no
  • 00:45:02
    longer around Who would that person be
  • 00:45:03
    and what would you say to them
  • 00:45:06
    well I think with I you know be my be my
  • 00:45:08
    father I'd say I love him
  • 00:45:11
    You're at the end of your life not going
  • 00:45:13
    to walk on the beach again not going to
  • 00:45:14
    get to hang out with your wife your kids
  • 00:45:17
    What is success look like for you when
  • 00:45:19
    you when you look back what is the box
  • 00:45:20
    you want to have checked
  • 00:45:23
    i think strongly the answer to that is
  • 00:45:26
    that you're you're proud of the values
  • 00:45:30
    of of your children and people who
  • 00:45:32
    worked with you I mean I think that is
  • 00:45:33
    the only real legacy the extent to which
  • 00:45:36
    you have influenced how others treat
  • 00:45:40
    others in the world and and and how they
  • 00:45:43
    how how they react in the world
  • 00:45:45
    That's I wrote a book and that was the
  • 00:45:48
    uh that was the conclusion of that Mark
  • 00:45:50
    Carney is Canada's 24th prime minister
  • 00:45:53
    and leader of the Liberal Party sworn in
  • 00:45:55
    this march uh as an economist Uh Prime
  • 00:45:58
    Minister Carney steered the Bank of
  • 00:45:59
    Canada through the financial crisis and
  • 00:46:01
    later became the first nonbrit to run
  • 00:46:03
    the Bank of England Between those roles
  • 00:46:05
    she served as UN special envoy to
  • 00:46:06
    climate action and finance and as vice
  • 00:46:09
    chair of Brookfield Asset Management I
  • 00:46:11
    trust a lot of Canadians are listening
  • 00:46:13
    and I feel comfortable speaking for a
  • 00:46:15
    lot of people and that is Americans
  • 00:46:18
    understand the largest undefended border
  • 00:46:19
    in the world is the US Canadian border
  • 00:46:21
    That's for a reason I love that question
  • 00:46:24
    that uh Warren Buffett's friend was a a
  • 00:46:27
    Holocaust survivor said "The way I judge
  • 00:46:29
    my friends is I asked one question who
  • 00:46:31
    would hide me?" A lot of Americans
  • 00:46:33
    remember that Canadians hit Americans in
  • 00:46:35
    the Iran hostage crisis And I hope that
  • 00:46:38
    uh your listeners and your voters
  • 00:46:40
    recognize there is a huge swath of
  • 00:46:42
    Americans that think of you not as not
  • 00:46:45
    of even as a friend but as siblings and
  • 00:46:48
    that we uh we hope and are committed to
  • 00:46:52
    maintaining what is arguably the one of
  • 00:46:53
    the strongest alliances in history that
  • 00:46:56
    I don't want to say don't take what's
  • 00:46:57
    going on seriously you have to but there
  • 00:46:59
    are a lot of Americans down here who are
  • 00:47:02
    who are brothers and sisters in in arms
  • 00:47:04
    in Canada You we really do think of you
  • 00:47:06
    as a as a sibling Thank you Scott
タグ
  • Canada
  • U.S. relations
  • tariffs
  • trade
  • housing crisis
  • climate action
  • geopolitics
  • global economy
  • Prime Minister
  • Mark Carney