Do we have our own problems or do we actually have space to spend and invest in this growth agenda that Alan's talking about?

Well, we have space until something cracks.

And I think that sounds trite, but it's not trite.

So at the moment, if you think of where we are and where we're likely to be after the budget, is we're running budget deficits in the order of 2% of GDP.

We are running net debt in the order of 42, 43% of GDP, but we are running gross debt.

Collectively, Canada and the provinces have over 100% of GDP.

And it's the gross that matters because it's the gross on which we have to... pay interest charges.

Finish the story, David, and tell us a little bit about what goes on between his years.

In fact, when people talk about short-term rentals inside our RPM community, like, you're one of the people that I'm like, "Well, you gotta talk to David because he's really an amazing operator." Can you talk about that pivot? Like why, why that experiment, and how did that, how did that get started for you?

Yeah.

So the, um, I, I'd say it started for two reasons.

So, um, by, you know, spring of '21, we were up to two duplexes in, in Oregon where we live, and, um, it was going well, but at the same time it sort of felt like it, this isn't happening at the velocity that I'd expect, right? If, if we're in a position where maybe we can buy, um, [lip smack] you know, a, a duplex every two years, and we're in a position where we're stacking up, you know, maybe 600 to 800 a month, um, something like that, because our, our first duplex was definitely a type C, you know, C class neighborhood.

Our second one was fairly new construction, A class kind of a thing because it, it just, it...

I, I felt more comfortable doing that over time.

I wanted a higher value asset compounding at, you know, sort of market rates.

What, what-- how much money can you make from one of these vacation rental properties in your case?

So how, how should people sort of look at this moment we're in, uh, and try to rationalize it to themselves or just accept that we're in a period of pretty profound uncertainty for the, the, the near term?

Well, uh, uh, uh, we, we are in a period where we're, we're, we're going to be able to, the, normally, uh, uh, as households, we're, we're going to be in a period where we're going to have to accept that a little less than what we had expected or hoped for, uh, and in terms of our, the current services we get from government and in terms of, uh, of, of, uh, uh, growth i- growth i- in the economy and growth in consumption.

That, that's kind of where we are.

We have to work our way through it, and I think, uh, uh, I hope that the government will lay out, uh, that broader plan that confirms what I have just said.

Mm-hmm.

Uh, that we've got a couple of tough years that we work through.

We will have done the right thing.

We will have raised the amount of, uh, capital that workers have to work with, so we will have raised their productivity and incomes, uh, through that investment.

Mm-hmm

... uh, in, in the very short run, uh, it doesn't help, uh, the long-run adjustment process which we have to make.

Uh, I mean, we learned this, uh, to our great pain, uh, in the 1970s, when we just didn't adjust.

We tried to cushion the oil shock in '73, right through again on '79, until finally we had to bite the bullet in, in 1980, '81, um, with, with high interest rates and very slow growth for a period of time in order to make the adjustment.

Well, we're having to adjust, as, as the prime minister has said, we're having to adjust to a changed world-Uh, and we all are gonna have to bite the bullet, uh, in terms of having a little bit less available for current consumption so we can make the investments, uh, in, uh, infrastructure, in security, uh, and in, uh, in plant and equipment for the ordinary worker to, uh, allow him or her to improve, uh, his productivity.

Um, uh, so this is not going to be a, a very easy period at all, and, uh, trying to offset every bit of that difficulty-

Mm

... any magic, uh, ball a- as to exactly how the economy and, and the government revenues are going to, going to perform or a- and to what adjustments he's gonna make in, in other programs.

David Dodge, how should Mr. Carney, how should Canada push away the idea of a 51st state?

Well, the first thing is the day-to-day negotiations, which are going to have to take place on trade, not just Canada-US, but the three countries in North American agreement.

That's all got to be redone.

And that's kind of a very practical thing.

a thing that Mr. Carney is going to have to focus on as will the president of Mexico.

And that all becomes really important to understand then what is the role of the United States in terms of a trade block, if you will, in the world as the world evolves.

seems to be dividing itself into blocks.

Dodge, realistically, what can Mr. Carney do to try to reorient the Canadian economy with less reliance on the U.S. trade?

David Dodge, how should Mr. Carney, how should Canada push away the idea of a 51st state?

Well, the first thing is, is the day-to-day negotiations which are gonna have to take place, uh, on trade, uh, eh, not just, uh, Canada, US, but, uh, um, uh, uh, eh, the three, uh, countries in North American, uh, uh, North American Agreement.

That's all got to be redone.

And that, that's kind of a very practical, uh, thing that, uh, uh, Mr. Carney's gonna have to focus on, um, as will, uh, as will the, uh, president, uh, of Mexico.

Um, and that all becomes really important to understand then, what is the role of, uh, the United States, eh, in terms of, uh, a trade block, if you will, in the world, as the world, uh, seems to be dividing itself into blocks? Um, and, uh, then what, uh, how, how does North America fit? Because obviously, uh, North America is stronger taken as a whole, uh, than, uh, than not.

And so, eh- the practical thing is going to be to discuss, uh, with, uh, the American administration, uh, eh, not just, uh, the economic and trade arrangements, but the security arrangement, uh, for North America, which is, uh, particularly important, uh, how we're gonna deal with the Arctic, um, eh, which is very important.

So it, it, it, it...

Working as a public official in Canada, and you know Ken Dryden so well, quote, in the Toronto Globe and Mail, "We have never been a big guy like the United States." (laughs) What does Canada need to do to defend against the big guy?