Ooh, are you about to give us a hot take here?

Here is a, here is a hot take.

Uh, and it's not a secret.

I don't like, um, the Prime Minister, Mark Carney.

I think he is so far done absolutely nothing.

He came in, for, for people listening, he came in on one platform.

He was gonna be the person to bring the US to his knees.

Are you a fan of, of the quote-unquote "boys' trip" and the corresponding girls' trip, very, like, gendered hangouts with your friends?

So how do you handle questions? So you might have the student who is willing to, you know, raise their hand or to, to voice their question in front of their hundreds of other classmates, but you might also have a number of students that, like, would rather not, right? So, uh, how do you provide opportunities to make sure that students understand the material and can ask the questions they need?

That's, that's again a two-part answer.

I always, for every lecture, I have a student assistant, one of the front row people, and I tell them, "You're my assistant today.

You're my caddy." And if a student puts up their hand, because I'm usually off on some tirade that I'm lecturing about, I need you to jump in and say, "Dr.

Kam, there's a question." And then I, I answer that question.

So I always-- And that, of course, brings in the student assistant, and it brings in the students, that they know if they ask a question, I can find them.

Now, what about the ones-- Now, I teach a school that, at a school that has mostly first-generation Canadians.

How do you think about that responsibility? H- how does it influence your decision about what to cover and how much to cover?

At the risk of making this show educational and covering current events, which is a risk I'm willing to take, you as an economics professor who appears on the radio and TV and talks about what's in the news, has there been anything going on? I imagine it's been a very quiet period and you haven't discussed anything to do with tariffs in a while.

You know something? I actually was telling one of the hosts today, I said, if I never speak about tariffs again, it'll be too soon because yes, this trade war is in full bloom.

And I do have a little bit, I think one of the reasons that I get asked, Doc, is because I'm kind of in the minority on this.

And I'll give you an excellent example.

Oh, are you about to give us a hot take here? Here's a here's a hot take.

And it's not a secret.

I don't like the prime minister, Mark Carney.

Are you a fan of the quote unquote boys trip and the corresponding girls trip? Very like gendered hangouts with your friends?

Did John Kretchen say step in or say something too far? Go to what did you think of it?

I thought it was perfect.

I actually thought it was perfect.

And I thought it reminded me of an era that's long since vanished when there were statesmen and stateswomen who could stand up and take control of an audience and get their message across.

And you actually believe them when they were speaking.

Now, full transparency, I didn't vote for Mr. Krecha, but it doesn't mean a little bit like Ed Broadbent.

I didn't vote for him either.

They probably wouldn't agree on a lot of policy, but I like they both did what they did.

And we saw massive, massive stimulus spending, right? Like huge amounts of money.

Well, that's right.

And the reason for that, there's a couple of reasons for that.

One is just obvious that there has never been a greater call to action to jumpstart an economy because the economy for a few days was effectively dead.

I mean, nothing happened for four or five days.

But people have to remember, and I know a lot of the people listening maybe weren't alive, the U.S. economy.

The economy had crashed long before this.

Yeah.

and then we saw central banks particularly the federal reserve in the united states rushing in to try and because as you say things were just tanking it was it was really really bad and we saw massive massive stimulus spending right like huge amounts of money

Well, that's right.

And the reason for that, there's a couple of reasons for that.

One is just obvious that there has never been a greater call to action to jumpstart an economy because the economy for a few days was effectively dead.

I mean, nothing happened for four or five days.

But people have to remember, and I know a lot of the people listening maybe weren't alive.

The U.S. economy had crashed long before this.

But how long until we were sort of, okay, we can put that behind us and things get back to normal? Because, I mean, travel, all the rest of that stuff, people were worried about that for years, Eric.

That's a big, big shift, Eric, isn't it?

Yeah, it's a very large shift, and it's reflective of the fact that now, you know, the risk and uncertainty over all the tariffs and quotas and this and that, it's all set in, and businesses are making their plans for the new year, believe it or not.

And so job losses are going to happen, and it's a reflection of not just...

What's going on north-south in this country, but also east-west.

All the provinces the government made about tearing down interprovincial trade barriers hasn't come true.

There is no deal with the United States.

There is kind of nothing.

They kind of had to, didn't they, Eric? I mean, they lifted it back in April, and nothing has changed since then that would warrant them bringing it back.

That's a big, big shift, Eric, isn't it?

Yeah, it's a very large shift, and it's reflective of the fact that now, you know, the risk and uncertainty over all the tariffs and quotas and this and that, it's all set in, and businesses are making their plans for the new year, believe it or not, and so job losses are going to happen, and it's a reflection of not just... what's going on north south in this country but also east west all the provinces the province the government made about tearing down interprovincial trade barriers hasn't come true there is no deal with the united states there is kind of nothing and so the government kind of has one bullet in the holster right and that's low interest rates so they're going to leave interest rates where they are and hope and pray that it props up um consumer spending and business spending to a level that makes gdp look acceptable but you know the you can't put the toothpaste back in the tube shay we're starting to bleed jobs and as manufacturing flees the country and that's not going to turn around anytime soon

that's

exactly right that's exactly right and the government right now is looking for any low-hanging fruit to hang on to the support they have from the public and so you know cutting the gas tax right it's a visible component of the price and it's about 115 a year for the average household or about 10 a month now that's helpful but it's not a solution to any affordability problem and what i'd like listeners to know is the government can't eliminate the cost here And that's the key economic point here.

Lower gas taxes, Shay, mean less government revenue.

So they're talking about this being about $2.1 billion in relief since 2022.

Awesome.

But where's that revenue going to come from? That's revenue that's not collected by the government.

But is this a sign of some positivity for our quarterly growth?

it is a sign of positivity but you're right you have to use nuance and there's two things you have to remember number one we've quite recently had a restriction on immigration so the numbers coming into this country are falling and you remember from grade 12 math greg that when the denominator goes down the fraction goes up so that's a little mathematics trick that probably makes you feel sentimental for high school And number two, let's remember that the numbers they gave are annualized, as you said, and so 3.3% sounds enormous, but actual Q2 growth was about 0.8%, and that follows zero Q1 growth.

So what we're seeing here is a bit of a rebound from complete growth.

stagnation.

And there are some genuinely encouraging pieces, right? Household spending seems to be up and business investment is coming back a little bit, I think.

Remember, these are backward-looking numbers because these measure a period ago.

But I think that some of the risk and uncertainty now has become structural and and firms and industry have sort of accounted for them in their numbers.

An indecision is just never good for an economy.

We're in a full-blown trade war at this point, right?

Yeah, we're in nothing less than a full-blown trade war.

And I actually thought that one of the, you know, I always look for something encouraging to come out.

And yesterday, actually, I thought Scott Moe made an amazingly good point when he talked about the difference between retaliation and self-inflicted damage.

I mean, as you and I have noted, you can't take down the United States.

Canada can't anyway, not necessarily.

Not when they're 14, 15 size larger.

Where do you think we go from here, Eric?

We're in a full-blown trade war at this point, right?

Yeah, we're in nothing less than a full-blown trade war.

And I actually thought that one of the, you know, I always look for something encouraging to come out.

And yesterday, actually, I thought Scott Moe made an amazingly good point when he talked about the difference between retaliation and self-inflicted damage.

I mean, as you and I have noted, you can't take down the United States.

Canada can't anyway, not necessarily.

when they're 14, 15 size larger.

But if it's a if it's a tax on Americans when Trump does it, it's a tax on Canadians when we do it, isn't it?

They make more plywood, better plywood more easily than Arizona, for example.

That's exactly right.

And so you start to trade in the goods that you produce most efficiently.

You produce them and you sell them.

And then you're able to buy the goods that you produce less efficiently.

And in theory, and it tends to work, that that makes both countries better off.

However, there's an old adage in sports, Lisa, that I like, which is you can't teach height.

How often do you tell them, we didn't plan that gap?

They make more plywood, better plywood more easily than Arizona, for example.

That's exactly right.

And so you start to trade in the goods that you produce most efficiently.

You produce them and you sell them.

And then you're able to buy the goods that you produce less efficiently.

And in theory, and it tends to work, that that makes both countries better off.

However, there's an old adage in sports, Lisa, that I like, which is you can't teach height.

How often do you tell them we didn't plan that gap?

But if we're handing out blame for how we're still here over 16-plus months, I think a lot of that lands on his desk, and I think we're in those... one of those two-things-can-be-true-at-the-same-time issues.

That's exactly what it is, and I've been asked a lot about this.

Did Canada do the right thing by walking away from the trade talks? I think economically we have to separate out two questions, Greg.

Is the collapse of the talks bad for the Canadian economy? No question.

But does that mean that Canada should have just accepted the deal or any deal? Not necessarily, right? Uh, the, the immediate economic consequences aren't difficult to predict.

United States shoves a 50% tariff on billions of dollars of Canadian goods.

That makes our products dramatically more expensive for American buyers, which means Canadian exporters can lose sales, production falls, investment postponed, and we know that slippery slope.

And a, and a, and a pep rally

come? And

so, because we can't.

Because they're the world's largest economy.

They're 12 to 13 times bigger than we are.

And given that they are our biggest exporter and biggest importer to the tune of about 85%, it's not that they don't It's not that Canada doesn't help their economy, but they could, in theory, survive without Canada.

Canada, in theory, in practice, and in everything else, cannot survive without the United States.

So Canada had to make a deal.

So what would an acceptable deal look like, do you think, Eric? Where do you think we come down and say, you know what, it's not that bad?

here we are we're uh i don't know getting closer and closer to the the new deadline when it comes to uh the tariffs and they could come in i i guess it would be in what about 12 hours 14 hours something like that um we don't know the details of whatever the deal is that they're working on where do you think we are well give us your status update if you will

well while i have No basis to say in fact, because I'm not in the room where it happens, as they say in Hamilton.

I have a very strong feeling that Canada is really at the mercy of the United States.

And I don't say that with any pride, Shay, but I knew that we were going to have trouble the minute, the second that the new prime minister went in with this elbows up, we're in a war, we're in a battle, but we can win this.

if we're unified.

As soon as he did that, to be blunt, I knew this thing was over.

And so, because we can't, because they're the world's largest economy.

So what would an acceptable deal look like, do you think, Eric? Where do you think we come down and say, you know what? It's not that bad.

What do you think about what, uh, what we've seen, and the lack of urgency, and what we could potentially see over the next couple days leading into this Wednesday major deadline?

deadline?Well, I think you brought up the most important point, which is I think Canadians have to be honest with who we are in this fight, right? We are dealing with the largest economy in the world, and it happens to be our largest trading partner, and it happens to be for most people 90 minutes away.

And so when you put all of that together, we can never underestimate the need this country has for the United States.

And to say anything else is bravado or hubris.

So that's number one.

Number two, I really think we're asking the wrong questions at times about this.

Everybody wants to know, does Canada cave to Trump or did we stand up to him? And I don't think that's how negotiations go, Greg.

Mm-hmm.

Is that passive aggressive? Where do we weigh in? Iraq?

Getting somebody's name right at work or anywhere else is one of the most basic forms of courtesy.

Now, everyone makes mistakes, David.

I mispronounce a name.

You mispronounce a name.

We apologize.

We move on.

What about regional pronunciations? Like you move a place and a name gets pronounced differently and you just can't get your thick skull to get the new pronunciation.

I hate it, but I just tolerate it and correct occasionally.

And you know, one of these days I'm gonna tell my mother and father what kind of a miserable life they gave me, because my first name is Avrom.

Eric is my middle name.

So I always go by Eric.

I've always gone by Eric.

But every single first day of school, you go to a government office, everybody says, "Next, Avrom," and I'm sitting there going, "Well, where's Avrom?" And I forget that it's actually my first name.

Or let me tell you, the poor grade seven who went to Don Valley Middle School and wanted to meet girls, and the person who typed in my name in 1979 forgot to put the space, so I was Avromeric.

[laughs]

What do you think? Do we need to keep that tax at bay?

Okay, so let's nuance this.

So the answer is yes, but then we're going to dig a little bit deeper.

So is this thing saving money? Well, yeah.

They say it saves about $115 a year for the average household.

That's less than $10 a month.

No, helpful, but probably not fundamentally changing anybody's household budget, right? So I think there's a couple good questions to ask.

I wouldn't call it a line in the sand, so to speak, but it sounds like maybe they've said enough is enough.

No

... changing anybody's household budget, right? So I think there's a couple good questions to ask.

First one, is cutting the gas tax a good way to deal with affordability? Well, uh, it depends what side of the outhouse you want.

It's immediate, no applications, no government programs, no tax credit.

You pull into the gas station, save a bit of money.

But it's also a very blunt instrument, and you just don't save a lot, right? So I don't really know, uh, is this gonna save the world? No.

Save the environment? No.

I wouldn't call it a line in the sand, so to speak, but it sounds like maybe they've said enough is enough.

What are you looking for here for news, for decisions, for caving, for capitulation, for standing up strong? What are you expecting?

Well, to be honest, I think we're gonna give in on probably nine and a half out of 10 issues, because I think the prime minister is really starting to hear footsteps from people, from large business, from small business, that we need a trade deal, because I think that the risk and uncertainty surrounding not having a deal has really reached a zenith.

And I think even supporters of the Liberal Party want a deal and realize that the united states is not going anywhere they are always going to be our major trading partner we can't survive economically without them and something has to be done and people don't want to hear this i think in a lot of ways and maybe a little bit as luck donald trump played this about as well as he could because he knew that at some point canada would have to crawl back and make a deal and so i assume that the prime minister will crawl back and make a deal.

Canadians probably won't like it, but at least it'll be a deal.

And then in some odd way, LeBlanc and Carney will stand up and say, see, I told you we'd make a deal.

I just hope it's a decent one, Greg.

I really do.

They're all a little stressed about this one.

How significant is that contrast? Does it matter, Eric?

Well, it always matters.

Economics always matters.

It's just the magnitude of how much does it matter.

And it's not enough to scare the United States.

But everything we just talked about right now is a little bit of a downturn with the U.S. Their consumption and investment numbers are down.

And here's why, at least in my opinion, we have to worry primarily about the United States.

I talk to a lot of Canadians who don't like it just as much as the Americans don't like it.

How significant is that contrast? Does it matter, Eric?

Well, it always matters.

Economics always matters.

It's just the magnitude of how much does it matter.

And it's not enough to scare the United States.

But everything we just talked about right now is a little bit of a downturn with the U.S. Their consumption and investment numbers are down.

And here's why, at least in my opinion.

I talk to a lot of Canadians who don't like it just as much as the Americans don't like it.

[laughs]

... for as long as I can remember, including some of my own.

I think if you're three people out at dinner and two of them are a couple, then they're paying two-thirds, if not even on occasion, out of generosity, treating the other person saying, "Listen, we're, we're already almost 70% of the bill, so we got this.

And but at most you should have to pay a third." This, I mean, what is this two-thirds equals a half? That's not math.

That doesn't work out.

So I don't know.

And, and if they are, and if those two people say, "Let's just split it in half," uh, there's a, there's a term called a schnora.

Wow, that's very, very biblical in this regard, yeah.