Is that what you take out of this?

Well, of course.

I mean, the budget projects about a $63 billion deficit for the coming year, $59 billion by 2030-31.

I mean, you and I have talked about this endlessly.

This is what Liberal governments do.

They tax and they spend.

People who don't like me are going to say they're not taxing, they're just borrowing on the debt and the deficit.

So, I mean, that's troubling, right? Of course

Is that what you take out of this?

Well, of course.

I mean, the budget projects about a $63 billion deficit for the coming year, $59 billion by 2030, 31.

I mean, you and I have talked about this endlessly.

This is what liberal governments do.

They tax and they spend.

People who don't like me are going to say they're not taxing, they're just borrowing on the debt and the deficit.

So, I mean, that's troubling, right?

What on earth is going on here with this?

Well, it's a good question.

I mean, we've always been told that money can't buy love, but economists have discovered since the days of Gary Becker in the 60s studying this, that money can certainly improve your chances of finding love.

And what this study says is that men who suddenly become wealthier are more likely to get married.

So it turns out that financial security can make somebody a more attractive marriage prospect.

So you know romance might be priceless but apparently having money in the bank doesn't hurt and so why when men win the lottery they're more likely to get married but as you said when women um when married women win the lottery they're more likely to get divorced and that's a fascinating disconnect right because the same financial windfall changes uh people in the relationship in such diverse ways right and so i like to think of this study as kind of proving a couple things one is that i don't think money money doesn't necessarily destroy marriages it can give people the freedom to leave them and i think that might be the most important finding women who win the lottery were more likely to divorce shortly afterward but the effect trickles off over time and so researchers suspect that money didn't necessarily destroy their otherwise happy marriage.

It gave women the financial independence to leave marriages they may have already wanted to leave.

your old career.

What on earth is going on here with this?

Well, it's a good question.

I mean, we've always been told that money can't buy love, but economists have discovered since the days of Gary Becker in the 60s studying this, that money can certainly improve your chances of finding love.

And what this study says is that men who suddenly become wealthier are more likely to get married.

So it turns out that financial security can make somebody a more attractive marriage prospect.

So you know, romance might be priceless, but apparently having money in the bank doesn't hurt.

And so when men win the lottery, they're more likely to get married.

can't go back to your old

I'm worried that they don't think that way.

No, but they should, Greg.

So you and I were discussing an article that Chris Ragon wrote.

He's one of the smartest people in this country.

And what he's saying and what Polyev is trying to get across is that while we're not in a debt crisis today, we're slowly making ourselves more vulnerable to the next one.

And yet, all you have to do is think about what happened during COVID.

The government borrowed enormous amounts of money to keep households and businesses afloat.

They made some tough decisions.

I'm worried that they don't think that way.

No, but they should, Greg.

So you and I were discussing an article that Chris Ragon wrote.

He's one of the smartest people in this country.

And what he's saying and what Polyev is trying to get across is that while we're not in a debt crisis today, we're slowly making ourselves more vulnerable to the next one.

And yet, all you have to do is think about what happened during COVID.

The government borrowed enormous amounts of money to keep households and businesses afloat.

They made some tough decisions.

Strange, right? I mean, I remember growing up and hearing that song and it is just bizarre, but it's hung around for a long, long time and I'm not sure why.

I don't know either, but a lot of things they did were weird but successful.

And speaking of weird and unsuccessful, that brings us back to the Canadian economy, which really, we shouldn't be surprised at the fact that real gross domestic product hasn't grown because, you know, there's an expression, right, that if you keep doing the same stupid thing, you're going to get the same stupid result.

And, you know, so what did the government of this country do for a very long time? And by that, I mean almost 12 years.

They said, well, we weren't really attracting any research, development, investment, productivity gains.

So let's just drop the interest rate and see if that keeps consumption at least at a level that makes real GDP look acceptable.

Well, now they turn around and they raise the interest rate.

This is going to have zero impact on fuel prices and probably on inflation as a result.

Strange, right? I mean, I remember growing up and hearing that song and it is just bizarre, but it's hung around for a long, long time and I'm not sure why.

I don't know either, but a lot of things they did were weird but successful.

And speaking of weird and unsuccessful, that brings us back to the Canadian economy, which really, we shouldn't be surprised at the fact that real gross domestic product hasn't grown because, you know, there's an expression, right, that if you keep doing the same stupid thing, you're going to get the same stupid result.

and you know so what did the what did the government of this country do for a very long time and by that i mean almost 12 years is they said well we weren't really attracting any research development investment productivity gains so let's just drop the interest rate and see if that keeps consumption at least at a level that makes real gdp look acceptable Well, now they turn around and they raise the interest rate.

So what, you know, like that's like, first of all, two things.

It's going to take a dip in consumption and investment.

So this going nowhere real GDP is now going to ensure it goes nowhere for the next quarter.

said hey listen i mean those are the numbers yeah like we talked about them on the air yeah you take the price of gas out of there and everything's perfect you're bang on exactly where you want to be bank of canada said yeah you know most of this inflation is driven by energy prices so why do this because let's let's be honest here this is going to have zero impact on fuel prices and probably on inflation as a result

These stores, where are they located, I think is what you're getting at.

And there's more than a thousand.

They're all over North America.

And so what they've done is they realized, and it was, you know, sometimes you gotta be lucky, but sometimes you gotta be smart.

And there's an intersection there.

And they figured out that a vacant storefront produces no rent, but Spirit comes along, pays for a couple of months, and then vanishes before Christmas.

I mean, it's a beautiful example of how one company's biggest problem becomes another company's business opportunity.

What do you think? I would wear that actually.

These stores, where are they located, I think is what you're getting at.

And there's more than a thousand.

They're all over North America.

And so what they've done is they realized, and it was, you know, sometimes you gotta be lucky, but sometimes you gotta be smart.

And there's an intersection there.

And they figured out that a vacant storefront produces no rent, but Spirit comes along, pays for a couple of months, and then vanishes before Christmas.

I mean, it's a beautiful example of how one company's biggest problem becomes another company's business opportunity.

What do you think? I would wear that actually.

Are we going up again in October 26th?

I actually don't think they're going to raise, and I don't think they should raise.

And I'll tell you why, and good morning.

Yeah.

Because the Bank of Canada, when it doesn't really know what to do, should do nothing.

It's not like government.

It's a different arm.

Every other mayor has been a reaction to the mayor before that.

Are we going up again in October 26th?

I actually don't think they're going to raise and I don't think they should raise.

And I'll tell you why.

And good morning.

Yeah, because the Bank of Canada, when it doesn't really know what to do, should do nothing.

It's not like government.

It's a different arm.

Every other mayor has been a reaction to the mayor before that.

What do you make of this? Some of the relief on the way, but yet some of the pain also accompanying it.

This is the weirdest thing I've ever seen.

I mean, this is just wrapped in irony.

I mean, let's just take a step back.

The Americans initially imposed tariffs to protect American businesses.

And now they are removing some tariffs to protect American businesses from the same tariffs.

Now, if that doesn't illustrate unintended consequences of protectionism, I don't know what does.

Okay, so if you're advising Ottawa, what's the right response here? Do you just quietly welcome these exemptions? Do you push for a broader deal? Do you fire up the old retaliatory engine again? What would you recommend?

How... consequential is the fact that we've slipped outside of the target range i mean does this what does this tell us eric

well it tells me shade the banks canada is caught between two fires we've got inflation too high to comfortably cut interest rates but the economy is too fundamentally weak to comfort to comfortably raise them so i think that the bank here has to struggle with these two problems, right? And unfortunately, the solution to one problem, as we've discussed, can make the other one worse off.

And what scares me is that I'm worried about Mr. and Mrs.

Consumer, and higher interest rates don't produce one barrel of oil or another litre of diesel, right? They can reduce demand, but they can't fix a disruption to the global energy supply.

So I think the Bank of Canada really has no choice here.

They have to leave the interest rate unchanged.

Interesting.

How significant is the fact that the vote came in the way that it did? I mean, bring some stability, but how much, Eric? I mean, what's your reaction to what happened in Alberta this week?

How consequential is the fact that we've slipped outside of the target range? I mean, does this, what does this tell us, Eric?

Well, it tells me, Shay, the Bank of Canada is caught between two fires.

We've got inflation too high to comfortably cut interest rates, but the economy is too fundamentally weak to comfortably raise them.

So I think that the bank here has to struggle with these two problems, right? And unfortunately, the solution to one problem, as we've discussed, can make the other one worse off.

And what scares me is that I'm worried about Mr. and Mrs.

Consumer, and higher interest rates don't produce one barrel of oil or another litre of diesel, right? They can reduce demand, but they can't fix a disruption to the global energy supply.

So I think the Bank of Canada really has no choice here.

How significant is the fact that the vote came in the way that it did? I mean, to bring some stability, but how much, Eric? I mean, what's your reaction to what happened in Alberta this week?

Could we revise our inflation forecast based on what we might see today?

Well, we're going to have to do just that.

I mean, the question, this is really a question of economics and whether it comes down to core inflation or broader inflation.

So, you know, there's one scenario that says inflation is rising basically because of oil and the bank may be inclined to look through a temporary energy shock, particularly if the broader economy and the labor market remain weak.

So that's a fancy way of saying if it's just in the core, we can deal with that.

Scenario B is worse, which is what happens when you have scenario A plus oil pushing up the prices across the economy.

So if transportation, food and services start to rise persistently, the bank has a harder decision because it may need to keep interest rates higher.

There's a lot that has economic implications for the vote tonight, not just from a cultural perspective.

Could we revise our inflation forecast based on what we might see today?

Well, we're going to have to do just that.

I mean, the question, this is really a question of economics and whether it comes down to core inflation or broader inflation.

So, you know, there's one scenario that says inflation is rising basically because of oil and the bank may be inclined to look through inflation.

a temporary energy shock, particularly if the broader economy and the labor market remain weak.

So that's a fancy way of saying if it's just in the core, we can deal with that.

Scenario B is worse, which is what happens when you have scenario A plus oil pushing up the prices across the economy.

There's a lot that has economic implications for the vote tonight, not just from a cultural perspective.

But I'm thinking we're gonna see similar things happening here in this country, aren't we? I mean, just based on fuel prices alone, we're into an inflationary period, aren't we?

Yeah, we really are.

Now, we have to remember that Canada and the United States measure inflation a little bit differently, so we always have to compare apples to apples.

But first, you know, just what's going on in the United States, it's really three things.

It's higher oil prices, it's the tariffs, and then there's sort of broader inflation pressures on things like shelter and airfare.

And so then the question always comes down to what are we gonna look for in Canada? And I think the critical question here is whether inflation remains concentrated in things like gas and energy, or is it becoming more widespread across the economy? If, if headline inflation rises, but underlying price pressures are kinda contained, we're okay.

If core inflation and then a broad range of prices begin accelerating, Shea, that is a much more difficult problem for the Bank of Canada-

Mm-hmm.

But I'm thinking we're gonna see similar things happening here in this country, aren't we? I mean, just based on fuel prices alone, we're into an inflationary period, aren't we?

Yeah, we really are.

Now, we have to remember that Canada and the United States measure inflation a little bit differently, so we always have to compare apples to apples.

But first, you know, just what's going on in the United States, it's really three things.

It's higher oil prices, it's the tariffs, and then there's sort of broader inflation pressures on things like shelter and airfare.

And so then the question always comes down to, what are we gonna look for in Canada? And I think the critical question here is whether inflation remains concentrated in things like gas and energy, or is it becoming more widespread across the economy? If, if headline inflation rises, but underlying price pressures are kinda contained, we're okay.

If core inflation and then a broad range of prices begin accelerating, Shea, that is a much more difficult problem for the Bank of Canada-

Mm-hmm.

[laughs] Okay, back to the orig- so y- if you do give somebody something that has the appearance of a, of a full gift, but it has strings, that's different than just, "Here, have this," and then months later, "Can I have it back?"

"Here, have this" means, "Here, take this.

It is now your property.

Do what you want.

Go in good health." You, if you give like, you know, parameters, then that's a whole other story.

But this didn't seem like there were many parameters.

Nowhere in the story did it say they said, "We may want it back," or, "Please keep it in good running order because we may want it back." Like, I don't know.

Oh

[laughs] Okay, back to the orig- so y- if you do give somebody something that has the appearance of a, of a full gift, but it has strings, that's different than just, "Here, have this," and then months later, "Can I have it back?"

"Here, have this" means, "Here, take this.

It is now your property.

Do what you want.

Go in good health." You, if you give like, you know, parameters, then that's a whole other story.

But this didn't seem like there were many parameters.

Nowhere in the story did it say they said, "We may want it back," or, "Please keep it in good running order because we may want it back." Like- I don't know.

Oh.

But as I'm pointing out, is there is are the opportunities kind of capped for businesses and workers on the Canadian side of things?

You know what? I'm going to do the rare era cam thing and go glass half full on this.

I mean, first of all, 300 delegates seems crazy to me.

I don't even know 300 people.

But we know that our country has spent so many decades, Greg, putting so much of its economic eggs in one basket.

And I'm sitting in the basket right now.

And now we're discovering that that trade basket comes with a tariff attached.

India strikes me as a little bit different just because of the massive, massive population and expansion for growth.

But as I'm pointing out, are the opportunities kind of capped for businesses and workers on the Canadian side of things?

You know what? I'm going to do the rare era cam thing and go glass half full on this.

I mean, first of all, 300 delegates seems crazy to me.

I don't even know 300 people.

But we know that our country has spent so many decades, Greg, putting so much of its economic eggs in one basket.

And I'm sitting in the basket right now.

And now we're discovering that that trade basket comes with a tariff attached.

India strikes me as a little bit different just because of the massive, massive population and expansion for growth.

What does the size of this delegation tell us about how serious Ottawa is taking this India relationship right now?

I think it tells us a lot, Rob.

I mean, we know that Canada as a country, we've spent decades putting almost all of our economic eggs into an American basket, right? And unfortunately, we're discovering that that basket comes with a tariff attached, right? So India represents an enormous opportunity to diversify our trade.

And it's funny we don't talk about it more because it's one of the world's great growth markets.

And if Canadian businesses want to grow over the next 20 years and diversify away from the U.S., They just they realize now I'd like to think they can't afford to ignore a country with more than one point four billion potential customers.

So you keep mentioning the number.

It's huge.

And since there's been this standoff between the two countries, what do you think that's done for Canada's street cred? Like beyond just sheer optics, do you think that's made them an easier partner to deal with? Or do you think people are still waiting for that deal to get done before they fully invest in Canada?

So is this good help for people that are struggling or is this more of a political move that mostly helps those higher income drivers?

Well, it's a performative move to some extent.

I'll say this, economically, it's better than taking people's money and then just giving it back to them as a refund or some sort of tax incentive dividend.

It is better to take the money off at the pump because it's always nicer to pay a little bit less.

So then the question is always in economics is do the gainers gain more than the losers lose? And you're half right.

I mean, people that tend to be wealthier that can afford more gas, they get a bigger break.

But that's a question of elasticity, which just means who needs it worse.

But when people are feeling that house costs are crushing them, does that separation still make sense? Like at what point do high home prices and mortgage stress feed back into inflation and financial risk?