Now, so how do you, like, explain to us what parts of the budget will, you know, and how they're going to change the focus of the Canadian economy, this shift that we need as a result of, I guess, the tariffs that started from the United States?

It's interesting you ask that.

The shift actually started with last year's budget in this, so Carney's first budget, Prime Minister Carney's first budget.

And now this is the second budget is consolidating that shift.

And so to answer your question, how is it doing that? So again, it starts last year.

And last year, the government just really drastically changes the direction of the Canadian economy by deciding to put the weight of the federal government and its spending and tax powers and borrowing powers behind a series of major projects.

And now these are called the major projects, and there's an office.

Are we being successful in shifting the focus of our economy?

Now, so how do you, like, explain to us what parts of the budget will, you know, and how they're going to change the focus of the Canadian economy, this shift that we need as a result of, I guess, the tariffs that started from the United States?

It's interesting you ask that.

The shift actually started with last year's budget in this, so Carney's first budget, Prime Minister Carney's first budget.

And now the second budget is consolidating that shift.

And so to answer your question, how is it doing that? So again, it starts last year.

And last year, the government just really drastically changes the direction of the Canadian economy by deciding to put the weight of the federal government and its spending and tax powers and borrowing powers behind a series of major projects.

And now these are called the major projects, and there's an office.

Are we being successful in shifting the focus of our economy?

How important is this vote for Canada in your mind?

Well, it's important in that, I don't think it's earth shattering, but it's important in that if the Democrats take control of the House, I don't think the situation with the Trump administration will get worse.

But I don't expect there to be an abrupt and comprehensive reversal of what President Trump has done.

And the reason I say that for a couple of reasons.

One is that President Trump's been ruling in effect by decree, by executive order.

And that worked for a while, but we saw the Supreme Court, not the House or the Senate, but we saw the Supreme Court strike down about half of his tariffs, the ones that fell under this Emergency Economic Act.

So it wasn't Congress, it wasn't the House that stopped.

But at the end of the day, Canada still, at its core, will have challenges with America, even if Donald Trump isn't there?

Do you see those economic ties as further weakening no matter what in the medium term? Or is this an economic and diplomatic relationship that can recover beyond Trump's second term in office?

I think it can recover.

At the same time, I think we should remember that The U.S. border with the rest of the world and with Canada has been thickening since the aftermath of 9-11.

The border thickened initially for security-related reasons, and then it thickened in the wake of the financial crisis.

It thickened during COVID, and then COVID was in between Trump's two terms.

And so the border started also to thicken in Trump's first term, and now it's really gotten wider, the border, in the second term, wider with tariffs and restrictive measures.

And One of the reasons that the tariffs are here, it's not just madness.

Is that a strategy that you see as likely to be effective?

So with respect to what you did here, speeches that were made, people talking in small groups, what was the general sort of reaction from people there that you gauged?

I mean, it was mostly quite positive.

There were sovereign wealth funds from different countries, from Asia, from the Persian Gulf.

And they're very excited that Canada's got a more business-minded prime minister.

They're interested in investing in Canada.

Some of their existing investments, like U.S. Treasury securities, U.S. government bonds, they seem to be worried about because there's a feeling that the dollar will decline and that the United States cannot sustain the amount of debt that they're issuing, the amount of IOUs they're printing and sending out to the world.

So there is great interest in alternative investments.

What do you make of this? And how significant is this from an economic point of view?

Is there any kind of historical precedence for this that you're aware of?

Well, we you know, we did we did have a trade war, I believe, at the turn of the century with the United States or just before the turn of the last century.

in the 1890s.

And that helped propel Canada towards more independence.

You know, we were technically a country since 1867, or have been a country since then.

But we were still also a dominion of the British Empire.

And a trade war in the 1890s with the United States, with like a you could say a reformist government on the one hand, an anti-monopoly government, but also an anti-free trade administration in the United States at that time.

Yeah.

So is it does it bother them, do you think? Or why is it they were spending so much time using that or making that the bargaining chip?

Well, that does put a thorn in the administration's side because they're getting phone calls, they're getting emails from those governors of those states with the distilleries, with Tennessee Sour Mash Whiskey and Kentucky Bourbon and the beer-making states and the wine-making states like California.

And so it's a thorn or many thorns in their side.

And so they have to appear like they're responding.

But they didn't respond last year when they had these bans in place or last fall.

They've only really started to concentrate on it recently because of the midterm elections.

And President Trump wants to look like he's had a victory.

It's going to be people that are the ones who are punished by this, isn't it?

What does this kind of message coming out of the White House doing to the Canadian minds?

Well, it's been, I mean, this started in Trump's first term.

He imposed tariffs on Canadian steel and aluminum.

We retaliated.

So we had a taste of it during the first term.

But this is something completely different.

This is on a regular basis over the past 18, 19 months.

And once again, I want to go to our guest in Canada, Professor Kara Kezian but could it be a beginning you know for Canada to seriously think and look beyond trading with the United States diversification as you said Mr. Carney said you know this is not even our plan B it has been plan A from the start what do you make of that and what's the implication for other economies such as China for instance

They seem to be... united and a lot of people last night to your point all the pundits were saying oh well for sure we've had to make concessions it's going to be bad for carny now it looks like we walked away so i think public opinion says yeah go carny go but what about the economy uh julian because you know 20 billion um something upwards of 20 billion dollars of of goods and services are going to be affected starting already like starting last night

No, and it's terrible for the businesses, the business owners, and obviously there's more of these, the workers that work in those industries.

And RBC, the Royal Bank of Canada, has said that it's not going to be a big impact, that it's only $28 billion.

But if you sell 60% of your honey in BC to the United States, if you sell a lot of your dairy products from Quebec into the United States, and all of the other industries, if you make hockey equipment and sell it to Wisconsin or Vermont or New York, this is devastating.

And so, you know, statistics are just statistics until it hits you.

So overall, in terms of our economy, okay, it's not going to be a big hit, but it's going to be devastating for thousands and thousands of people across the country in the sectors that are now facing 50% tariff.

I guess what I'm wondering is if you have a comment on, you know, Mark Carney saying dollar for dollar counter tariffs, like what do you expect to see from the Canadian government? Like, what does that actually mean?

Well, we did that in April of 2025 when Trump came out with those global tariffs, including against Canada.

Signed then

...

in 2020.

And so there was a change in US access to our dairy market went up to 3.9%.

And since then, since 2020, over the past six years, um, they haven't used that 3.94% access.

And so people have been complaining, perhaps the governor of Wisconsin and other dairy states, maybe Massachusetts, complaining that, well, we still don't have access for our dairy farmers.

The access is not for US dairy farmers.

Do you have any idea what that would be about?

What, what's your take on what's going on here?

Well, I think the US has backed off on some of its demands.

There's, there's...

So let- I'll start with, uh, some industries.

Autos, metals like aluminum and, uh, steel and lumber.

You know, they've said, like President Trump said today, and I believe Jamieson Greer said, well, the other, many times before today, that there will be tariffs on these things.

So the question is, we just don't know the rates yet.

O- obviously, I don't know.

Um, th- this is so hard to kind of assess, and I, I know it's a bit of an unfair question, but what-- where do you th- see things sitting right now in regards to this conversation and the negotiations?

I just...

I, I, I think there's a stalemate.

Um, you know, the Trump administration, President Trump, I mean, they're looking for...

I mean, they're looking for concessions, but they're also looking for a victory ahead of the midterm elections.

Um, they're coming.

They, they say they're coming for our dairy.

Uh, what, what do you think this means for our province?

What do you think from what you just heard?

No, I agree, Aaron.

It doesn't sound promising at all.

And I think, uh, I mean, I think when we spoke a few times earlier this year that we, we knew it wasn't gonna go easy.

And, um, y- what, what's interesting is, like, number one, basically they're saying, they're saying again, and this time Jamieson Greer's saying it, and he said it before and so has President Trump, and all of them, all the, the senior cabin and the president, they're saying that we can do whatever we want, uh, and you can't retaliate.

So they're talking about our, our provincial level bans on US spirits, you know, wine, beer, but [laughs] we only have those in response to their tariffs.

So they're basically telling us, "Regardless of what we do to you o- on tariffs, you can't retaliate." Um, they're telling us despite that they, the fact that they have massive subsidies in their agriculture, I mean, truly immense subsidies, I think the second in the world after the EU, and also large subsidies for aircraft makers and for, for a range of industries.

Do we have room to give in to some degree?

What is Ottawa actually trying to achieve here? Is this about securing meaningful tariff relief? Is it preventing a new round of tariffs, or are we simply buying time?

You know, actually, I hope we're buying time.

I think we are.

Um, y- we've got, we've got the sectoral tariffs on autos, as we know, on steel, on aluminum, on wood products.

And now we've got these other ones, uh, being threatened.

Uh, they're gonna take effect in a couple of week if the President, uh, of the United States carries through with that threat.

And so I think, you know, the Carney government, like, they're, they're trying to pick us off one by one.

Do you see in the next, what, week and a half here, that they can get something done that will appease Canadians and yet hold serve?

If I could just return to you, uh, to, to, to your point that you think we won't have a return to free trade as we know it, uh, why is that? That, that's pretty stark.

Well, we can't only think of this, or I think it's important for us all to remember how this started.

I think parts of the liberal establishment, I don't mean Liberal Party, but the liberal establishment, uh, liberal neoconservative establishment, whatever term we wanna use, um, I think a lot of them think that the problems started with Trump and Trumpism.

The problems that we're seeing today with trade and with protectionism and with a more aggressive posture of the United States, they have their roots in the 1980s, 1990s, and 2000s when both the US government and the captains of industry decided that they were gonna deindustrialize their own country for profit.

They didn't see it that way, that they're gonna deindustrialize for profit, but they moved their factories offshore.

They traded factories with China and the rest of the world instead of products.

So it's not really a story of China coming and taking American and British and other factories.

Like, do you expect a deal or, or anything of the c- uh, of that kind before this year's midterms, or do you see the US dragging out talks in hopes of maybe tiring out Mexico and Canada and, and, and maybe getting an agreement that's more tilted in, in the Americans' favor?

What does that signify, do you think?

I think it signifies a couple of things, Aaron.

One, um, you know, we're, we're, we're obviously a big, rich country.

We have, uh, we have much more, uh, much larger endowments of natural resources and energy than Mexico does.

But Mexico's a bigger country.

There are 130 million people.

Um, and the two countries are more dependent on each other than, you know, than the US establishment, the US liberal establishment, uh, the neocons, Hollywood movies would suggest.

So if, if that's the case, uh, it, it almost makes me wonder, Julian, whether the US could simply go ahead, cut its own deal with Mexico aside, you know, outside of the, the CUSMA agreement, uh, and just do business that way if they wanted to.

So how can Canada and Mexico make this work?

Well, it's, uh, [chuckles] I mean, it's, it's difficult, uh, especially, uh, you know, given the way you described it, but, I mean, that's what it is.

It's, it's mercurial.

It's difficult.

It's, uh, even, even when the Trump White House w- even when he gets his way, he changes his mind, and it seems like there's no agreement that's going to last.

And so it's just a constant state of uncertainty.

And y- you wonder, is that, is that the modus operandi? Is it, is that what it is? It's just creating uncertainty.

... what advantage does Canada have?

In the context of trade, in the context of national security, where do you see Canada today and now, and what does the Prime Minister have to do over the next couple of years to perhaps see some of this aspiration come to fruition?

The aspiration in terms of – you mean the nation-building projects or you mean more generally? you know whether it's anywhere else in the world minds have shifted and then that the global narrative will in parts of the globe and many parts of shifted away from partially away from the green transition and more towards national security and oil markets and China and all these other issues and questions and so he's caught a lucky break in that sense and where he can focus and even increase substantially investments in our vast oil and natural gas wealth and pipelines.

So politically, he's got cover to do that.

He's got even wider cover from the public.

We've got a sluggish economy for the – Since 2015, we're made more sluggish by the after effects of the lockdown, and even more so now with the attack on our economic model that's coming from the White House, because so much of our trade is with the Americans.

And so now we have all of these converging, maybe crises is a big word, but we have all these converging crises plus an aging population.

And so that gives license to Prime Minister Carney to take action in a pretty urgent way to build out our wealth, including oil and gas, to build those pipelines, to fast track them, to get energy to the Asian giants and other parts of East and South Asia.

What are one or two things you would advise them on?

In the context of trade, in the context of national security, where do you see Canada today and now? And what does the Prime Minister have to do over the next couple of years to perhaps see some of this aspiration come to fruition?

The aspiration in terms of – you mean the nation-building projects or you mean more generally? you know whether it's anywhere else in the world minds have shifted and then that the global narrative will in parts of the globe and many parts of shifted away from partially away from the green transition and more towards national security and oil markets and China and all these other issues and questions And so he's caught a lucky break in that sense where he can focus and even increase substantially investments in our vast oil and natural gas wealth and pipelines.

So politically he's got cover to do that.

He's got even wider cover from the public.

We've got a sluggish economy for the – Since 2015, we're made more sluggish by the after effects of the lockdown, and even more so now with the attack on our economic model that's coming from the White House, because so much of our trade is with the Americans.

And so now we have all of these converging, maybe crises is a big word, but we have all these converging crises plus an aging population.

And so that gives license to Prime Minister Carney to take... action in a pretty urgent way to build out our wealth, including oil and gas, to build those pipelines, to fast track them, to get energy to the Asian giants and other parts of East and South Asia, and also to Europe.

If you were advising the prime minister right now, what are the one or two policy levers you would pull materially to improve Canada's energy security trade globally and make sure Canada does turn into an energy superpower? What are one or two things you would advise him on?

Yes.

You mean more generally? Well, I think that, you know, Prime Minister Carney, you know, despite his previous credentials, you know, with his book, Values, and, you know, being the climate finance ambassador for the United Nations, he has caught a lucky break in a sense with President Trump's return to the White House and intensifying geopolitical conflict, uh, whether it's Russia, Ukraine, or whether it's, uh, the war with Iran or, you know, whether it's anywhere else in the world.

Minds have shifted, um, and then, and the global narrative, y- well, in parts of the globe, in many parts of the globe, has shifted away from, partially away from the green transition and more towards, uh, national security and, uh, oil markets and China and all these other issues and questions.

And so he's caught a lucky break in that sense where he can, um, focus and even increase substantially investments in our vast oil and natural gas wealth and pipelines.

So politically he's got cover, uh, to do that.

Um, he's got pub- you know, even wider cover from the public.

We've got a sluggish economy for the, you know...

Mm-hmm

Um, your sense of where we are right now in this conversation.

Well, I think, uh, you'd mentioned in your intro that it could be a negotiating tactic, could be a shift away from free trade.

Um, I don't wanna cop out and say it's both, but in this case, you know, uh, often people say, "Well, it's both," or, "It's everything." But in this case, I will say that because I think there's, uh, I think there's a definite, uh, trend, um, to, you know, away from free trade in the United States since the aftermath of 9/11.

It's accelerated recently, particularly under Trump's second administration.

And I, I...

It seems that successive administrations and those who rule in Washington, those who run the country, feel that they can't compete anymore in a free trade world.

Um, and, and so they, they feel they can only, um, compete with tariffs.

Can, realistically, can Canada offset US, US, the US market through new partners or part of the market through new, new partners?

Does this, does this vote have any weight?

Well, it doesn't...

I mean, it, it, it's gonna go to the Senate now, and it may even be passed by the Senate.

It probably will, 'cause the last year, in 2025, the Senate passed, uh, at least two or three resolutions to, to p- peel back these tariffs on Canada, and, you know, they, they, they didn't go beyond the Senate.

So this, this one originated in the House.

Uh, it's passed.

Um, but if it gets past the Senate, Trump will very likely veto it.

Brian Mulroney

Does this, does this vote have any weight?

Well, it doesn't...

I mean, it, it, it's gonna go to the Senate now, and it may even be passed by the Senate.

It probably will, 'cause the last year, in 2025, the Senate passed, uh, at least two or three resolutions to, to peel back these tariffs on Canada, and they, they, they didn't go beyond the Senate.

So this, this one originated in the House.

Uh, it's passed.

Um, but if it gets past the Senate, Trump will very likely veto it.

Brian Mulroney

What do you make of the way Mark Carney has approached, uh, Washington, and in particular, Donald Trump?

I think it's, uh...

I think it's the, the best way.

I think it's the optimal way.

We saw, um, more, uh, more than a year ago, before, uh, Donald Trump went into the White House for his second term.

Uh, we saw before Christmas, uh, after the election sometime, the Prime Min- then Prime Minister Justin Trudeau went down to Mar-a-Lago, and he showed, um, unfortunately, a great amount of weakness, you know, when, when, uh, when President or President-elect Trump was talking about putting tariffs on us, and he said, "Please don't do that.

You'll destroy our economy." I think that kind of thing encourages, and I think we all know now, that encourages Trump, whereas Carney, uh, Carney bites back.

... pull the lens back, what's the one thing that you're like, "Boy, that is a weakness"?

From your perspective, when it comes to just how do we fight back, is this just cooler heads prevail or is this something that you hope the Canadian government responds to with maybe a little bit of force?

Well, yeah, I mean, I do hope that we respond.

We don't have to retaliate right away.

We can wait until things settle.

If Bombardier aircraft and other Canadian aircraft were decertified in the United States, that would be devastating for our aerospace and airplane sector.

And it would be tens of thousands of direct jobs and more indirectly.

So I think we sit down at the table with the Trump White House and see if we can get to the heart of this problem.

... you pull the lens back, what's the one thing that you're like, "Boy, that is a weakness"?