What does that say?

Yeah, and that's the thing, right, is that it doesn't have to be on the headline industries that have the tariffs on them.

They can radiate out into sectors you would think have almost nothing to do with tariffs.

And so it's true, a lot of those losses came in educational services in my area, for example.

or in health care and sectors that are far away from where the tariffs are.

But just as a bad analogy, you know, if you hit the steel and aluminum industry and all of a sudden there's less people in that industry, they might stop going into the local Starbucks or Tim Hortons to pick up a coffee on the way to their shift.

And now you have baristas that are losing their jobs, even though that has nothing to do with the headline sectors that we keep seeing in the news.

Is there any hope out there? If you're a Mark Carney or you're in the cabinet, what are you focusing on to talk to people about?

What are your thoughts in general on this?

Yeah, so this is an income tax, not a wealth tax.

Wealth is the accumulated money that you have in your bank account, and income tax is what you're earning paycheck to paycheck.

If you start increasing the tax on people's earnings, they- it's going to discourage people from earning.

And anybody who's earning over a million dollars is probably in a profession where their skills are highly valuable.

And yeah, they're probably mobile, and they're gonna up sticks and go somewhere where their income is gonna be protected.

That's, that's pretty basic.

I understand that, but how are other countries doing it, and d- do we wanna learn from them or not learn from them?

But I don't know if Carney bringing it up kind of pushes it further.

Yeah, I don't know that it's really going to happen at least anytime soon.

But the objective here is that the U.S. dollar is the backbone of international finance.

Everything runs through the New York Stock Exchange, NASDAQ.

The U.S. dollar is used for clearing balances between countries.

The government bond market is one of the deepest, most liquid out there.

And almost every interest rate in the world is set according to them.

Does this tell you that he, while questioned by the Democrats, might be at least be willing to do the job that needs to be done?

I'm not going to say hands are tied, but it's pretty limited in terms of what you can do with all this external stuff causing so much chaos.

Yeah, you're absolutely right.

And the Bank of Canada understands that a lot of these are circumstances even beyond their control.

Most of the last 50 years since the 1970s oil shocks, what's hit the Canadian economy are demand shocks.

It's where consumers get a little overly excited with their spending or businesses get a little too optimistic about their investment opportunities.

And so when the economy starts to overheat as a result, it also brings inflation with it.

One simple increase of interest rates ruins both of those at the stroke of a swing, right? People would stop spending almost instantaneously when interest rates go up and the inflationary pressure goes away because of those higher interest rates.

that's the thing that we have to focus on first and and so much focus on affordability that's got to be sort of the overarching thing and like you say why punish people who are trying to get by and and make things less affordable because that's all we're hearing right now is affordability is the crisis of the day

So, uh, when we talk about a country being a member of the European Union, what does that actually mean?

Well, there's three components really to being part of the EU.

One is that you have to have a, a democracy.

Now, there are, are actually some EU countries that don't look to be particularly democratic.

But at the time that they joined, they were showing, you know, respect for the rule of law, human rights, uh, protection of minority, stuff like that.

Uh, the economic component is you have to be a market economy.

So you can't be state-run.

So, uh, uh, Prime Minister Carney being a little bit co- coy or, or, uh, soft-pedaling, uh, th- this idea of having an alliance with the EU, it has more to do with the Eu- you know, not wanting the euro and to be dictated laws, or more to do with, um, how it would, uh, rankle the United States, Donald Trump?

So, uh, when we talk about a country being a member of the European Union, what does that actually mean?

Well, there's three components really to being part of the EU.

One is that you have to have a, a democracy.

Now, there are, are actually some EU countries that don't look to be particularly democratic, but at the time that they joined, they were showing, you know, respect to the rule of law, human rights, uh, protection of minority, stuff like that.

Uh, the economic component is you have to be a market economy, so you can't be state-run.

You can't have, uh, the, the idea of the exact opposite of what capitalism would stand for.

And again, there are currently members that are tending to drift that way, but maybe not at the time that they were joining.

So, uh, uh, Prime Minister Carney being a little bit co- coy or, or, uh, soft-pedaling, uh, th- this idea of having an alliance with the EU, it has more to do with the eu- you know, not wanting the euro and to be dictated laws or more to do with, um, how it would, uh, rankle the United States, Donald Trump?

What are your thoughts on that?

Yeah, it could set back the Canadian economy, whether that's through inflation, reduction in GDP, job losses.

There is damage that's going to be done.

So this isn't a binary that it lands on us or it lands on them.

It's what's the proportion.

And we want the overwhelming burden to be on them, not us.

But some of it does land on us.

Thanks for your phone

And you think on the other side of this, that's still going to be true.

Yeah, I know that we constantly use the word resilience to describe the Canadian economy, and I think it is apt, but I think what it's also important to pay attention to is where would we have been now, 18 months into this administration, had there not been tariffs or trade disruptions or these ridiculous spats that seem to be instigated by somebody who doesn't recognize the benefits of trade, right? I can't say that our cost of living and affordability issues would be non-existent, but I don't think we'd be having as many issues as we have now.

It would be marginally better.

And, you know, I guess you could make the argument, too, that in the absence of tariffs, we might have an entirely different party in charge as well.

So, you know, it's hard to maybe compare that counterfactual.

But look, the economy seems to be able to withstand it.

And I think there's probably an element now, too, of let's just get through the next 800 days or certainly at least the next nine weeks and see what the lay of the land is.

Can you explain to people who might not understand why that is so important to America?

Is there something Canada could be doing differently to have that development, that innovation happen here?

Well, the brain drain has been something we've talked about for decades.

This goes back even to my time when I was in university as an undergrad years ago, where the brain drain was a real issue.

I think, of course, what has to happen is universities in Canada are still constrained to some extent by their unwillingness to approach the American model of charging tuition of $70,000 a year, right? So even in Ontario, where people bent out of shape that they have to pay $10,000 a year, The vast majority of the university's budget is faculty and facilities, and whether that's in the US or in Canada, how do you come up with the money to pay for all of those promises? In the US, the model is you charge outrageous tuition.

In Canada, the solution has been you charge very minimal tuition unless they're foreigners, but we seem to have turned against foreigners in the last 18 months.

I think what's going to ultimately constrain the ability for these businesses to see a spinoff opportunity is they need to know that they're going to be able to generate a lot of funding from within the university and then create that culture that exists on the side.

If you think of MIT and how many businesses have spun out of there, I don't know that...

Is this good news for people who don't want the Dodgers to win anymore?

What sorts of supply chains are obvious to you out of Winnipeg or out of Manitoba that's at risk here if this trade war doesn't end anytime soon?

look there's a long history that ties winnipeg to chicago right and so chicago is the center of a lot of agricultural trade it's a lot of uh goods that were moved by rail through there whether trying to connect from the northeast to the northeast and going up into the midwest and so you know winnipeg at least to a large extent has been built on that direct tie going through minneapolis and down through milwaukee into chicago so if you're disrupting that supply chain by making that border between canada and the us a lot more solid then it effectively cuts off Winnipeg.

And as you know, and as Manitobans know, right, you become really reliant at that point then on the rail line that connects to the West and the Trans-Canada.

And so one of the things that we've been trying to do in Canada, right, is build up that East-West infrastructure because Winnipeg is really the one that's maybe more at risk because it's the furthest from either of the oceans or any of the oceans i guess there's three of them uh and i heard in the lead-in you know the talk about trying to develop the port in churchill uh you know there are environmental risks that come with it and there's some potential dangers of course uh that come with just weather trying to link it up but that's going to become a real important issue then uh because if the great lakes are going to be split between canada and the us the way they currently are but with maybe a little harder border That means then that that southern part of Manitoba really starts to feel isolated without access or easy access to the rest of Canada.

Can Canadians actually make up the difference if the U.S. market isn't profitable anymore? Yeah.

no chance there's just no chance now that's not to say that those interprovincial barriers shouldn't be removed they should absolutely be removed and i would be arguing for the same thing even in the absence of a trump presidency uh the problem is that we export and import about two billion dollars a day roughly equally split between exports and imports uh with the us alone uh there's just no way that you can make up for that by the removal of interprovincial barriers that would at best affect canada's overall economy uh by less than that amount just with the us so there's not enough to be gained there but it's still worth pursuing because it ties canada uh in a much stronger way and makes it a much more unified economy right now it seems that almost what he's doing is trying to sow seeds of descent between the provinces it probably explains to some extent why he went after the french language in Friday's breakdown of discussions.

He's really never raised it before, but he knows that a new government is coming in Quebec.

They've talked about the idea of a separation referendum after Trump's term in power.

Could we just sort of say, yeah, your oil is going to cost you X plus 20% as a tax so that they have to pay for it? May mean that they buy less, but we're not paying for it.

Yeah, it's even worse.

So unfortunately, when you're a small open economy, you don't really control the price of global commodities.

It's determined by supply and demand for which we're such a small player.

So if we were to decide to put a tax on a product, the bad analogy that I'll give you is imagine that President's Choice Cola decided that they're going to put a tax or the government's going to put a tax on President's Choice Cola.

That price is not going up because consumers are going to say, you even increased that product by five cents and I'm going to go buy something else.

So who's going to eat the tax? It's president's choice.

Are there other ways that we could hurt them in a way they would get their attention and provide some leverage that aren't tariffs or maybe export taxes?

So how does this differ from betting on a game?

It's not really that different, but if we're going to try and turn it into some sort of comparison, what's really the difference between betting on a game and betting on Apple? It is kind of the same thing, right? That what you're doing is you're looking at real-time information on Apple and their sales of iPhones or what new products they have in the pipeline or who's even running the company or if they're being investigated by the Justice Department.

and the share price will go up and down.

So in a sense, you are betting on that.

This would be the same sort of idea.

The betting on a game is purely a yes or no.

You bet for the team to win or you bet for the team to lose, and that's the end of it.

What do you think regulators should be looking at before letting this go into the market?

Yeah, and, and it almost sort of shows that that far-right section of the federal Conservatives, it looks like they're kind of on an island.

They are, and you know, it kind of reminds me of, uh, 30 years ago when Tony Blair came to power in the UK, um, the problem was at the other end of the political spectrum.

So the Labour Party had traditionally flirted with kind of the extreme ends of, like, socialist thinking and whatnot, and it was Tony Blair that came along and said, "Look, if we're ever gonna win an election in this country again, this party needs to move to the center and basically dress themselves up as conservatives, uh, in Labour clothing." I, I think that the problem that the Conservative Party has right now in Canada is that they're never gonna win an election if they're catering to that 43% that says the prime minister did a bad job here.

You're not gonna win on that because there's not enough Canadians that are gonna find cause with that.

But if you try and move towards the center and dress yourself up as liberals and behave a little bit more moderately and centrist, I bet you there's an election to be won there, and unfortunately, Pierre Poilievre cannot seem to get it through his head.

He needs to stop pointing out every single flaw of the Liberals and almost steal some of their ideas for himself, and part of the way in doing that is getting behind the prime minister here.

Even on the weekend when he released his support, it was still rehashing those same tired arguments that we've heard over and over and over again, cost of living, affordability, 10 years of no growth.

position.How much damage is someone like Jamil Jivani doing to the conservatives right now?

How do you think that's going to affect those businesses?

Well, it's not going to help them, that's for sure.

Let's keep in mind that the amount of goods that are affected is probably around $20 billion.

For perspective, there's $1 billion that goes each way between Canada and the US every day.

So we're talking about a little less than three weeks worth of economic activity that's going to be affected here.

But those businesses that are going to be affected are going to have to figure out who's going to pay that tariff? And the two options are the Canadian business or the American consumer.

And what we've been seeing in a lot of cases is that the absorption is mostly falling on the consumer.

But Moshe Lander, who is a senior lecturer in economics at Concordia University, where are we at with interprovincial trade these days?

Well, last I recall, it was supposed to be all barriers were removed by July 1st, 2025.

So I think the deadline has been missed.

And your caller is right that Canada has done a very poor job removing those interprovincial barriers.

There's a lot of data that suggests that it's easier, well, at least pre-Trump, it was easier for provinces to trade with the neighboring states.

Thank you very much.

is once you become friends with the coolest kid at school, you stop trying to make new friends.

Let's go back to Moshe Lander one last time and just reflect on anything that you'd like to based on what we've heard over the last over an hour now.

If that's true, what do you think is the cause? Is that just the economic environment? Is that the trade war with the United States, and so people want to sort of bolster their capabilities in Canada? Is it something that government has done?

It's a little bit of all of them.

So for sure, as we have a trade disruption with the US, Canadian businesses that might have been looking to expand into the US now have to expand at home.

So that's not necessarily an endorsement for Canada.

It's maybe an argument against the US, or at least it's an argument against the U.S. for now, right? So when all of this resolves itself, let's see if this continues.

The government has been a huge supporter of trying to build up Canada's infrastructure as a way to try and pivot from the U.S. And so that's also creating a climate then where businesses are looking at the opportunities.

You're saying, all right, if we are involved in a project that could be supported by the government, we don't necessarily need government subsidies.

Treasury is doing about it.

So what is, um, like, you know, determines then their supply or their demand? Are there other factors like, for example, how economies are doing or that kind of thing that factor into that?

Absolutely.

And so again, much like Taylor Swift or ice caps, there's gonna be a whole bunch of underlying factors.

So for the people that are supplying, those are the ones with Canadian dollars that are willing to accept American in return, anything that makes Canada look relatively more attractive to the US would decrease the supply of Canadian dollars.

And by anything, I mean anything.

It could be something politically.

So for example, when we get news that, uh, Trump tacoed and we've got a little bit more time to figure out trade with the US, then Canada looks relatively stronger today, and so there's going to be a decrease in the availability of Canadian dollars, and that's gonna push up the value of the Canadian dollar, and that's exactly what we saw today.

On a more macro level, how does the exchange rate impact, um, trade, for example, or the economy? Like, what other, uh, data points are there that reflect the exchange rate?

What do you make of the inflation numbers earlier today?

Yeah, it's a good point that you raise.

And so I don't have any problems whatsoever with the inflation numbers.

The Bank of Canada likes to keep inflation between 1% and 3%.

It's 3%.

It's within their target range, even though it's right at the uncomfortable edge of it.

But even there, a lot of that is beyond Canada's control.

What should they be focused on on that front?

This is not all just Jack Daniels, a giant megacorps that are paying the price.

Yeah.

And let's think carefully, too, about which parts of the country are the ones that are bearing that cost.

I think right now what Canadians are upset with is the Trump administration and not Americans in general.

And if we are upset with Americans, maybe it's the 100 million Americans that voted for Trump.

Right.

But, you know, I don't think that Canada has truck, let's say, with Democrats or the ones that are trying to hold Trump to account.

And it doesn't actually get the leverage on paper with a president who has a tendency to throw out the paper anyway.

There's no point you extending this because we're just going to live without you.

yeah that that's possible too i saw that the fact that this expires next summer or whenever the money runs out uh it doesn't really look like they're hunkering down for a big battle here um and again because the industry is um substantially larger uh almost 100 times larger than the amount of money that's being offered this is not going to last long and you already said that you know the steel that we're producing uh is not necessarily the steel that we need And I'm not entirely sure that, you know, getting it from point A to point B is really the problem.

Or at least if it's the problem, it's not money that needs to go to the steel industry.

It's money that needs to go into Canadian infrastructure to make it easier to move not just steel, but a lot of other stuff that might be having east-west problems because we built up that north-south infrastructure.

So it's a weird landing point then for this money.

I know that he announced it today in Hamilton.

So, okay, yeah.

And maybe the investment from government should be in ways to provide incentives to build the things here that we need.

But can you take a deep dive on whether or not that is true and if it is, what it means?

So I think there's two different ways that we're interpreting investment here.

The way that economists would talk about investment is, are we seeing new buildings, new factories, equipment being replaced and updated? And the data just flat out says that's not happening.

businesses are extremely scared of making capital investments because of the uncertain climate in which we're operating right now.

So, you know, if that's the way he's viewing the story, then he's flat out wrong.

If he's talking about that our stock market is doing well and going up, that's financial investment, then yes.

And that's because not just Mark Carney is the prime minister, as he seemed to want to say, but it's because the Bank of Canada has done an extremely successful job about getting inflation back under control.

Are we over representing that and what that means?

I mean, basically a boycott, right?

Right, and they all pushed back, but with different reasons.

So UEFA, that was the European Soccer Federation, said...

We fundamentally disagree with this idea on all grounds.

You didn't tell us in advance.

You didn't give us time to think about it.

You didn't ask for our opinion.

And so I guess is it biting the hand that feeds them?

Uh, but do you know what they're actually proposing?

Yeah.

So e- essentially what they wanna do is they wanna create a commercial arm of FIFA, and the commercial arm would be responsible for all of the non on the field, uh, items related to running FIFA's events.

Now, that's not just the, the World Cup that we watched last month.

It's the Women's World Cup, which is coming up next year.

There's all of the under 20 and under 18 tournaments as well, uh, and the Club World Cup that happened last year.

So all of that stuff would be turned into essentially a commercial property, and that would be funded, at least in part, by minority shareholders, uh, being led in part by, uh, Jared Kushner's brother.

Uh, is, is this attempting to be something like that? Who gets the money, the capital that's raised?

However you want to characterize it, this is absolutely paramount of importance for Canada-U.S. trade, right? Yeah.

Yeah, absolutely.

There's about a billion dollars worth a day of goods that cross from Windsor into Detroit.

So that's a gigantic portion of Canada's international trade.

And of course, Windsor, which is on the side of the border, effectively grew as almost a suburb of Detroit because of the auto industry and the ability to integrate those two economies.

And part of the reason that we have a free trade agreement now with the U.S., grew out of the connection from the auto pact in the 1960s.

So, you know, all the way up the 401, which is the major highway that runs all the way up to the Quebec border, you know, the expansion of industry there was tied to the Ambassador Bridge, the existing bridge that's privately owned.

What do you make of the way that the whole deal has been structured and has changed seemingly over the last month or so?

However you wanna characterize it, this is absolutely paramount of importance for Canada-US trade, right?

Yeah, absolutely.

Uh, there's about a billion dollars' worth a day of goods that cross from Windsor into Detroit.

Uh, so that's a, a gigantic portion of Canada's international trade.

And of course, uh, Windsor, which is on this side of the border, uh, effectively grew as almost a suburb of Detroit because of the auto industry and the ability to integrate those, uh, two economies.

A- and part of the reason that we have a free trade agreement now with the US grew out of the connection, uh, from the Auto Pact in the 1960s.

So, uh, you know, all the way up the 401, which is the major highway that runs all the way up to the Quebec border, uh, you know, the, the expansion of industry there was tied to the Ambassador Bridge, the, the, the existing bridge that's privately owned.

That's right.