What can you tell us from an economic perspective about what no deal and the uncertainty that has created, what kind of impact that's had?

Well, I wouldn't say it's, you know, the situation we're living in and have been living in for the last year is great.

I mean, you know, you look at the economy, it's been essentially flat.

Statistics Canada essentially told us we had two quarters of declining growth in the fourth quarter of last year and the first quarter of this year it does seem like things are picking up a little bit as we head into the fall so better numbers recently but it's not a good situation and i think the point that you make is exactly right most businesses they just want to know with certainty what is the tariff and then we'll make decisions around investment and hiring and you know supply chains Right now, this is havoc.

They don't know whether they'll have access to the US consumer or not.

And this is just essentially the real impact and the implication that we've seen is business investment and hiring has been on hold until we get some sort of certainty around this for a lot of businesses in Canada.

So I'd say that's the challenge.

Yeah,

Do you think we need to do, I guess, maybe take a page out of the US playbook to become a little bit more competitive?

Well, I definitely think we need to keep an eye on what are the policies in the US.

And when we hear from our federal government, we often hear about the marginal effective tax rate.

I hate to throw jargon out there, but for corporations.

And what that says is at the margin, we have fairly competitive tax rates.

But if you include subsidies and other programs, when you look at the total tax take by government in canada versus the us we're at much higher tax rates or overall take here in this country so there's a challenge there on corporate tax competitiveness for sure and we need to keep an eye on that but i personally i think that there's bigger challenges and one of them is this trade uncertainty so when we're talking about manufacturing You know, within that North American market, we talk about the auto sector in Ontario.

You know, if we don't have the U.S. access to the U.S. market for manufacturing, especially for auto manufacturing, then we're not going to see the investments happen here.

But what do you think is going to happen with Kuzma? Do you think we're going to get a deal? And if so, is it going to be a deal that's good for our country?

Do you think we need to do, I guess, maybe take a page out of the US playbook to become a little bit more competitive?

Well, I definitely think we need to keep an eye on what are the policies in the US.

And when we hear from our federal government, we often hear about the marginal effective tax rate.

I hate to throw jargon out there, but for corporations.

And what that says is at the margin, we have fairly competitive tax rates.

But if you include subsidies and other programs, when you look at the total tax take by government in Canada versus the US, we're at much higher tax rates or overall take here in this country.

So there's a challenge there on corporate tax competitiveness for sure and we need to keep an eye on that.

But what do you think is going to happen with Kuzma? Do you think we're going to get a deal? And if so, is it going to be a deal that's good for our country?

Why should investors, I guess, care about productivity? And what would you say, or I guess, what's one thing you would like government to do or businesses to do over the next few years to address this issue of weak productivity?

Yeah, well, personally, I'd like to go back to what is productivity? What is GDP? In fact, if we go back to what is GDP, GDP is essentially just income that is generated through economic activity.

And there's two recipients of that income.

One is the workers.

So as we do work and as we produce things in terms of our labor, we receive labor income or wages, and that's one component of GDP.

The other component is for owners of capital, those that own machinery and equipment or productive capital, they earn profits.

So that's what GDP is.

Do you think we need to take a page out of the US playbook to become a little bit more competitive?

So have you found the economy to be resilient in the face of what's going on?

Well, that's a good question.

You know, when we say resilient, I really look at the state of the economy since the end of 2024.

And what we're essentially seeing is a flat economy, both in terms of our economic activity.

our labor and employment performance.

We just heard from Statistics Canada that we had suffered a technical recession.

Essentially, the economy was declining slightly in the last two quarters, the fourth quarter of last year and the first quarter of 2026.

BUT GENERALLY BETTER PERFORMANCE THERE.

So for AI, it's often described as a general purpose technology, but where do you think they'll see measurable productivity gains today and in the future?

You know, Ben, I'm going to give a little bit, perhaps a too long a story around this, but up until very recently, I was saying, you know, there was a lot of focus on manufacturing and, you know, manufacturing is a very productive sector in Canada, but it's not been growing.

I mean, we're not growing labor intensive manufacturing, but a lot of the focus from provincial federal governments had been there.

And I kept saying, oh, you know, well, why don't we look at professional services, commercial services, professional, scientific, technical services? This is where the private sector has done amazingly well.

And in fact, the pace of employment growth since 2015 through the pandemic and right up until 2024, we've seen four times the pace of growth in the private sector.

professional, essentially commercial services in engineering, accounting, scientific and other technical services.

The growth had been four to one in that area.

So with that, the USMCA up for negotiation, how do you see that playing out? And more specifically for Canada, where do you think we should basically play ball with them? And where do you think we should actually try to be more competitive and compete?

When you think about what measures the central bank can take, what are the levers that you think are available? And what are the kinds of signals that businesses are looking for in terms of monetary policy?

Canada does have a better financial situation, federal, provincial financial situation than many other OECD countries and certainly in comparison to the US.

And that does provide an advantage because the cost of borrowing with respect to financial markets or bond markets, we have an interest rate like a five-year bond yield.

That means five-year rates, borrowing for businesses and consumers that are not quite, but roughly a percentage point below the U.S. That is one of the advantages, one of the few advantages that we have because we're not really competitive on the tax scene, on the subsidy side and others.

At least there, we have a bit of an advantage.

The problem, however, for a central bank generally is that it can set short-term rates, but it doesn't have very much influence on the longer-term rates, the yield curve, and the fact of bond markets that determine 3-, 5-, and 10-year borrowing rates.

and what's been happening over the last two years ever since we kind of peaked out on interest rates we've started to lower its interest rates bond yields have barely moved in fact more recently they've started to move back up there's two challenges there one is the challenge of sovereign debt the world over.

What do you see as the dynamics that are shaping that human side? And what do you think are the biggest risks?

Pedro, do we, we as Canadians, have any leverage against the United States and Donald Trump in the CUSMA review that's happening this summer?

Well, I, I, I do think we, we have leverage.

Uh, we have a lot of resources, especially, that the US absolutely needs, and I think I've been saying this from the start.

There's just doesn't make sense at all for the US to tariff resources, things like uranium, oil, natural gas and, and many of the minerals and, and inputs that the US absolutely needs to keep their production efficient.

Uh, so they have put tariffs on specific products.

I'm, in fact, surprised that the tariffs on aluminum are still there because aluminum, I mean, the US just doesn't have the capacity to, uh, produce aluminum, the aluminum that it needs.

So, uh, yes, I, I do think we have some, some leverage here.

Will that allow somebody who has been priced out to be able to, to get into the market, do you think?