At Issue - Carney fends off recession accusations

Episode Date: June 5, 2026

Mark Carney fends off accusations of driving Canada into a recession. What ordering the CRTC to back down over its 'Netflix tax' means for U.S. trade negotiations. And are some Liberal MPs chafing under Mark Carney's leadership style.Rosemary Barton hosts Chantal Hébert, Andrew Coyne and Althia Raj.

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He can't even bring himself to utter the word recession, even though the tech spec definition tells us that he's the only prime minister, the only leader in the G20, who's created one. So will he stand in the house and answer the question, are we in a recession or a technical recession? Mr. Speaker, we are in an economy that is fundamentally being transformed by a government. This week we're asking, what does a technical recession mean for Canada? Plus, is Canada making more concessions to the U.S. over those CRTC streaming fees?

So what's to be made of the state of the economy? And is this the start of a bigger slowdown? I'm Rosmoy Barton, here to break it all down tonight. Chantelle Baer, Andrew Coyne, Althea Rosh. We pulled, I pulled the panel before we began, and Andrew Troll pulled the straw to start first. I mean, there's a couple issues around sort of the state of the economy, the conversation around what's happening to the Canadian economy.

and then sort of the political consequences of that, and as Pierre Pueauliev tries to make it a point of vulnerability for the Prime Minister. But maybe we'll start on the state of the economy, Andrew, and what you make of the way the conservatives are framing it. Well, this is a regular and extremely silly ritual in Canadian politics. We do it never, whatever party is in power, whether it's the liberals in power and the conservative is in opposition or the conservatives in the opposition.

And that's the race to be the first to say they are, word to invoke the dire threat of a recession. Why is it silly? Well, in the first place, we don't all turn into pumpkins if we slip from 0.1% on the plus side to 0.1% on the negative side. The severity, if you get into a really severe recession, that's one thing. But simply talking about because we happen to produce a couple of quarters of negative growth imperceptibly in the case of the first quarter of 2026 is awfully silly.

It's also silly because governments really don't have a lot of control over the economy in the short run. They like to pretend they do, and oppositions like to pretend they do, because the government wants to claim credit in good times, and the opposition wants to blame them in bad times. What really matters and what governments should be held to account for is long-run growth. You know, it's not that we slip into negative growth for a couple of quarters, it's that quarter after quarter, year after year, the economy of Canada turns in these glacially slow, growth records where we're growing at maybe 1.5%, 1.7% per year, when we used to grow at 4% or

5% growth per year after inflation in the 50s and 60s. So that's what we really have to focus on. You can blame both governments of liberal and conservative over the last few decades for this problem. Maybe some have caused more damage than others. I think you could say that the Justin Trudeau government probably did more damage to the economy than the Stephen Harper government, but neither than did much to improve it. And the Carney government certainly doesn't seem to be doing much in the way of new ideas to really get that growth rate, that long-run growth rate going up at a better clip. And that should really be the focus. What did you make of the way the Prime Minister responded to this, Chantelle, given that obviously the economy is, it's kind of his thing, for lack of a better word.

So he does have to show that the economy is performing. Yes, but he is also the Prime Minister and the politician and not the economist and chief of Canada, because if he were, he would have said everything that Andrew said, then it would have been right on everything that Andrew said. So what Pierre-Qaulayev wanted was for the prime minister to melt the word recession. It's kind of a game rather than something that addresses the substance, and that didn't happen. And Andrew is totally right on growth. but we are still, apparently by independent analysis, growing more than most of our partners,

which tells you something about the state of the world. Now, why I politically wouldn't have gone where Per Puelev is gone, is because the difference is so minute that what is he going to say if a month from now we're not in a technical recession? Is he going to say, oh, the recession is over, it's great? So I would have kept my powder dry. Why? Because I think it's totally possible that things will get worse.

But I also think most Canadians do not believe they are going to get worse because of current Karni policies, but because of what's ongoing with the U.S. But still, if you're going to do that, why not keep it to the fall and see what happens then? Because what do you say if there's a correction on those numbers? Yeah, I mean, it does feel like the conservatives are sort of trying to get traction on any kind of issue, and maybe it's this one, or maybe they've started too soon. Althea, what did you make of how the prime minister explained the state of the economy in response to Pierpaulio? Well, the government's line is basically that the conservatives are talking down the Canadian economy, and I think that's probably a good political line because it harkens back to the arguments from last spring

in terms of Pierre Paulyos kind of negative slant to, like, I don't want to say, bashing Canada, but Canada's broken. I think that's what it's hearkening to. And obviously, Donald Trump and national unity. And so, like, it's a good political line. I do think that is right. I think the conservatives are struggling to find a narrative that sticks. I mean, the prime minister in the legey poll this week was at 50% nationally.

The Nannuous poll is a little less rosy, but it's still. like he's, they're still way ahead. And the conservatives, you know, Pierre Pahliav has his own problems. There are people who are starting to mount the possibility of perhaps trying to stick the knife in him. And then there's, like, he's following back to kind of like the best of, right? Which is the economy.

And in this case, I think both of my colleagues are right, the argument is weak because the fundamentals are not there to support him. It will be interesting to see if he switched gears. For example, the Promontory Budget Officer gave him more stuff, I think, to chew on, which is the potential size of the deficit, $70 billion, when you think that Justin Trudeau's last year was around like 36 or $39 billion, and I mean, that's quite an increase. Maybe that's a bit more chewy.

We'll see. Chantelle, and then a quick last word to you, Andrew. Except I don't think Canadians are into this. This is June. It's the end of the parliamentary session. It seems to sound mostly like noise for the leader of the opposition to keep his job. September, October, November, much more significant what has happened to Kuzma, what will happen in Alberta, the Quebec election.

But at this time, it feels like treading water and trying to get, you know, some kick out of treading that water. But sometimes it's good to put down a marker. Maybe I don't know if that's as simple as that, if that's what they're doing. But I'll give Andrew the water. Or sometimes you cry wolf. Yes, too many times. Yes, that's right. Andrew, last word to you.

Well, I want to pick up on a line, Chantel said that it could get worse and probably is going to get worse. If we get into a Kuzma situation where it's neither renewed nor abolish, but we just get into annual reviews of it for the next 10 years, that is deadly for certainty

that businesses need to invest. That could certainly harm the thing and so could obviously a succession referendum. Where the short term and the long-term connect is, we need to get measures that is making us such a competitive place to invest, such a low-cost, low-tax jurisdiction to invest in, that people will be willing to invest here even in the face of Donald Trump's tariffs. So the long-term should be the focus,

but that also has reverberations in the short term. Okay, we're going to leave this topic there. Thank you for that. When we come back, we'll take a look at the state of those U.S. trade talks and suggestions of more concessions to the next. So where do things stand after Minister Leblanc's trip to Washington? Are those changes now that the government is ordering the CRTC to do on streaming charges? A concession?

That's next. The Prime Minister has given concessions after concessions after concessions after concessions. This is a question first and foremost on affordability. This is not the time to raise costs for Canadians. We're balancing. It's the time to get a balance in around that. You know, the CRTC, obviously we disagree with the... We disagree with, we take issue with the impact of the decision.

When we land on the overall agreement revisions to Kuzma, we will take stock on steel quotas and other measures that we have taken. Okay, so here to break down where Canada stands in negotiations with the U.S., particularly perhaps on this issue of streaming, Chantal, Andrew and Althea are all back. Elthia, why don't you start us off on this one? It was quite the flip in a very short period of time on the streaming fees or changes. the Prime Minister trying to make it about affordability, but definitely something that the United States

and those big players were watching too. It's a concession. I don't think there's any other way to view it. This was the previous government strategy of adopting a law to basically level the playing field between Canadian broadcasters, typical broadcasters, like the CBC, and the streaming giants.

And if the typical broadcasters are having to spend, and 30 to 45% of the revenues on Canadian content. The thinking was we should force the streamers, which is where the eyeballs are now going, to pay into this fund as well. And they never wanted that. And when the CRTC imposed a 5% charge on their revenues, they've been fighting it in court.

And then the CRTC, that money's frozen. And now the CRTC is that we're going to charge them 15%. I think what's interesting about the government's decision on this is two front. They caved on the digital service tax last year, which was going to bring in $7 billion over five years. And it is absolutely not clear if the government got anything at all for that. So what are they trying to do? Is this a way of trying to get to the negotiating table?

Because that's what the Americans basically suggested. Is that the price of entry? And what will that mean for the other things? And I think it is interesting that it's, and I'm probably not always speak to this, but it has opened a very clear cleavage and given the block and argument, to go on with in terms of culture because we are not doing what we said we would be doing, which is protecting culture. Like now taxpayers are on the hook for that money, $600 million.

Yeah. Chantal. Okay, so the Biden administration didn't like this approach, and so no surprise, the Trump administration doesn't like it. But to try to cover it up with affordability, I've been trying in my mind to think of what are my real, needs when costs go up. I come up with food, obviously, lodging. I need a roof over my head. Energy if I need to get to work and pay for gas. You want me to go on because my suspicions to Netflix do not come very high. I'm not going to wake up at night thinking what if my price goes up

for Netflix Prime or whatever. So this is kind of a fig leaf excuse. I, I don't think it goes to the credibility of the government. Everybody understands that it's driven by what's happening in Washington. But it does point to a larger problem of the strength versus the weakness of the Carney government. The strength is Canadians want Mark Carney's government to stand up to Donald Trump and his administration. The weakness is whenever he makes a concession, it hurts Mark Carney politically in the country. You can't have both. And Althea is totally right.

This is a concession on which the jury is out as to whether this time it will make a difference because the previous ones made no difference. No, but they do seem to be, I mean, they were talking this week. There were their forced labor. I mean, that's already something, right? The forced labor tariffs that don't really impact Canada, but we were included in them. So there was a movement on a number of things this week, Andrew. and I don't know, maybe the government felt that this was the time to sort of back away from something.

Yeah, I mean, I'm not sure I regard it as a concession if you get rid of a bad policy that has no basis in substantial policy analysis but was just basically a soft to the cultural industries. There's no shortage of digital or production of content in Canada. And now they're at record highs. It is going to affect consumers, whether we think that's important or not. but to be slapping what amounts to attacks on consumers to prop up an outmoded broadcast policy seems to me the height of fall.

I mean, I'm all for leveling the playing field, but there was another way they could have leveled the playing field, which is to stop this business of forcing the broadcasters to subsidize, to cross-subsidized Canadian content. That might have been a good policy in the age when we only had three networks, when there was no way to charge people directly for programming, when you had an identifiable market failure.

We don't have that. You know, there's no market failure. There's nothing preventing Canadians from spending money in Canadian content if they want to. And there's no real basis in policy to force them to pay for it if they don't want to. You can force them to pay for it. You can't force them to watch it, which has been the fundamental dilemma of CanCon from the word go. So to be trying to voice this now on the streamers in the age of the Internet and limitless numbers of potential broadcasters and video content producers, it's just so backwards.

It also happens to really annoy the Americans at a time when we can ill afford to. So, yeah, you want to conserve your bargaining chips in negotiations, but sometimes you have to play them, and maybe this was a prudent time to play this chip, but I'm not going to weep because they got rid of this very bad policy.

Chantal and then I'll see it quickly, yes. The question is not whether one needs to weep. I don't have any Kleenex on my desk. The question is, if you're giving up concessions before you get to the negotiating table, You are basically stripping yourself of cards before you go play poker. Yeah, but sometimes you have to play table stakes to get to the table.

Sure. Sure, Althea. I think there's like two different issues. One, I think it begs, like, is the government going to completely review the way it supports the culture sector? Because also what does it mean for this court case? I don't know. And then there is the point that Chantal put her finger on, which I think we talked about last week, too, which is the kind of the hard place that Mark Carney is in because he needs to

bring people on side. And I agree telling people that this is about affordability. Like, suddenly I woke up after the CRTC was talking about this and I decided that I had to do this, hard to believe. And then the no results part. I do think the one thing that is important to stress, though, it feels like the government has decided to try to advance negotiations on a faster timeline. And there seems to be a renewed push to get something, hopefully something by Labor Day. The real solution is just to make many, many seasons of heated rivalry, and then everyone will be happy. Or north of 60. Okay, fine. We're going to take a short break here, but when we come back, we'll talk about Mark Carney's caucus management and how some MPs are responding to his leadership

style. That's it. I have never seen the Prime Minister act other than respectfully, and he is someone who is used to being in a boardroom, and I appreciate the back and forth with him. Have you seen him yell at some people in a meeting. I haven't seen it, no. No, you've not seen it. I have not, no. So you would characterize it as a disagreement and not the meeting. Well, I've certainly, like I say, it was basically what we had was a disagreement.

Exactly. Here to break down, Carney's caucus management style and how MPs are responding. Stal, Andrew, and Althea, of course, the reporting in the Toronto Star done by our friend here, Althea. Raj, so I want you to tell us sort of what you took away from your reporting, Althea, as sort of the central issue in caucus for the prime minister and why that matters? I think it's clear that there are divisions in caucus about the way the prime minister speaks to MPs or has spoken to MPs. The message from the prime minister over the last, I'd say two weeks,

is that the government has a plan, its focus on the Kizma talks, on national unity. If you have a criticism, he actually does not want to hear it. Please keep your comments to yourself. He does not want people to come to the microphone and complain. He wants people to come with solutions. Some people took that very negatively, as in he does not want to hear us speak. The incident really started about a little bit more than a month ago,

where there was a very tense moment between Jaime Batisse, Cape Breton, MP, who was talking about S2, which just changes to the Indian Act. and the Prime Minister did not appreciate that Mr. Batiste was coming to say that this was not being received as the government intended, as in like it's your problem to fix it. And several MPs, not the usual suspects, told me how disturbed they were by that exchange. And I think that that has kind of like opened the floodgates in some ways as MPs who want to tell, I say, I think it's a warning call to the Prime Minister to say, you know, we have value too, and we can be your line of first defense, and the criticisms or their concerns that we bring forward should be listened to. Right now, things are going great for the liberals. Right. But you kind of want to make sure that you're not, I think if you're

the leader, driving some wedges unnecessarily and telling people this week not to write to the prime minister in case their letters might, their letters might leak, I think rub some other people the wrong way. I mean, I have also heard, because I certainly heard some of the things you've talked about, I have also heard MPs say, I like that he's all business. You know, you sort of heard that from Anthony Housefather. I like that he keeps things on track and that he doesn't want to talk about other things and that he's, you know, gung-ho on the issue. So there are people, I guess, who appreciate the hard-nosed business mind of the PM. But Chantal, to Althea's point, you don't want to cause problems inside your own caucus if you can avoid it. Well, the first thing you should not do if you don't want to cause problems is tell MPs not to talk to journalists.

That usually induces the opposite reactions. But, I mean, I totally believe that there are MPs who feel the way that they told their fear. No problem. I wish that they would focus on a policy issue that drives them to say all these things, as opposed to hurt feelings. And the people who are named in the piece, obviously are not the ones who have been complaining. So you're complaining on behalf of someone else.

But what I do find striking goes back to this notion that you're at 50% in the polls and you've got MPs who are going around saying, it's not nice. What will happen when you're at 27% in the polls? I've watched Brian Mulroney at 20% and no one was going to journalists to say things like that, to Changshaelian in Quebec. So, yes, there is a message there about caucus management.

But I'm not surprised that this is happening because I have this quote, a public quote from the prime minister who says, I don't want to hear what people are against. We want to hear what they're for. I have translated it now into what they're for if it happens to match what we're for. That was at the Vancouver Board of Trade. where he said that publicly. What I'm for, really.

I've kept it because I believe it's a defining quote. And when I read Altheo's column, I thought, yeah. Bingo, yeah. Andrew, your thoughts on all this. Well, in one sense, this is nothing new. Prime ministers have been treating their caucus. Party leaders in general have been treating their caucuses like the dirt under their feet for the better part of 60 years with rare exceptions.

Brian Mulroney would be an exception. I would just throw that out there. With rare exceptions. Yes, yes. But even with Murrni, I mean, the amount of real power that MPs he had, even under Mulrudey, was very little. He just treated them better. So that's the news here is that even by the standards of party leaders and prime ministers pass, and even by the standards of subservience that MPs have learned to behave under every leader,

even by these standards, this prime minister has pushed it even further to the point where the habitually subservent MPs are at least talking off the record. You'll notice that the ones who are complaining are off the record, the ones who have no problem or speaking on the record. So there is trouble being stored up here for Mark Carney. We've already discussed many times in this program, his authoritarian streak. He also suffers, I think, from smartest guy in the room syndrome. And if you've always been the smartest guy around the table, or at least think you are, in his case, probably with some justice, it can impair your judgment.

You're not able to see other points of view. You're not able to hear signs of trouble brewing. not just in your party, but in the country, you're not getting all the facts. And you can be too locked up in your own brilliant schemes and not see the flaws in them. So sometimes the smartest guy in the room doesn't necessarily have the best judgment, and that's the danger that this is pointing to. Okay, got to leave it there. It was excellent reporting.

Thanks for that. Althea, and thanks for giving us a little something extra to talk about. That is at issue for this week. What do you think about the fight over the language around Canada's recession or whether that recession will even last? Are you concerned about the upcoming coups? review. Let us know what you think about any of those things. You can always send us an email. We're at Ask at CBC.C.com.ca. You can catch me on Roseby Barton live. That's Sundays at 10 a.m.

Eastern. We, though, will be back here in your podcast feeds next week. Thank you for listening. For more CBC podcasts, go to cbc.ca.ca slash podcasts.