At Issue - Ford threatens to cut the power if Trump imposes tariffs

Episode Date: December 13, 2024

At Issue this week: Ontario Premier Doug Ford says he’ll cut off energy exports to the U.S. if Donald Trump follows through on his tariff threat. The Liberal government gets set to drop its fall economic statment. And what’s at stake in the new Churchill Falls hydroelectric deal? Rosemary Barton hosts Chantal Hébert, Andrew Coyne and Althia Raj.

My name is Graham Isidor. I have a progressive eye disease called keratoconus. Unmaying I'm losing my vision has been hard, but explaining it to other people has been harder. Lately, I've been trying to talk about it. Short Sighted is an attempt to explain what vision loss feels like by exploring how it sounds. By sharing my story, we get into all the things you don't see

about hidden disabilities. Short Sighted, from CBC's Personally, available now. This is a CBC Podcast. Hey, I'm Rosemary Barton. This week on Ad Issue, the podcast edition for Thursday, December 12th. Taking on Trump. The Prime Minister once again met with the premiers to propose a border plan in the face of tariff threats from the President-elect.

Prime Minister, Minister LeBlanc and I and all of the premiers, that this is a serious moment for Canada and we are resolute and determined to meet that moment. Ontario Premier Doug Ford says all measures are on the table. We will go to the full extent, depending on how far this goes, we will go to the extent of cutting off their energy, going down to Michigan, going down to New York State, over to Wisconsin. This week we're asking what's to be made of how serious Doug Ford's threats of cutting energy are to the United States.

Chantal Hébert-Anderkoin and Althea Raj join me to talk about that. Plus, what can we expect from the fall economic statement next week? energy are to the United States. Chantal Hébert, Ender Coyne and Althea Raj join me to talk about that. Plus, what can we expect from the fall economic statement next week? I was struck with the fact that everybody agrees that they have to be on the same page. In principle. Yeah, in principle. And then they come out and they say different things. And I'm not sure how to take any of it in terms of the approach.

Very different things. Yeah. The Premier of Ontario is saying I'm willing to turn off the switch and stop selling electricity to the US. The Premier of Alberta, the Premier of Quebec, the Premier of Newfoundland, they're all saying no, no, no, we are not about to do this. It's going to be very hard for the federal government to manage to keep the political leadership of this country under the same tent, short of having had an election and a mandate from Canadian voters, which means you can say that it's the thing to do. What we are seeing in the case of Premier Ford is Premier Ford road testing an election on Canada-US relations in his province of Ontario. But whether that is a strategy that helps the larger issue

of how do we address this over the next six months, nine months? And the federal government will come up with, you know, border spending, etc. But that does not address the issue of we need a federal prime minister with a mandate that allows him to say, I'm here with you, Mr. Trump, for four years. We were also told that the premier met with Governor Whitmer of Michigan and Governor Hochul of New York this afternoon. So I don't know whether that was to reiterate he's going to shut down electricity or whether it was just to say, can you get on the same side so you can talk to Trump, maybe.

Yeah. So it's a mixture of agreement on a few things, like things about border measures, which is fine, but isn't, in my opinion, going to the tariffs. You're basically paying ransom to an extortionist who's not necessarily interested in the ransom you're paying. So that plus everyone going off half-cocked on things like, you know, export controls on electricity, etc. I think, rather, I think people should be planning on the basis that the tariff is probably going to happen. What we can do is to try to make ourselves more resilient

and more adaptable and more efficient in the face of that. For example, if we're about to face trade barriers along our southern border, maybe now is the time to talk seriously about getting rid of trade barriers within our country to make ourselves more efficient, to offset some of the costs of that or do you hear any of the premiers or for that matter the prime minister talking about that but that's not going to solve a 25 percent it's not going to solve it it's going to adapt to it and i think that's the issue we're facing right now is adapting to something that's going to be potentially very harmful to us but it's coming but but they are all now seemingly preparing retaliatory tariffs as well.

They're coming up with lists and things beyond just the electricity in Ontario. Yeah, I was going to say there's like three things that come out from what you said. One, not all the provinces are affected in the same way. For sure. And very clearly, the Premier of Ontario is scared, terrified even, and he's been out saying his own stuff for a while. And he cannot afford to have on an auto part that crosses the border six times a 25% tariff

every time that thing crosses the border. So he's in full panic mode. I think it's clear, I mean, none of us are in the room, obviously, so we don't really know, but there clearly was not a detailed plan because they're all saying different things and they haven't agreed on one course of action. The one course of action we know that they've agreed on is drawing up the list of potential retaliatory tariffs, things that they could do in response. The federal government has said that very publicly.

The other thing is that they all think Justin Trudeau is weak and they need to shove him aside in their own self-interest if it comes to that. We're already seeing that, for example, from the Premier of Alberta. But that goes back to the divide and conquer thing, right? Like if everybody's going off half-cocked saying different things and they don't believe Justin Trudeau can get it done, then you're kind of allowing the president-elect to have an opening, are you not? Yes, up to a point.

But even on tariffs, yes, the federal government is drawing up a list. And yes, Ontario is probably on side with that. Quebec isn't. I read what Premier Legault had to say, and the last two paragraphs were about we cannot have a tariff war, which is kind of the opposite. He wants to renegotiate the new NAFTA now, which is... So I don't think the prime minister helped himself this week with his remarks about this great defeat for women

because Kamala Harris won and how bad that was. And he's lucky that he's not running against a female leader who could become prime minister. Elizabeth May is not on that way because we would have to say, well, Mr. Trudeau, aren't you inflicting a setback on women if you beat a female leader? It made no sense, but it didn't build confidence.

And he's going to have to be more careful about that. Those were prepared lines, as far as I could tell. Yes, and it was noticed by Elon Musk. And by the premiers who apparently gave him a tongue lashing at the meeting. But just to come back to Chantal's first point, we need an election. We need it not only so that whoever is in power, whether it's the Conservatives or Liberals or anybody else, has a fresh mandate for the people and has some fighting chance of putting together a coherent response, but also so that we can road test those different responses

in the course of the campaign. Each of the leaders, each of the parties, can put forward their approach, their personal bona fides, their abilities, their temperament to be able to deal with this. And whoever then comes out of that can be able to say, I've got the people of Canada behind me, and now let's get to work. But we would have an election because Donald Trump is threatening tariffs? We would have an election because we need to have someone who leads the country that has a mandate. We will have an election. We're not talking about an early election. There will be an election in 2025, no matter what. But that election should take place sooner rather than

later, because you have a government that will set its pieces on the board to have a strategy. We don't even know if the prime minister who prepares for the G7 summit in June is going to be the prime minister that actually chairs the G7 meeting. Well, probably. But we don't even know that. That's how fragile it is. And even if so, it's Justin Trudeau gets there. Everyone at that table is going to know that he may not be there by the time the leaves fall. Sure.

But that's what we're working with for now, right? But it's called a weak hand, and at this point you need someone, and it can be Justin Trudeau, but you need someone with a stronger hand than six months to go and 20 points behind in the polls. I'm not sure that we need an election. I understand and I agree with the arguments for it, but I'm not sure that we need one.

I do think that the premiers and the prime minister and the key cabinet ministers around that table need to put their differences aside and have a united message that represents the interest of the country as a whole, instead of playing basically domestic politics, because we are going to get squished if we do not have a united message. But everybody has different interests. As you rightly pointed out, B.C. does not need the United States the way Ontario does. Okay, but when Ontario goes down economically,

B.C. takes a hit. Let's be serious here. And as does the auto industry in the U.S., by the way. But still, to say Ontario can go it alone in Quebec, because who cares? It's not a problem for Saskatchewan. I'm not so sure that that works out really well economically. But if the premiers all got on the same page,

there's obviously ways to criticize the prime minister, but to still be on the same page in terms of the approach to Donald Trump. Would that not be enough to sort of get us through until the election? Well, if, if, if. How is that going to happen without federal leadership? It's hard enough at the best of times. But particularly when people are under pressure, when they've got their own political interests.

Right now, we've got a federal leadership where there are 20 points behind the polls or more, where at least a good chunk of the caucus doesn't want the present leader to be leading them, where they're fighting amongst themselves between the finance minister and the prime minister. It's a mess. And the notion that we're going to stumble along for 10 months of this while Donald Trump just kind of picks them apart and plays province against province and party against party and minister against minister, it's unthinkable.

At issue tonight, the fall economic statement. Chrystia Freeland will give Canada a look at the state of the country's finances next week. Maintaining a declining debt to GDP ratio is our fiscal anchor. I do expect that when we table the fall economic statement on Monday, the debt to GDP ratio for 23-24, which we put forward in the 24 budget, will be met. So how will the government balance new spending and a ballooning deficit? Here to break it down again, Chantal, Andrew and Althea. Because you can have a bigger deficit, I think we all are expecting a larger deficit, and still keep the quote-unquote guardrails that Chris Jeffreeland is talking about there. Well, just that one.

Just that one. One of the most forgiving of the guardrails. That's right, the most expandable. You know, you do the numbers and the GDP is coming in higher than expected. So they could actually balloon the deficit by up to $20 billion for the fiscal year that ended in March, which we still haven't heard about. So we could have like a $60 billion deficit. It probably won't be that high, but it'll be probably shockingly high. So Monday is shaping up to be a fiasco, not only because the numbers are going to be way over what they'd assured us they would be just

eight months ago, but because you have the prospect of the finance minister basically being made to deliver a speech and a document that she doesn't believe in, that we have learned through 10 sources is at odds with the prime minister over, the prime minister pushing for much more spending than she's comfortable with, and where potentially she could be on her way out the door the minute she's given the speech. They're now talking to Mark Carney, which they've been careful to leak out. So you've got, frankly, a finance minister in name only. This is not a moment when we're looking at 25% tariffs coming down the pipe,

when we've got billions more in defense spending coming at us, when we've got a health care crisis. This is an unusually critical document to be conveying a sense that the finances are under control, that they can handle all these different challenges. And right now we've got chaos, frankly. What do you think? I've spent a week wondering who it serves to have so many leaks about how the finance minister and the prime minister are at odds.

It certainly doesn't help the finance minister for all the reasons that Andrew explained, but it doesn't help the prime minister either to look like he has a finance minister that he doesn't have enough confidence in to shore her up as she comes up with that document. At some point, he gets to wear this. And that's not good news. You asked earlier about, you know, the opposition parties are already criticizing her. Well, they're the least of her problems at this point. But it's also, you kind of know that if someone is presenting you with a fiscal

update the day before Parliament rises, so to have as few question periods as possible on the eve of all the Christmas parties so that people forget it quickly, that you have nothing that you're proud of presenting. Yeah, I mean, I don't disagree with that. There's a reason it's happening on the second last day of the House of Commons. I'm just thankful they're actually doing it in the House of Commons because nothing prevented her from going to Toronto or Saskatoon and delivering it to an audience in a hotel room. So it's nice that they're doing it in a private room.

Point store for that. Yeah, this is probably the only point. I agree with Andrew. There's more, the GDP has grown, so she can, she has a much more wiggle room than she has. She basically told us this week that she's blowing past the deficit projections that she outlined a few months earlier. The rumor around Ottawa is that it's going to be in the $60 billion range. That is a lot of money. Now, part of that, I think is what they've told caucus,

is the $20 billion set aside for a settlement with regards to Indigenous children, if I remember correctly. Child welfare, yeah. And that did not get approved yet, but that money has been put aside. That's one-time allocation. The greater problem is that the government has introduced, budget after budget, new programs, have not properly funded those programs. We are in a structural deficit situation year after year after year.

They have not actually done a full spending review, which frankly they should do. They've given departmental targets to find savings, but they need to go after every line item to figure out do we need to be spending this money especially after covid so there is a lack of fiscal rigor that i think legitimately is being what the criticism is being levied against the government fair on the drama about christy freeland and justin trudeau there's always been tensions i finance ministers like Jim Flaherty and Stephen Harper, Paul Martin and Jean Chassin, obviously famously. But if you're coming to a position where the prime minister wants you to spend tens of billions of dollars more and you are uncomfortable, nothing stops you from quitting.

Except maybe you don't want to undermine your leader. Maybe that's not something you're willing to do. If you're being asked to do something that you think is economic suicide from the country, resign. But if she had resigned, let's be serious, in the shape that the government is in, it would have blown up the government itself. That is one of the reasons why I actually don't think the innuendos and the rumors about the division being so stark are actually that true. Well, this didn't just come out yesterday.

This goes back to July. Earlier, the courtship of Mark Carney. It is unusual for the prime minister's chief of staff to be leaking to the press that she does not have confidence in the communications abilities of the Finance Minister. Well, I don't know that to be true. For the Prime Minister then to be asked, does he have confidence in his Finance Minister, and he says only I have confidence in her abilities. For this soap opera with the courtship of Mark Carney that goes on and on. That is unusual.

And for her to have clung on to the job in the face of this, I mean, do you don't want to undermine your leader? Well, your leader's doing a pretty good job of undermining you. And at some point, yeah, I think it's not only in your own interest, but it's in the interest of the country to clear this up. We cannot have the situation where we have one, two, three, maybe four different finance ministers operating at the same time in this country. It wasn't a big secret as soon as they announced that GST holiday and those checks that I'm not sure we will ever see. It wasn't a secret that finance had lost a battle and the PMO had won a battle. And that the battle was hard.

Does this mean that there's a major rift? I don't know. You could see it some other way and look at Chrystia Freeland's statements on the $250 check that is not in the mail even and will not be when there's no mail strike. She may have won that battle eventually by saying we're a minority government. We don't have the support for it we we actually don't know that but there are things like the capital gain tax changes part of our forecast is based on the revenues from a change that is not in the law as income tax season comes around yeah and it's not law and it's not even presented at issue Churchill Falls the hydroelectric project was a bitter point of contention between Quebec and Newfoundland for decades.

The historic deal will mean more than $220 billion in total revenue for Newfoundland and Labrador. Today, as our province signs a memorandum of understanding on a new energy partnership, we mark a new working relationship, a new partnership with the province of Quebec. All right, here to break down what it means for both provinces, Chantal, Andrew and Althea. I'm going to start with you, Chantal, because it is, I mean, it is historic, remarkable. It's going to change Newfoundland and Labrador profoundly.

I don't know that I understand why the Premier of Quebec did it, other than it was the right thing to do. No, no, no, no, no. Quebec is going to need more electricity. It is a lot easier to arrive at this agreement, which, yes, means that Quebec will be paying more for Churchill Falls power between now and 2041 than it would have. That's when the current agreement ends.

But it also means that Quebec and Newfoundland and Labrador, if this works out, because there are still kinks to be ironed, will be working together on another project that all of this is a lot less costly than to start new dams in Quebec. When you do the math, it's obvious. It's a no-brainer. It. And when you do the math, it's obvious. It's a no-brainer. It's better for Newfoundland, but it's also better for Quebec than to start from scratch and try to do another mega-dam.

So basically, everybody in this deal is getting something, and it is not an act of generosity on the part of the government of Quebec. No, but it's transformational for the province of Newfoundland and Labrador. Yeah, Quebec needs the power and Newfoundland and Labrador needs the money and the muscle, etc. So, yeah, adults in the room made a sensible decision. I think the difference between this agreement and the previous agreement is now Newfoundland has some leverage going forward. They didn't have leverage to reopen the old deal, to recoup the losses from all those years previously.

They're just going to have to eat. But going forward, they had some leverage because they had something that Quebec wanted, and lo and behold, you get a deal. Althea? Doesn't it make you feel, like, happy inside? Like, is the Federation working? I was just so touched how like wholesome they embrace

between the leaders was and everybody talking about you know I wish my father was here to see this lovely and it's a deal crafted by necessity and shot that is absolutely right for several years now the government of Quebec has talked about the energy shortage that the provinces face. And it is a cheaper way. It is also a sustainable way. This locks Quebec and Newfoundland and Labrador in until 2075. So it's smart politics. It's smarter financial economic measures for the province.

And it's nice that both sides can phrase an agreement in a win-win scenario, because we too often don't see that. I would have felt a bit better if they'd already done the indigenous consultations that they're going to have to do. That's a very good point. Lots still to be negotiated. Look, it's mostly about the numbers, but let's not underestimate the emotional importance of this,

particularly in Newfoundland. That old deal wasn't just a loss to Newfoundland in terms of the money. It was humiliating. Yes. And this deal, I think, will solve a lot of those wounds. Yeah. If they can get it all sorted with the others. Yes, we've had our share of a missed rendezvous with history.

So let's wait to see. And they didn't consult them before because... I don't know. But apparently, from what I read, it's still work to be done. There were Inuit leaders at the announcement. But this is about the new development. Yes.

Oh, yes. Not about the new payment. One suspects there's a bit of a squeeze play going on here. Oh, look, the deal's already done. Don't want to get in the way of it. That's the last time I heard that, we were coming out of me today. Exactly. Can I ask this question to you, Chantal?

Does it help Premier Legault, who's still in the toilet? I'm not sure it gets him out of that place you just described. I say that, you know. Earthy description. Yes, sir. And it also reinforced the already strong position of Michael Sabio, who now has Hydro-Québec and who is an architect of this agreement. So me, my prediction, we change governments maybe in two years. Mr. Sabio, if he wants to stay, remains the head of Hydro-Québec.

Mr. Sabio, who was the, just to come full circle, the Deputy Minister of Finance. Yes, I discovered that the PMO was taking so much space that they went on to do more creative things. See? Don't you love how it all comes back to the same thing? The relative simplicity of Quebec politics. Aren't we a small country? Good to see you.

That is at issue for this week. What do you make of the Team Canada approach to tariffs so far? Are you confident in how our leaders are responding? Let us know. You can send us an email. Ask at cbc.ca. And remember, you can catch me on Rosemary Barton Live Sundays at 10 a.m. Eastern. We'll be back in your feeds next week.

Thanks for listening. For more CBC Podcasts, go to cbc.ca slash podcasts.