Front Burner - Kevin O’Leary and the 51st state

Episode Date: January 20, 2025

For weeks, U.S. President-elect Donald Trump has been talking about making Canada the 51st state. He’s even said that he’d look to use economic force to ‘get rid’ of the border between the two countries.Canadian businessman Kevin O’Leary has been pushing the potential benefits of an ‘economic union’ with the U.S. He explained his case in a feature interview with host Jayme Poisson on Sunday.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

Hey there, I'm Alameen Abdelmahmoud. I am the host of Komotion. You know when there's that thing that's like all over your social feeds or maybe a new movie or a show on Netflix that everyone is talking about or maybe your favorite artist just dropped a new song or a new album. These are the moments when I love to gather the smartest, funniest people together. We get them in the group chat and then we dig into the culture that is all around us. And commotion does this every single day. Find us wherever you get your podcasts. This is a CBC Podcast. What would be the best way to protect Canada? Economic force.

Because Canada and the United States, that would really be something. You get rid of that artificially drawn line and you take a look at what that looks like. And it would also be much better for national security. Don't forget, we basically protect Canada. Hey everybody, Jamie here. So after weeks of 51st state trolling, I am willing to bet that when Donald Trump threatened to use economic force to annex this country, a great number of you thought, uh, no thanks. Kevin O'Leary, on the other hand, thinks a quote, economic union, unquote, with the US is a really great idea. Kevin O'Leary is a wealthy Canadian reality TV star and businessman,

and he's here to explain his case. Hi, Mr. O'Leary. Thank you so much for coming on to Frontburner. Thank you very much. So I've been watching you talk about this economic union that you would like to see with America, and I am, I have to say, struggling to understand how this wouldn't end with us just becoming the 51st state. So I wonder if we could start here. What do you want to

see happen and how is it different from what we currently have with the United States? Okay, so let's just, this narrative started about three weeks ago from a trip to Mar-a-Lago I had. And it was a violent reaction, obviously. No Canadian wants to sell their sovereignty, neither do I. But as I've told people many times, particularly now that we approach Donald Trump's inauguration, in dealing with Trump, you have to be able to differentiate the noise from the signal. The signal is there's a huge opportunity, an economic opportunity to create a behemoth economy that provides for all of its citizens and gives us incredible financial

and military might in a very uncertain world. So we can get into the details of this. It's a... Yeah. I mean, take me through the details. What is the signal to you? What do you think it looks like? Because certainly what he's saying out loud is that he will use economic force to get rid of the border between the two countries. Yeah, okay. So I'm in Washington today, so is Danielle Smith. She is making the rounds because she has an advantage now that no other premier has. She has a personal relationship with Donald Trump and many of his advisors and

his administration. She did the right thing. She took a lot of criticism for it, I understand, but she's thinking long term. And she also knows that she's vitally important to the United States. She provided over four million barrels a day going to the US and she wants to double that. That's her objective. Trump wants it too. He wants the pipeline. I'm getting specific now. And you know, Burgum, the energy czar, wants it also. And all of this stuff is happening in the context of a very volatile period as Trump

takes power. And he is threatened, he's taxed, I got it. So the idea, which is informal, first of all, I do not represent the Canadian government, far from it. I'm trying to get rid of the current Canadian government, and so is the rest of Canada as far as I can tell. I am a single individual having a conversation with another single individual happens to be coming the president of the United States, so what? I'm allowed to say whatever I

wish in a conversation and I take that freedom and I do it, but these are ideas that have been floated around in private conversations around Mar-a-Lago. It's just some guy's house and he's having a dinner party. That's exactly the way I would categorize this. It's not on the record. He's not president of that conversation. He's going to be the president tomorrow. So just what are the ideas?

Take me through what it would look like if you don't mind. Number one, a common currency. So all of our commodities, all of our resources are priced in US dollars all around the world. We are one of the richest nations on earth in terms of proven reserves. It's all priced in US dollars. I'm going to suggest to you that if you polled Canadians right now, 11 out of 10 would want to swap their Trudeau pesos for the American dollar. There's no question about that.

So that's not a hard sell. If you're going to do that, you have to get a couple of pieces on the board of the Fed. So the Bank of Canada would cooperate with the Fed on a basically, if you want to keep your Trudeau pesos, that's fine. But you have a common currency now in the US dollar. Okay. You know, people are going to hang up a little, put them on their bedroom wall, say, remember that worthless piece of paper? Now I have something real. So let's start there. Okay. So let me ask you, Mr. O'Leary, what would happen to the money in my TFSA or RRSP if we did that? So right now the dollar's clocking in at 69.5 cents, right? Would I suddenly be 30% poorer? No, it's to be negotiated. I would argue that

Canadians should ask for a one-to-one parity one-time swap. And why would the US ever give us that? How do you know? It hasn't been negotiated yet. We don't know. But what would be in it for them? What would be in it for them? The unity with a country that would provide a massive economy with not having need of anything from anybody else. We'd have total independence on every single resource and precious metal. Right now, when they buy stuff from us, it's cheaper for them. Why would they wanna make it more expensive?

Why would they make it more expensive? It's the same as a common currency. We price our oil in US dollars already. We already do that. We price our wood in US dollars already. We already do that. We price our wood in US dollars. We price our precious metals in US dollars, not just to the Americans, everybody on earth. I don't think the dollar is a tough one. It's just not a tough sell. If somebody came along and said, if you join this program, you get US dollars in your savings account, I don't think you're going to say no. I don't think any Canadian is going to say no. That's not the problem. The problem is getting into more detail of what the union looks like. So if you had two

seats on the Fed, which is a good pro-rated amount, you'd have some say on interest rates, and the Bank of Canada would continue to exist. And so would the Canadian banking system. It all stays the same, except we're trying to solve for an economic union. Next. Yeah. No tariffs anywhere, not just North-South. Because I'll tell you, take Vermont, for example, they're pretty unhappy about the situation with dairy in Quebec. We have barriers between provinces right now that are worse than tariffs being proposed by Trump on Canadian goods going in the United States.

You cannot ship wine from British Columbia to Quebec or Ontario without massive tariffs. It sometimes bans. But between the US and Canada there are very few tariffs with the exception of dairy as you mentioned, lumber poultry. Like aren't you just describing to me USMCA? That's just said there is not factual. Okay. The price of maple syrup, a multi-billion dollar commodity is priced by a cooperative in Quebec. And the farmers who tap maple syrup in Vermont are pissed. They have no say in the price of what they spend their time creating. It's an unfair situation. What about our industries though? Like, I guess, like maple syrup, but certainly like BC wines or our media landscape. How do they not become completely awash in American companies?

What about our culture? We don't have to give up our culture. You're not giving up your citizenship. If you're born in Montreal, like I was, you're not giving up that. We're only focusing on the economic opportunity. If you're manufacturing something in Quebec or in Ontario or BC, you have open access to the largest market on earth with no tariffs, complete access to the largest market. And you don't think they take over ours? Like what happens to BC Mark? They can take over it now. You can buy a Canadian company, you can come in and buy,

and we can buy, I buy American companies, that's what I'm doing here. I invest in American companies. We're talking about stripping away the resistance of tariffs. I mean, these are common sense situations. I get the paranoia of the rhetoric and the noise we talked about earlier. Oh my goodness, I'm going to be an American. No, you're not. You're not going to be an American. You're just going to get access to the largest market on earth. Now, let's talk about that access for you personally. If you're indigenous today in Canada, lucky enough to be an Indigenous citizen, you walk across the border free, both ways. That is a privilege that Indigenous people of all North America have, no matter what state or province they're in. I'm proposing something similar called a uni. Now let me explain how this works.

It takes some of the ideas of the economic union in Europe, but adds to it. If you're a Canadian citizen in good standing with a Canadian passport, or the same in the United States, you have in good standing a US passport, you can apply for a uni. Both countries have a veto right. So if you get approved in both countries, you get this new passport that gives you freedom of movement anywhere you wish in North America,

including your family, you can live wherever you like. You pay a one constant tax rate. Let's just call it 21%. No deductions. But where the UNE comes in, even more importantly, is controlling immigration. If you want to come to Waterloo, for example, and apply to be a robotics engineer, most coveted degree you can get in engineering right now. We let

people come and do that from all around the world. We've spent millions building the infrastructure there in the co-op programs and then like idiots we kick them out after they graduate. How stupid is that? Why don't we grant them a uni and pre-approve their families with background checks and then let them into the country and say you can work anywhere you want. Why wouldn't that result in people just going to the United States and working there? How could we stop, how would that stop healthcare workers from just, how would that not result in healthcare workers just going to Buffalo or Phoenix and shutting up shop there? I'm just trying to figure out how this does not cause the worst brain

drain that we've ever seen. You're basically telling me the Canadians don't want to be Canadians and they all want to move to the United States. You know that doesn't sound, I mean that sounds ridiculous. That's not gonna happen. You know how many Americans want to move up to BC or Kelowna or come in? American families, many of them have their roots in Canada or have an uncle millier or whatever it is. There's a lot of connectivity and DNA between our two countries. Well, housing is very expensive here. Salaries are larger in the US. All of that money invested in Canada to reduce housing and housing is up 4x in the last eight years. So that's not working, whatever it is.

But let's stay on your premise that everybody leaves Canada. That's not going to happen. I think many people would come to Canada. You get an adjustment if you got a uni. First, you have to get it. You have to apply for it. You have to get it. Once you get it, you're free to roam. Why would Trump, sorry, why would Trump agree to this?

He's talking a lot about unleashing the largest mass deportation program in the country's history. Contrary to the evidence, he says immigrants are stealing American jobs. So why would he want the idea? Why would he be open to the idea of extending passports and jobs to more people from Canada? Those people you're referencing are illegal immigrants. They broke the law to enter the country. Of course, they're going to get deported.

That was the premise he made. He'd been given this majority mandate. That was his number one item saying, look, I'm going to clean this up. The American people by seven out of 10 wanted to do this and he's going to start it this week. The message is don't come start it this week. The message is don't come into the country illegally. The UNI does not let that

happen. You have to apply for it. It's a legal immigration tool and it's used to be selective on who you let into the economy and you want the best and the brightest and you want them to stay. We've got to focus on the signal. This is not about selling sovereignty. This is not about you becoming an American citizen. It's giving you free unfettered access to the market on an un-tariff basis, east-west, north-south. Look, when I started having this conversation, it was very contentious. That was four weeks ago.

Now 43% of Canadians polled want to learn more. Well, I'm looking at an abacus data poll that found 71% completely against it. Yeah, because that poll said you're giving up your sovereignty. We're not giving up sovereignty under this model. It's just economic union. You know, you have to peel the onion to discover the opportunities. Canadians do not have to agree to this. We're going into this negotiation anyways in about eight months. I don't know which leader will lead us there, but it won't be Trudeau. And so the point is this is NAFTA three on steroids.

That's what this is. Now, if someone offered me a uni, I have an O1 visa for the United States, but they offered me a uni, that would be far more convenient. I would take that, no question about it. If you told me that I had no tariffs in investing in Canada and selling goods made there to the United States, I would invest more in percent, right? Like, how would we be able

to fund things like single payer health care here in this country with that? Well, both health healthcare platforms are broken in the United States as well. The insurance policies there are punitively expensive. Canada has a fantastic technology in healthcare, but access is a challenge. This is a perennial problem for both. I would think a larger market

and no tariffs we could solve for it. I mean, this is not new information. It's being paranoid about change is not the answer. It's exploring the opportunity, look at the signal and move forward in the path of least resistance. And what I'm suggesting is just common sense. I mean, do you think it's really

about being paranoid about change or stealing ourselves and taking this president at his word? You know, Trump is, whether you like him or you hate him, what he sees, what he wants is a giant economic union, a behemoth economy that can protect itself. But I'm sure what he wants is an economic union that benefits the United States, right? And you know... I'm saying it's only to the United States. Why wouldn't Canadians benefit?

I don't understand why you think that way. Well, just a lot of the stuff that makes the EU cool. I can't imagine the United States would want a super national government, new competition laws. I still have lots of questions about the free flow of labor and what that would do to a brain drain here. The dollar, I do not understand why they would want to negotiate and give us any kind of deal beyond or above market value on the dollar. Why would they want to do any of this? And the Fed, and sorry, just to talk about the Fed, like, you know, my understanding is the way

that these institutions work is that they prioritize kind of the big guys, right? Like a Germany over a Greece. So is there not a high probability that we really are absolutely not a priority when it comes to decision making in an institution like that? No, that's not the problem and you're wrong.

The point is together, I mean, in some ways that 49th parallel, why is it there? I mean, if you think about it, that's not the border we're trying to protect. We're trying to protect the northern border because right now the Chinese are knocking on our door and so are the Russians. And I think that's what's on Trump's mind. Canadians should worry about that too. We have the benefit of being protected by the US military and we have fought beside them in countless wars, as you know.

We're joined at the hip in our beliefs of democracy and freedom of speech. So 80, 90 percent of the pillar of union is there. Nobody said you have to give up your sovereignty or change where you were born or anything like that. That's not the issue. It's an economic union. And so all of this you're speculating, it's fair to do so.

You can speculate, but you don't know because it hasn't been negotiated. I'm just one guy having a conversation. I'm not representing the Canadian government, but I'm very fortunate to have 10 million followers. And I broadcast to them and they say what they think. And what I'm hearing is different than what you're hearing. A lot of Americans are interested, a lot of Canadians are interested. I don't have to hire a pollster.

I have my own. So I just talk to them every day. And they keep going. This is very interesting, very interesting. Tell me more. That's what I'm hearing. The last time that Trump threatened to tear up NAFTA, we renegotiated.

And I think whatever you think about Trudeau and this government is generally believed to have gone quite well for us, right? We saw trade increase 30% in that time, USMCA. So why not just let those guys negotiate right now instead of kind of inserting yourself in this debate. Listen, there's no government in Canada. There's no guys doing anything right now.

We're in limbo and I'm free to have- Well, there was a big meeting earlier this week with all of the premiers, cabinet ministers that have been going down to Mar-a-Lago. There are people that have been working on this before Trump even got elected. I want to be transparent with you. I advise Trump to ignore them because they're gonna be gone soon and you may think that's treason. Treason is not. A lot of people think that that's treasonous and so what how would you respond to that? They see you kind of meddling in a situation that you have no mandate to meddle in? I have a Canadian passport.

I'm a Canadian citizen. I do not want Justin Trudeau negotiating for me. He's an idiot. Sorry. But it's not just Justin Trudeau, right? It's all the premiers, with the exception of Daniel Smith, right? Do you think Doug Ford is an idiot?

Do you think Doug Ford is an idiot? No, Doug Ford did not get a session in Mar-a-Lago. He's been throwing bars at Trump. And I think he should go down there and talk to him. I think he's a great guy. But I'll tell you something, the answer is not to throw tariffs at each other. The answer is to sit down and discuss.

And frankly, the government that has been going down there that you just referenced is the same government that has destroyed our economy as measured by the Canadian dollar. I don't want anybody there negotiating on my behalf as a Canadian. I'm not speaking for anybody else except myself. I have every right to go to Mar-a-Lago and say whatever I want. We enjoy freedom of speech, all of us. You can do the same thing if you wish, but I'm telling you I don't want him negotiating. I'm talking about the liberal government. Yeah new government Tex and Diane had it all until the night

Neither of them wished to relive the night only one of them can to relive. The night only one of them can. She said, Tex, what did you do? You shot me. Join us as we dive deep into a world of power, money, and greed, and one man's secret quest to grab the million dollar fortune of his deceased wife. From Sony Music Entertainment and Waveland Road, this is Deadly Fortune.

Listen wherever you get your podcast. From Sony Music Entertainment and Waveland Road, this is Deadly Fortune. Listen wherever you get your podcast. I want to ask you about Premier Daniel Smith. So you went down there with her and you helped facilitate that meeting, I understand. You mentioned or you talked about her a little bit earlier, but why do you think it's a good idea what she's doing? So she's being criticized, people are criticizing her for essentially taking her leverage off the table. She is saying that she's not interested in restricting energy exports out of Alberta,

and the criticism of that is that she's just putting her chips on the table, right? And giving away any leverage that we might have as a country. And why is she not doing that? The idea of erasing $188 billion with the revenue to Alberta seems stupid to me and certainly to most Canadians. That would be a really dumb thing to do. But you would be forcing the US to find other sources of energy during a period of negotiation and you destroy the Alberta economy. How dumb is that? That's crazy.

And that shouldn't happen. So if another premier from another province tells her to do that, I'm not surprised she says what she says because that's a really stupid idea. That's not protecting your own people. You know, I'm empathetic that she's trying to stand up for Alberta and Albertans. But just, you know, you're a business guy. Like, if I'm a developer and I want to buy 11 houses on a block to tear down, don't those houses stand a better chance of getting a better deal if they negotiate together instead of picking them off one by one? Why is this a good strategy?

Shouldn't she like give the impression at least that it's on the table? This massive lever that she could pull if she needed to. Why is she giving it away? Because first of all there hasn't been any tariffs imposed yet and we don't know the size of them. She's dealing, as all premiers are, in a void. There's no information yet. You've made the assumption that on Tuesday there's 25%. That may happen, they may not happen. You negotiate with a lack of information. You've got to wait and see. She always has the option to shut off the spigot anytime she wants. And so right now, all these ideas of what we're going to

do to the United States and let's keep throwing barbs at Trump and let's get the rhetoric up. We don't know what's going to happen next. You don't know? I don't know. We might as well just wait and see. We do have envoys. My next stop after this, I'm going to the Canadian Embassy. There's lots of Canadians here in Washington to celebrate this transition of power and we're here for a reason because this is our closest neighbor. We have an economic union with them. We all understand that. And many of the border state governors and senators are also attending to mingle and meet Daniel Smith and other Canadian representatives, because we know at some point this will get negotiated. It'll get done. Again, we've got to focus on the signal.

But beyond that, what we started having this narrative about was a bigger union, which has been thrown on the table by Trump. He started that. He's the one that said in a recent speech, as you recall, whatever he called it, a beautiful thing or whatever, it's just noise. But the signal is, let's talk economic union.

And that's what I'm talking about. And I think a lot of Canadians are interested in it. You have an AI data center in Alberta that you're trying to get up and running. You're running into some issues with it, opposition from the Cree Nation, who say that they have not been consulted on it. Was your trip to Mar-a-Lago an attempt to curry favor with the Premier, with Premier Daniel Smith? Did you talk about that with the premier when you were helping her navigate Mar-a-Lago?

Yes, the Alberta Initiative had started about six, or maybe it's eight months ago now. I was, we also developed data centers in places like West Virginia and North Dakota. And I got a call from one of her representatives, and they said, look, we've seen this press about the West Virginia project. Why is it you never come to Canada and talk to us about data centers? I said, well, everybody knows that you can't get a permit. And that's why there's no foreign capital coming to Canada at all, that that's controlled in Ottawa. And he said, well, you know, you should take a call from the premier because she has a

message for you. She has a rights back. I said, oh, really? Of course, I respect I'm going to take that call. And I did. And she, well, first of all, she's the Albertan people are pretty lucky to have her. She's one hell of a salesperson. She convinced me to fund a team that flies far away, it's from Abu Dhabi in Dubai and

Washington DC, to go up to Alberta, get in a helicopter with engineers and tour the entire province looking for data center sites. And Carl Agrin, who was considered worldwide the number one engineer for data centers, he built the very first hypercenter in Abu Dhabi. And he flew up there. He came back when he landed and the chopper was, I could hear it on the cell phone, he said, Kevin, buy it all. I have never seen anything like this. This is a unicorn in the world.

The opportunity here for the world's largest data center is unique. It has everything we need, and they've got the permits. And I said, are you sure? I thought we couldn't get permits. So I went around the world initially saying, look, it's going to cost $70 billion. That's money coming back into Canada. That's tens of thousands of jobs. That's a whole new Polytechnical Institute to support the AI data center.

That's all of that coming back. And most sovereign wealth funds didn't believe it. They didn't believe it because they cannot, Canada's been out there with our screens. So I said, sorry, Daniel Smith, you're gonna have to come on a plane with me and we're gonna have to do the tour together. They don't believe you.

And she did. We flew to meet some of the largest funds on earth, eye to eye, and she is Canada's, I believe, best representative. That woman knows how to work her room. She knows how to, like I'm saying a lot of, giving her praises and I don't do this unless it's- Yeah. I mean, what would you say to somebody who's listening to you and saying that you're praising

her so much because you want your data center approved? I don't know. I don't want my data center. She wants my data center. Canadians want my data center. The whole country wants my data center. Everybody in Canada wants me to bring $70 billion back so that our economy can start lighting up again. And we want to be number one as Canadians in AI technology.

It's the whole country. I'm just the conduit to make it happen. I'm an investor. That's what I do. I have found a single Canadian, including this discussion you referenced around Indigenous people, we're consulting with our neighbors now. We're going to bring thousands of jobs and educate anybody that's interested in becoming an AI engineer because we need them. And we're in that narrative now. We've reached out first. Many of them, in fact, there's another series of meetings on January 28th. We are not doing anything out of sync with Indigenous people, not a single thing. We know we're going to be

working with them, and I think they're pretty interested in the opportunity, spec by spec. If they don't want to do it, I get it, but I don't know why they wouldn't. I mean, my goods, this is not a refinery. This is not dirty technology. This is cutting edge AI and taking a leadership position worldwide. Every large AI company, every one of them knows about this project now

and is asking and inquiring. Just ask any of the ministers in Alberta, the inbound inquiries about this project. Mr. O'Leary, before we go, I just wanna come back to this idea of the economic union with the United States. I know you've got a bid to buy TikTok. And is this stomping for an economic union

a way to give some airtime to an idea that Trump seems very into, so that you can get FaceTime with him, stay in his good graces to pitch your bid to buy TikTok? I'm not trying to get his good graces. I've been talking to him for a long time. I'm just an investor. My interest in TikTok is it's a incredible opportunity. It's a legacy deal.

I, my vision of this thing, along with Frank McCourt, my partner is to create the world's largest television network. It's based on freedom of speech and ownership of your own data and democracy. And what I think is going to happen here, in fact, you know, today we, we've got meetings with, uh, the China committee on this thing. Trump just put out a statement about an hour or 10 minutes before you and I started talking that he sees this as some kind of a joint venture. Wallace was on Face the Nation, specifically referenced our bid because it's the only one

that Xi has in his hands right now. It's an actual offer that he could sign, an LOI, and we could light it up again. All these are moving parts. The outcome, I don't know. Will there be other bids? I don't know. I don't know, but I do know what's important is to be able to have a narrative. And this deal is controlled by Donald Trump. It's his. It's not going to be lit up until he decides what it's going to look like. So of course I have to have his ear. It's his deal. So if he tells us do this, we're going to do that. We're a service provider.

So will Oracle, so will the others. But make no mistake about it. This whole situation is controlled by Trump in sheep. And so whatever they decide as investors, we have to execute. That's it. I mean, this is not a Kevin O'Leary, Frank McCourt deal. It's a Donald Trump deal. OK, Mr. O'Leary, thank you very much for taking the time.

I really listen, I'm happy to have the narrative. I'm glad we're having it because this is a great way to communicate. You may not agree with what I'm saying, but at least talking about it. I really appreciate it. Thanks a lot. OK, I appreciate you coming by. Thank you. Bye-bye. All right, that is allbc.ca slash podcasts.