Front Burner - Politics! Carney so far, Poilievre’s second chance

Episode Date: July 3, 2025

Prime Minister Mark Carney made big promises to transform the Canadian economy, fast track national building projects and secure a trade deal with U.S. He also set Canada Day this year as a deadline for some key goals. How has he done so far and what are we learning about what he’s willing to do to make things happen?Plus, where do trade talks stand now that Ottawa has dropped the Digital Services Tax, a major sticking point for their American counterparts? How has Pierre Poilievre been handling his time away from Parliament and the byelection race in Alberta? Catherine Cullen, host of CBC’s The House, joins us. For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

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Hi, I'm Elaine Chao, in for Jamie Poisson. When Mark Carney won the election back in April, he promised to drastically transform Canada's economy so that it could stand up to Donald Trump's tariffs and annexation threats. The goal was to move fast and solve big problems by Canada Day. That deadline's now passed. Has he done it? My colleague Catherine Cullen, host of the House, is here to talk about what's been accomplished in these first two months in office. Hi Catherine. Hey Elaine. We're also going to talk about conservative leader Pierre Poliev's upcoming by-election and the whiplash from the latest round of trade talks with the U.S.

of trade talks with the US. Catherine, the trade talks with the US fell apart last Friday over the digital services tax and then got put back on after Ottawa decided to drop the tax late Sunday night. And just to remind our listeners, this was the tax that was going to affect tech giants like Amazon, Apple, Airbnb, Google, Meta, Uber, you know, companies that offer online services and advertising. They were going to be taxed 3% on the money that they make from Canadian users and customers. It was going to start collecting payments on Monday and bring around $2 billion at first and an estimated $7 billion over the next five years. And, you know, the tax didn't have fans in the White House. The Biden administration was not into this, Trump

even less so. And now that it's gone, the White House is really painting this as a big win for Trump. It's very simple. Prime Minister Carney in Canada caved to President Trump in the United States of America. The president made his position quite clear to the prime minister and the prime minister called the president last night to let the president know that he would be dropping that tax, which is a big victory for our tech companies and our American workers here at home. And Catherine, like what kind of reaction have we seen to Mark Carney backtracking on the tax so

quickly? I know that not everyone was a fan here either. Yeah, certainly the reaction has been mixed. It's funny, Elaine, because these negotiations have been underway. And of course, the stakes are so high for Canada. But we've known so little about what's going on. And suddenly we get this window with the digital services tax which while as you say it's this is something that's been in the works for a long time it's not something most Canadians have thought about and suddenly this is the little piece of perspective we're getting on this deal so Mark Gurney has come out and defended the decision to rescind the tax he said. It's part of a bigger negotiation it's something that we expected in the broader sense

that would be part of a final deal. We're making progress towards a final deal. There's more to be done to be clear. As I just said, it's a question of timing in terms of the date for the final negotiations and when the tax was coming into effect. And it doesn't make sense to collect tax from people and then

remit them back. So it provides some certainty. And as I just said, Some folks have said, though, listen, if you were going to drop something like this, it was going to bring in billions of dollars to government coppers. Shouldn't you get something out of it? For instance, convincing the US to drop steel and aluminum tariffs. We don't actually know whether there was some sort of quid pro quo. Neither side has said, but if there was, it's not obvious to most people. And in terms of like real detractors, Pierre Poliev is out there saying, listen, this sounds like elbows down. It's worth noting that even in Canada, there were folks who didn't like the digital services tax. People like the Canadian Chamber of Commerce called the tax

discriminatory and damaging. And they said it was going to drive up prices for consumers. They worried that it would lead to more tension in the trade agreement. But again, the Canadian government had said this was about fairness. This was about getting Facebook and Meta and all these big companies to not just be profiting off Canadians information, but providing money to the Canadian government if they were going to do that. Mark Carney has really campaigned as, you know, the guy who's willing to be tough on Trump, you know, telling Trump that Canada is not for sale ever and, you know, elbows up, right? And have his actions as Prime Minister, you know, match that tough talk. It's such an interesting question because this was so central to his election campaign, right?

It was the way he was going to deal with the United States. And certainly the conservatives have been very quick to say, you know, the flattery, for instance, he has offered Donald Trump and certainly this concession do not match with elbows up. Mr. President, welcome to Canada. Thank you very much. It's a great honor. Happy birthday, a few days short. A little bit.

A few days short, but didn't have a chance to see you on the day. Happy birthday to the US military. Again, we don't really know what's going on inside these trade talks. We know that Carney seems to publicly, to some extent, have charmed Donald Trump. That's what we saw on the White House visit,

but then you only have to think back to the weekend. Donald Trump saying, people don't realize Canada is very nasty to deal with. I think at the end of the day, the judgment here from Canadians about whether Mark Carney really is living up to elbows up is probably going to come when we find out whether or not we get a deal with Donald Trump. The deadline we're looking at now is July 21st. The 21st, yeah. Yeah. So is there a deal? And if there is a deal, do Canadians feel like it's a good deal for them?

Mark Carney has said over and over he's only going to sign a deal if it's good for Canadians. So I think we're in this space right now where there are questions, but in terms of what the verdict is really going to be, it's TBD. One of the issues that Trump has really taken aim at is around Canada's supply management system, right, which, you know, controls the import of items like eggs, dairy, poultry, and the overall supply of those products to stabilize pricing. And really, it's meant to protect Canadian producers. And Trump has been just on and on about this for a long time. And what do you think, you know, Carney giving in on the DST might tell us about how he'd approach

supply management? I mean, I guess it leads us to wonder whether if he did, as the White House press secretary said, cave. If he caved here, would he cave on this? But I will say, I do think those two issues are pretty different politically. The digital services tax didn't come up much, if at all, during the last federal election. Supply management did. And again, it is sort of a jargony term, but Canadians are familiar with the milk and eggs on their breakfast table. This has very visceral implications for folks

and it's particularly politically potent in Quebec where there are a lot of dairy farmers. So Mark Carney said this was something he has vowed to protect. That said, when Justin Trudeau's government and Donald Trump's previous government came to a new trade deal, COSMA, there were some adjustments

to supply management. So it's conceivable those adjustments were ultimately pretty minor. It's also those sort of an interesting side story in all of this because Trump continues to rage about these tariffs that Canada can put on American producers if they try to sell some of their goods. He agreed to this stuff when Kuzma was negotiated. So he's angry about a deal that he signed off on. I do know that there is a bill that was just passed last month, C202, that forbids the use of supply management as a bargaining chip in trade negotiations, right? Yeah. And this is an initiative of the Bloc Québécois because as I said before, dairy

farmers is a very powerful voice in Quebec, but it passed the House of Commons unanimously. Now, I'm hosting Power and Politics this week and the U.S. ambassador told me, U.S. Ambassador to Canada told me on Monday, he does think that if Mark Carney really wanted to, he could, you know, there is some wiggle room there. I have a strong belief that if we negotiated a trade, that if the prime minister and the

president got to a trade agreement, okay, and for whatever reason it included something that parliament said you can't do that, that the prime minister probably could find a way to get parliament to do its will, just like the president today. He doesn't necessarily have to be bound by the will of parliament. I'm guessing the Canadian counterparts may feel differently about that. Indeed. Well, interestingly, the same day I had Mark Carney's Quebec lieutenant on the show, Stephen

Gilbo, and guess what? He says, yeah, not so much. So I do think like watch that space, supply management is a hot topic. If it's making Donald Trump hot under the collar, then it's, it's worth watching in these negotiations. But I think if there's any movement on this, um, if it's more than minor, that is going to be like a heck of a headline to come out of all of this. I certainly, I'm not a betting person, but if I was, I don't think I'd bet on supply

management being, you know, the thing that decides this. But goodness gracious, we should never make predictions around Donald Trump, so who knows. I was thinking about how, like, even if they do reach a deal, is there a scenario here where some US imposed tariffs actually get to stay, for example, especially if Ottawa runs out of bargaining chips. Well, and that's the way it's been with other countries. So on the one hand, you ask yourself, well, why should Canada be so different?

Now, Mark Carney keeps talking about this as an economic and security partnership. It's supposed to be a bigger picture. And we are different. We share a border with the US. Maybe there's a different case to be made. But again, like when we ask ourselves what the bar is here, will there still be some tariffs in place, but just a better situation than we're currently in? Watching Mark Kearney try to make a case to Canadians that that is the best we can hope

for, I think that would be a very interesting political moment. The liberals have been cagey about this. The Globe and Mail reported last week that some business leaders were being asked to what extent you know what would be a tolerable level of tariffs. I was talking to Dominic LeBlanc who's heavily involved in these negotiations with Mr. LeBlanc. He would not engage with that question at all. So we have to wait and see but I think it's a critical question. Welcome to the Dudes Club, a brotherhood supporting men's health and wellness. Established in the Vancouver downtown Eastside in 2010, the Dudes Club is a community-based

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Quiet night in on Friday. It's good to have a routine and it's good for your eyes too because with regular comprehensive eye exams at Specsavers, you'll know just how healthy they are. Visit Specsavers.ca to book your next eye exam. Eye exams provided by independent optometrists. So on the domestic front, Prime Minister Carney's really been moving very fast. The government announced the removal of all remaining federal exceptions to interprovincial trade barriers on Canada Day. He made some big promises during the campaign to get things done

in these first couple of months. And can you walk me through some of those accomplishments? couple of months and can you walk me through some of those accomplishments? He did put in place a tax cut that took effect on Canada Day on the lowest income bracket. He hasn't actually passed the legislation to go along with it but the point is that the money will flow. I think his biggest challenge so far has been getting past this legislation that I know you've talked about on the program before about national interest projects, right? To sort of get moving on some of these big new infrastructure projects, be it electricity grid, be it the contentious subject of a pipeline, critical minerals, you name it, and dramatically changing military spending, ramping that up.

Certainly that's been a signature, I would say, of these first couple months. Mm-hmm, mm-hmm. Is there, you know, there were a number of things that were promised to get done by Canada Day. Is there anything off of that list that still kind of is up in the air? Yeah, for sure. Certainly when it comes to military spending, it's true Mark Carney just had a meeting with some European counterparts and said, yes, Canada, Europe, closer together on military spending, you know, you buy more stuff from us, we're closer to you folks.

But fundamentally, what came out of that meeting was basically a framework for getting things going with Europe. He had promised something concrete by Canada Day, so folks can make up their own mind about whether he met that bar, but there's more work to do there for sure. The one other pledge that he made, something he wanted to get done by Canada Day, was a review of federal departments' assistant cut red tape.

That's actually just getting started now, and it's certainly not gonna be done by Canada Day. And when it comes to inter-provincial trade barriers, which has somehow become this very hot topic, it's fascinating, it's been burbling in Canadian politics for literally decades. I was at the Canada Day celebration in Ottawa and that was like one of the biggest applause lines for the Prime Minister. It blows my mind that people are so into this. Together we will break down barriers so that you can buy Canadian anywhere and you can

work in Canada everywhere. The pledge there was just to deal with the federal part of it. And the federal government would acknowledge most of the work on inter-provincial trade barriers. It's inter-provincial. The provinces have to do the work. So there's work to do there. The provinces have a big role to play.

Indeed. And so, you know, that's not all his work. Christie Freeland, who's in charge of this file, is going to have a meeting with provincial counterparts to talk about it. But there's work to do there, even if the bulk of it isn't federal, to like actually get to the good stuff, to get the work done, to get more of this stuff moving. That's going to come down to the provinces. You mentioned kind of ramping up military spending in that vein.

Carney's also joined the NATO pledge to increase defense spending to 5% of the GDP by 2035. This would cost the country around $150 billion a year. And what has he said about how he plans to pay for the increase defense spending? Yeah, or fundamentally have us pay for it. It is a fascinating question here. I think it's clear that it's not gonna be

like a straight line upwards. He's talking about backloading a lot of this money. And I do just wanna put it into context for people because I think it's easy to get lost in the numbers here. $150 billion, we know that's a lot of money. What are we talking about? Well, right now, if you looked at the amount of money that the federal government transfers to

the provinces for healthcare. So that's all the federal money that goes to the provinces for healthcare. You have to multiply that by three to get to about $150 billion. So this like, think about what a shift in mindset this is for this country spending, um, you know, it is 10 years out, I acknowledge, but spending

so much more on the military than we ever have before. Mark Kearney's pitch is we're not going to do it all right away. It's essentially going to be to some extent backloaded, but there are questions about the, where the money's going to come from, what the sacrifices are.

He is talking about how more defense industry in this country is going to grow the economy. There's also, as we talked about his national, projects, growing the economy there, but it isn't all just gonna fall from the sky or come from growth in the economy. At some point, there are gonna have to be choices made. He sort of alluded to questions about the role of just what the federal government can do by the time those 10 years are up. I will also though though, point out that it's very far in the future. Elaine, the Liberals have been in power for quite some time. I am curious who will be running the country

when those decisions about spending at that remarkable level are made and whether those questions are up to Mark Carney or not. I want to talk a little bit about the reaction to these big moves and big commitments, right? We talked a bit about Bill C-5 earlier. That has obviously drawn widespread pushback from indigenous groups for giving the government power to essentially bypass federal laws for certain projects that are designated as nation-building projects. There's also the border bill, which critics have said give the authorities unchecked powers. And how has Carney handled these criticisms? I think by and large, it is by standing his ground.

If you look at the nation building projects, for instance, he has said, consultation, cooperation, engagement, participation are at the heart of this bill, C5, that is how we build our nation. Being a reliable partner to indigenous peoples is not just about upholding the duty to consult. It's about enabling the creation of long-term wealth and prosperity for Indigenous peoples through full equity ownership. That said, he did, after the law passed at the House of Commons, announced that he was going to do more consultation.

He's going to have meetings now with Indigenous stakeholders over the summer. It's too late for them to change the law that's passed, but an opportunity to hear them out and have a say. So I think that does point to the fact that there's some awareness about the criticisms there. Border Bill, interesting to watch because it hasn't passed yet. And this is not something he campaigned on compared to C5, these new powers for police. It's a less progressive parliament right now, right?

The House of Commons, the NDP and the block, they take up less space. A big, big chunk of that seating chart is either red or blue. So it may not be that hard to do politically to actually get this this border bill passed because it seems like the kind of things we would think the conservatives would be on side with. But I think it's going to be interesting to see how much pushback there is from civil liberties groups and whether the government is willing to take a step back because this wasn't a cornerstone of what they ran on, or whether they just think this is part of like, you know, making things happen quickly

in this country and dealing with things that are overdue, which is what police services have argued when it comes to access to people's data. Katharine, do you think that Carney's like handling on these issues tell us something so far, like about just the kind of leader that he is, that he's showing us to be? There are some kind of real CEO vibes here, right? Like bringing that business sector ethos to a lot of what he's doing in government. Yeah, I mean, I think we would say he's pretty decisive and he is trying to make things move

quickly. He is still building his team. Some of the key staffers around him are actually really only going to come into their roles next week. So I think there are questions about like, he's driving a lot of this with all due respect to the people around him who've helped him through these past few weeks. Like he's driving a lot of this from his own mind. He had this vision and he is trying to make it a reality now. He needs the machinery of government to be able to pull this stuff off. And he needs, you know, the team to execute it as well.

The Globe and Mail reported recently, citing liberal insiders, that, you know, Carney is ready to dismiss any high-level bureaucrats that don't meet his expectations. Can you walk me through a bit of what people have been saying kind of in the Ottawa bubble, I guess, like of like how he's being described, you know? Yeah, I mean, I think people understand that as a boss, he can be a bit of a tough customer, not someone who shouts, but someone who doesn't suffer fools. That's an explanation, a description that comes up a lot. If you are not prepared, you hear that he is going to let you know. You know you're briefing him and he's asking you questions, you don't have the answers.

I already know that. You need to learn your brief a little bit better. There's even this idea that there's a kind of an unspoken dress code at the Prime Minister's office. Now he wants people briefing him. A professionalism, right? Like, where's your suit? You know, perhaps like that t-shirt is not going to fly. What color are your shoes, gentlemen? Speaks to this level of professionalism.

And you have to think about where some of these folks are coming from, right? Which is Justin Trudeau, like the big hugger, the guy who got very emotional. So I just think tonally, this shift is quite dramatic to be fair. Canadians made it pretty clear they were tired of the old tone. But the other thing I will say is, Carney, from everything we hear, really likes to get into the weeds on policy, right? That like, you know, know your brief, having specific questions he wants answered, reading documents that are sort of like deeper down the food chain than you would expect him to get. And so demanding all of that from the staff around him as well. Mm hmm. Carney's promise to like bring in like outsiders to reach these big goals that he's

had, that he has. One of them is Michael Sabia, the former chief executive of Hydro-Québec, who's now going to be the clerk of the Privy Council office. And, you know, he's someone who's moved pretty fluidly between the private sector and the government. There is quite a bit of, like, speculation about how he might, like, really light a fire under the federal public service. And, like, what are you hearing about Michael Sabia and what he's been brought to do, brought in to do here? Yeah, we, I mean, he, again, he is somebody who does have some government experience, although a lot of corporate experience. So again, it speaks to this like CEO of Canada

bringing in a bit more of a pro-market view of things. Michael Sabia is talked about as somebody who is unorthodox, relentless. Is he a disrupter? Is he somebody who is just too corporate? It's not actually that long ago that he was a part of government. He was part of the civil service under Christia Freeland, Deputy Minister of Finance between I think 2020 and 2023. And he wound up leaving. So I think we will see, it does seem to speak to this deep focus on results that Mark Carney is trying to institute, to what extent that works within the civil service, which is, you know, the government is a big machine. The clerk of the Privy Council's office is kind of like the conductor of a very enormous orchestra.

So can he get all these, you know, cross-government instruments playing the tune he wants because it might sound a little bit different than the tune they're used to. Catherine, just switching gears here for a bit. So Pierre Parleau, the temporarily exiled conservative leader, will finally have his chance to regain a seat in the House in a by-election for the Alberta riding of Battle River Crowfoot foot that's coming up on August 18th. It's really expected to be a cakewalk for him. But you know, this is also a guy who really rose to prominence as like a ferocious opposition leader. And how is him like not having a seat, you know, being absent from question period? How's that all playing out right now? We're not hearing as much from him,

I think has been a big piece of this. And that's particularly when Carney is in this sort of like honeymoon period, I think with the public, you do see some polls suggesting a pretty big gulf in public opinion from Poliev's popularity to Carney's. I think to me, what is the most interesting is what does it meant for the conservative caucus to not have the actual leader of the party there. You hear MPs speak in their minds on

a variety of issues, things perhaps the conservatives would have kept a bit more buttoned up before, whether it's views on immigration issues or vaccine policy, things like that. And fewer slogans, less rhyming. There's less rhyming on Parliament Hill, less, you know, axe the tax, stop the crime. Piyarpolyev loves, like he loves language and trying to make language as potent as possible. And it did mean that there were a lot of sort of catchy slogans.

We're not hearing those nearly as much. I am very interested to see, again, whether we're just in this sort of like, is it an interregnum if it's Piyarpolyev to Piyarpolyev? I don't know. But this interim, this liminal period, is sort of like, is it an interregnum? If it's pure Poliev to pure Poliev, I don't know. But this interim, this liminal period, busting at the dictionary here, um, you know, does it stick?

Presuming he comes back in the fall. I was watching this interview that Poliev did with the hubs, Sean Spear, and he really frames the campaign as one of. Great gains, a couple million more votes, two and a half million to be precise, and about 25 more seats. But not everyone in the party feels that way.

There was a caucus meeting on this issue back in May where there was talk of campaign errors made by Palyaev and his campaign director, Jenny Byrne. And Catherine, from the people that you are speaking to, is there a sense that any genuine accountability has happened, given the election's outcome? Yeah, it's so interesting, right? Because, I mean, there's a truth to what he's saying.

Like, they really did gain some ground. But the question of lessons learned from this, to me, is so interesting. Normally, when you don't win an election, there's a real postmortem, not just a meeting, but somebody is tasked with looking into what the party could have done better so that they don't make the same mistakes again.

No one appears to have been formally tasked with this, except Pierre Poliev from everything I've heard, is calling around people. That's what he's doing right now. You know, he's sitting there and watching, I guess, CPAC and missing the House of Commons, maybe CBC News Network, who knows, and missing the House of Commons

when it was still up and running. But he's calling folks. He's talking about how great the last election went, asking for a little bit of advice. But the challenge is, it is awkward if the leader is the one saying, what did we do wrong? Because, you know, people don't necessarily get all that much face time with the leader. Maybe they want to make a good impression. Maybe they're a bit nervous. Maybe they don't want to be critical

of him to his face. It's been suggested to me, this is not the best way to figure out how to make things run better. But is that really what Pierre Polyev wants or is what Pierre Polyev wants right now to consolidate his leadership? He's got a leadership review coming up at a party convention in January. He's got this by-election. Maybe he does not want to stir up some of the more negative sentiment or maybe he feels that the lessons are best learned if he is making these calls. Obviously, lots to watch out for, still. Catherine, thank you so much for your time today.

Thank you. That's all for today. I'm Aline Chow. Thanks for listening to Front Burner.