The Ben Mulroney Show - Could a DOGE work in Canada to clean up wasteful government spending?

Episode Date: April 9, 2025

Guests and Topics: -With Trump’s auto tariffs outstripping the sector’s profit margins, prepare for a continent wide industry shutdown with Guest: Flavio Volpe, president of the Automotive Parts Manufacturers Association -Could a DOGE work in Canada to clean up wasteful government spending? with Guest: Vass Bednar, Executive Director of the Master of Public Policy Program at McMaster University, and co-author of The Big Fix: How Companies Capture Markets and Harm Canadians If you enjoyed the podcast, tell a friend! For more of the Ben Mulroney Show, subscribe to the podcast! https://globalnews.ca/national/program/the-ben-mulroney-show Follow Ben on Twitter/X at https://x.com/BenMulroney Enjoy Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Wednesday edition of the Ben Mulroney Show. Thank you for joining us on the KORUS Talk Network. Thank you for enjoying us at your leisure and convenience in podcasts. For more, you may be streaming us on the iHeartRadio app. Wherever and however you find the Ben Mulroney Show, we say thank you, welcome to the party. Donald Trump's tariffs, we all know,

are and will continue to have negative global impacts and effects. If I were to sit here and pontificate about how bad it's going to be for the automotive industry, you would rightly say, Ben, give us some details. And what's your resume to be able to say those things? Well, I'm not going to have to say them. Instead, I'm going to bring on somebody who has the resume, who has the knowledge, and who's written a very important piece in the Toronto Star entitled with Trump's auto tariffs

outstripping the sector's profit margins prepare for a continent wide industry shutdown. Please welcome to the show the president of the automotive parts manufacturers association, Flavio Volpe. Flavio, welcome. Welcome back to the show. Thanks for having me on, Ben. We're about to talk about math, which is inescapable in a business like this. In any business, it's all about how much money you can make for the product at the cost that

you make it for, right? The profit margin, right? So talk to us about the math and why the math doesn't math and it's going to cause it's going to break the system. Yeah, I wrote a piece. Thank you. I wrote a piece in the Star yesterday that said, look, if the average car in the US sold last year for $48,000 and about half of the cars

that are sold in the US are imported and the president of the United States put a 25% tariff on those cars, then those cars are going to cost $60,000. Are American consumers going to pay that? That's a big question. Who's the first customer though? It's the dealers. All these car companies, they import to a dealer.

That's an independent business. And do the dealers have to buy them outright or do they have to pay if they sell the car? No, no, they're not on consignment. They buy them. So the dealers make 4%. And so dealers are, how many cars are you gonna take where you're nine and $10,000 underwater? Yeah.

First question. The other half of the cars that are sold in the US were made in the US last year, 10 million, 10.6 million cars. Donald Trump has put a tariff on all auto parts going into a US production. Well, every single car that's made in the US, if we assume that they're USNCA compliant,

which says if 75% of the cars come from the US, Canada, or Mexico, they're still tariff free, well, people forget that the other 25% comes from a couple of dozen other countries. All of that $12,000 worth of car is now has a 25% tariff. So now cars made in the US are $3,000 more expensive. And then on the 50% or so

that would come from Canada or Mexico, they're about to get 25% more expensive on May the 3rd. So now you have a scenario in the US where 16 million cars get sold a year. If they're made in the US, they're, you know, $9,000 more expensive. They get imported, they're 12,000. Who's going to pay that? Yeah. Yeah. So, okay. So, so, so what is your conclusion? Like what, take this train to the logical conclusion? Take this train to the logical conclusion. Sure. The answer is nobody.

So on the extra parts cost, the car companies have to pay that. It doesn't go to an auto zone counter. You know, your engine in your F-150 comes from Windsor. So the company that makes that will have to pay that. Or they're going to try to pass it off to the suppliers. If you try to pass it to a supplier that makes 6% a year on average, you try to pass on a 25% tariff, they'll tell you you're going to bankrupt me, so I'm not going to do it. Okay.

And you can't make all the cars without all the parts. What we saw when the Ambassador Bridge was blockaded for a week in 2022,s from Michigan couldn't get in and parts from Ontario couldn't get in. And we saw automotive production shut from Ontario to Kentucky. Okay, so yeah, so Flavio, I want to keep the conversation going. So let's, so I have to assume you've got more numbers

that may paint an even more dire picture. But what does this mean practically for the industry in Canada? There are companies that are much better off that have been able to, over the years, really manage to do a lot of build where you sell and source where you build. Companies like Toyota that are exemplary,

that could and are planned to be able to ride this out a lot longer than others. Then you'll see companies that have been stalwart partners of Canada, like Stellantis, the Dodge and Chrysler products that gets made in Brampton and Windsor. They're part of an international conglomerate that has to share the pain. Unfortunately, some of that pain falls on Canada. Those plants in Brampton and Windsor are already shut. Okay and what does that mean? So what does that mean for Brampton and Windsor? I have to assume that the because you've got you've got this plant a lot of people are employed there there are other industries that depend on that plant being open. So what does it mean for the health of the cities themselves? Thousands of people in those plants, you know, 3000 people or so in each of those plants, plus

12,000 or so that work for suppliers that can't deliver to parts, the cars that aren't getting made. And all of those logistics companies, the restaurant, the gas station outside of those plants, those people who aren't working, who aren't buying other stuff locally, that the the hit of the economy is their domino. Did you have a sense of like a number that we could expect just from the just from this crisis? In terms of in terms of unemployment? Well, look, if everything shuts down in in automotive, you're

talking about hundreds of 1000s of people in Ontario, we can avoid that. But the date that everybody should look at is if the White House puts tariffs on all the parts, like it says on May the 3rd, then you'll start to see dominoes. Some of the bigger, better managed companies will ride it out for a little longer than the others. But I think there's a few that won't make it to that date. Flavia Volpe, you've been very active since Donald Trump leveled this threat in the first place, working with politicians and working with business leaders

and stakeholders and community leaders, union leaders, you've gone to both sides of the border, you've been on TV on both sides of the border. How do you feel today, knowing that like you and your colleagues put a full court press on in an attempt to stave this off and here it is? Do you feel like you wasted your time? No, I feel like if we didn't put mass into the equation and if we don't keep doing it, If we didn't put mass into the equation and if we don't keep doing it, we may not get to that May 3rd date. But what I see some hope is I'm watching Republican senators stand up, not because they like Canada, but because they understand that declaring a phony national emergency with Canada or an economic emergency with Canada put tariffs on Earth's Americans.

And there was a motion last week that passed. It was symbolic, but four Republican senators walked over. Well, there's another one coming. Yeah. And we're starting to see Americans who don't need to care about you or I, Ben, or anybody that you're listening to, but they care about the people in their states

who are gonna pay more for everything. We're just talking about cars, they're gonna pay more for everything. Yeah. Say, the most senseless thing the White House is doing who are going to pay more for everything. We're just talking about cars, we're gonna pay more for everything. Say, the most senseless thing the White House is doing is picking on Canada. I talked to staff or members in every single district in the US that's in the auto business,

including dozens of senators, and all we said to them was, I'm not negotiating on behalf of Canada, the government does that. I'm telling you the mass of the auto investment in your state, some of those, the 170 Canadian auto parts plants in 26 states, those are gonna go down if you don't stand up. Yeah.

What did you make of Pierre Poliev's idea to act the GST on Canadian made cars? You announced it last week, but we haven't had a chance to hear from you on it. I thought it was very useful. And I said so. It is the, we all have to think about scenario B. What happens if Donald Trump doesn't pull back?

Well, there are five car companies operating in this country and they have a capacity to make two million cars a year and Canadians buy 2 million cars a year. Anything that helps to get those companies to look at matching the Canadian demand as a relief to being blocked for export is good. Yeah. Flavio Volpe, before I let you go, I just want to say, you know, there's all this talk about saving the CBC and injecting more money in the CBC that without them, we don't have a country. They are nation building. I reject that. And I look at the people who work on the line, who build those cars, who support the towns and the cities that they work in and all of the other businesses that come together that form the automotive industry in this country. That, to me,

is true nation building. And the people who will be affected have my complete support. And I think they are lucky to have a staunch advocate and communicator like you. As the tip of the sword. I wish you the very best. That was Flavio Volpe, president of the automotive parts manufacturers association. Welcome back to the Ben Mulroney show. Thank you so much for joining us. There is a certain amount of theater involved in what we see down in the United States with the Department of Government Efficiency. There's always a

grand theatrics when they uncover what they feel is government waste and how much money is being sent to all points for all so many reasons, and how much money is being saved, and how much red tape is being cut, and on and on and on. If you take the theatrics aside though, I think you'll find a lot of Canadians who will agree with the statement that government is probably not as efficient as it can be,

and government in Canada probably costs more than it should for what we get out of it. And so if people agree on those points, then they should naturally agree with the idea that maybe we should have something like Doge in Canada after the next election. I'm joined now by Vas Bednar, Executive Director of the Master of Public Policy Program

at McMaster's University and co-author of The Big Fix, How Companies Capture Markets. Vas, thank you so much. Oh, and harm Canadians. I'm sorry, I missed the last part. Vass, welcome to the show. Thanks for having me. So there is a piece in the walrus entitled are a handful of wealthy tech bros bringing Doge to Canada. And again, I'm not

I'm not a, I'm not a supporter specifically of Doge. But I do like to know that if there are inefficiencies and if there are costs that can be cut without harming Canadians, I'd like to look into that. What are your thoughts? Oh, yeah. The titling of that essay is a little bit, can be rage inducing, right? It's a little bit, it's a little bit silly, a little bit snarky. I do think there's a lot of alignment, as you said, you know, how can we make the

government work better, right? Yeah. Where can we find either streamlining opportunities, but also like what digital public infrastructure can we build that we own so that we have to outsource less and elements like that. I think those are key elements of building. And what we're seeing in the US, it's not just that Department of Government efficiency. I think it's a pretty big shift in power, right? This elevation of the richest tech leaders who are sort of substituting or inserting themselves

in major policy decisions that don't seem to be building the USA up, but seem to be really dismantling the role of government eroding and causing chaos. So, you know, in Canada, could we do a better version? For sure. You know, better is always possible. But I think those overtones or maybe undertones about whose voices get privileged is is what I was actually trying to get at in the essay and maybe distracted by using the D word. I know some people see red when they see things like that. Anything that comes out of the United States is can be triggering to a

certain type of person. And I take that point. I'm not I'm not looking to do that. I'm actually I'm looking for a best practice. So let's talk about it. Let's talk about what could be a better version of Doge in terms of, you know, we're putting a lot into the system, how can we make sure that the outputs are of greater value to Canadians? You know, I think one challenge bringing that mindset, and there's been some great pieces on this written by Sean Spear at The Hub and Jennifer Robson, who's a professor at Carleton. She wrote up kind of a response on Medium. So they're really owning, I think, this conversation in a really thoughtful way. I'm really just echoing both of them, is the interconnectedness of government spending. So

sometimes we have conversations that sort of say things like, and I reacted to this online a few weeks ago in my little social media bubble, but basically it was being presented as like, oh, well, we should spend more money on jets. So why do we have this program for poor kids to get lunch at school? Just take that money and kind of move it over there. And government is so complex and responsible for so many things that are hard to kind of hold in our minds at once. Oh, yeah, Vass, I remember growing up and when my dad's government would make a decision, it would then be turned

into, well, had they instead of doing that, we could have opened X amount of hospital beds, or we could have spent on the X, Y, and Z. And it isn't as simple as that. That's a very, that's a politically effective message to target the policy initiative, but it's not necessarily, it can't be proven out in real life. Yeah. And I didn't mean to lecture you. No, no, no, no, no, no, no.

Those inter complexities, but it's sort of like, when we treat public budgeting like a household budget, there are limitations, right? Of course, a household budget is most tangible and kind of there to us. So, you know, going forward, no matter who forms government, do I expect there's going to be more of a refreshing conversation around the size of our government, where we're focusing a kind of recalibration and some of those opportunities. Absolutely. And I mean, we're also not just in this tariff war, but struggling through a productivity crisis, which I think might accelerate or give us more hustle to eliminate in those instances where we truly just have old,

stinky regulations that don't make sense anymore, that were designed for a totally different economy are holding back our best entrepreneurs. Yes, we need to look at that really carefully, and we need to move quickly to reduce those barriers. We may also have legislative uncertainty for really cool things. As an aside, but as an example, we don't have a pathway for cell based meat in this country yet. Okay, this is like somewhat silly to bring up. It's really interesting genomics, but we can recreate meat that people can eat from cells, you know, in a lab lab based meat kind of fascinating.

I did an interview with somebody I believe worked at a university in Ontario about about awesome about what they were the advances that they were they were making on that. It's incredible. It's incredible. It's great for the environment. It's great for affordability, all this stuff, right? You know, disease, these huge weather shocks we're seeing. But actually, we are actually seeing some entrepreneurs in this space leave Canada, or switched to

making animal food, because we don't have a way to get it to we are actually seeing some entrepreneurs in this space leave Canada or switch to making animal food because we don't have a way to get it to the marketplace fast enough because we don't have a regulatory pathway. So those are also conversations about how we can build Canada up and kind of the pathways we need to build. And I think sometimes we frame it as like, what can we erase or kind of draw a line through, but it's also like, what do we need to do so that we can get cool stuff happening and commercializing it out of universities? So essentially, I think what we're saying is

we would look at a Canadian version of the Department of Government Efficiency as a broader tool, not just a cost-cutting machine going in there and just line item by line item deleting them and saying they were useless and we're not we don't have them anymore but rather it may maybe it needs to be made up a broad-based task force that has you know tech entrepreneurs as well as union leaders as well as you know I mean you name them put them all together almost like a think tank that could go through the government and ask serious questions good faith questions about how union leaders as well as you name them, put them all together, almost like a think tank

that could go through the government and ask serious questions, good faith questions about how it operates and how they could make it work better. Yeah, I think you'd have to do that in some sort of partnership with public servants to write like anything that's evocative of what's happening in the US, which is really, again, something that seems quite destructive, oppositional to the state, locking people out of their computers, firing them, the uncertainty and upside downness. That's like not the Canadian way. We got to do some peace order and good governance here. And of course, any new government coming in is going to have new spending priorities that

recalibrates public budgeting again and again and again. But I think another element of this conversation is, you know, if we're not going to tinker with the tax system in terms of that modest capital gains increase that was teased or blindsided so many people by the Liberal government last year, then we're not, we're not boosting the state coffers a little bit, right? We don't have a little bit more to work with. So that I think accelerates more of the austerity measure that sort of says, okay, we have to work more effectively with what we have and also keep building up the state so that there's more value and more productivity and more economic growth in Canada because that's so good for everyone. And also we're reducing our immigration, right? And we've long relied on immigration as a way to

solve for certain jobs and also grow our GDP by growing our economy. So look, there's lots there. And at the end of the day, what I appreciate and admire kind of the most here is that we have what I appreciate and admire kind of the most here is that we have voices that might have been quieter or kind of more heads down, right, from Canada's tech sector, getting excited about public policy. Like that's actually really cool. It's no mean feat. And I hope it can keep going after the election and we can find better and more effective ways to make sure that those voices feel more included, more appropriately consulted, and part of putting your fingerprints

on building up Canada. That's Bednar, thank you so much. It's been a fascinating conversation. I hope we continue it after the election because I think this is a good idea. How it devils in the details, how it's put into practice is a whole other thing. So we'll talk soon, but thank you so much. You got it.

Bye bye bye. There's no limit to how far criminals will go to cover their tracks, but investigators will go even further to uncover the truth. I'm Nancy Hicks, a senior crime reporter for Global News. This season on Crime Beat, I'll take you from the crime scene to the courtroom and inside some of Canada's most high-profile cases and some you've likely never heard of before. Search for and listen to Crime Beat on Spotify, Apple Podcasts, Amazon Music, and wherever you find your favorite podcasts.