The Ben Mulroney Show - Should Mark Carney slowplay a deal with Donald Trump until pressure of the midterms?

Episode Date: May 9, 2025

Guests and Topics: -Should Mark Carney slowplay a deal with Donald Trump until pressure of the midterms? with Guest: Ian Lee, Associate Professor At Carleton University At The Sprott School Of Business 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

I've just been to Specsavers and upgraded my lenses to extra thin and light with 50% off. Now, what else can I upgrade? My cat? Meow! Pfft! Pfft! Pfft! Wow!

My scooter? Pfft! Pfft! Pfft! Pfft! Pfft! Pfft! Oh yeah!

Get 50% off lens upgrades in the Specsavers Spring Sale. Hey, I can upgrade my kids! You chill, Mom. I'll load the dishwasher. Awesome! Exclusions apply. See Spec my kids. You chill mom. I'll load the dishwasher. Awesome. Exclusions apply. See spec savers.ca for details. Offer ends soon. In the next few minutes, we really want to spend some time focusing on the Canada US relationship and how it may translate into improved economics and economic situation north of the border or not, we don't know.

Here is a little bit of audio, an update from the governor of the Bank of Canada, Tiff Macklem, talking about what the impact of a prolonged trade war would be on the Canadian economy. In the near term, the unpredictability of US trade policy could cause further market volatility and strains on liquidity. In an extreme case, market volatility could turn into market dysfunction. In the

medium term, a prolonged global trade war would have severe economic consequences. It would reduce growth and increase unemployment. This could in turn have important ramifications for the financial system. With debt still at high levels, some households and businesses may be unable to keep up with payments. If loan losses occur on a large enough scale, banks could cut back on lending in response. This would exacerbate the economic downturn and put more pressure on businesses and households. Well, that sounds super.

Here to talk about it with us is Ian Lee, the associate professor at Carleton University at the Sprott School of Business. Ian, welcome to the show. Thanks very much for inviting me, Ben. That sounds that sounds chilling. What Tiff Macklem just said. It is it is for a bunch of reasons. First off, we're about 1 12th the size of the US. All this talk about elbows up as if we're the same size in a hockey game as the other player.

We are $2.3 trillion. They're $30 trillion. They're so enormously larger than we are. The idea that we're equal, that we can stand up and, you know, beat the billy bully and defeat them is just beyond delusional. It truly is delusional. The Bank of Kent has said so not only yesterday but in past speeches in the last 90 days that we have an asymmetric relationship, just a fancy word for saying they're big and we're

small, and we're small, and we're going to get hit much harder from any tariffs whether they be initiated by Trump or retaliatory on our side. So what I've concluded, as you know, because we've talked about this before, I don't believe that trying to quote, stand up to the bully and elbows up and let's put a retaliatory tariffs on Canadians to whack Donald Trump, I don't think that's the way to go that's just gonna cause more suffering and a greater faster decline in our standard of living so you know I'd love to have before we move on to a question I have for you I want I saw that you wrote a really great piece on the hub CA said the Trump

Carney standoff and why Canada must face hard truths on trade. So a couple of questions for you. What are those hard truths and how quickly must we face them? Yeah, well the second question first I think we have to face them like how about the budget or the the fault sorry the speech for the throne. The Globe said this today I wrote that article two days ago and then the Globes piece today I mean I'm not kidding you, I thought oh my goodness, I could have authored the Globe piece because they're saying something very, very similar. But I'm not trying to say that to legitimize it, I'm just simply saying we have very, very tough decisions. Okay, we got to do it right away. What are they? Well first off, all of

our parties unfortunately are still clean to this idea that we can support for example the blind management which protects eight thousand five hundred uh... dairy farmers mostly in eastern ontario where i grew up at the boy and in come back i'm more in come back to the strontium but doesn't matter the supply management i've written papers on this and other people have a exploit forty million canadians with prices that are approximately double for the milk and the dairy in the eggs. That's what supply management does, it's

protectionism to protect these 8,500 dairy farmers who, StatsCan says, are multi-millionaires, mostly because of the land value. And we know that this is number one of number one at the top of the list of what's driving Donald Trump crazy. And so we've got to look at those protected industries and say, are they protecting us? I've been arguing for years, by the way, just very quickly, that protectionism is an Orwellian term for exploitation. When you protect, what are you doing? Keeping out foreign competition, like the telecom industry.

So what do they do? Drive the prices up. That's what the classic oligopolist or monopolist does. Keep out the competition. Hey, I can stick it to you with price increases. So that's one thing we got to do. And secondly, Ben, I really want to get this out and I realize that people in southern Ontario especially are really not going to be happy. I think we have to at least start

to discuss that we may be losing the auto industry. The one thing he's been consistent on literally for 10 years is about the unfairness of the auto industry. Trump, the one thing he's been consistent on, literally for 10 years, is you know about the unfairness of the auto industry and Canada, you know, selling all those cars to the states and he has been, he has never wavered on that and he's also said I'm not backing down the 25% tariffs. Well, the CEOs of the auto industry and former Prime Minister Trudeau have said publicly that if the tariffs aren't lifted, the auto industry in Canada is doomed. Well, the auto industry tweeted, I think Stellantis and GM, I think came out together and we're going to talk about the UK-US trade deal in just a few minutes, but they were dismayed that he prioritized the selling of British-made cars in the US over American-made cars that may also have spent a little time in Canada.

And I also heard Flavio Volpe a few days ago from the Auto Parts Association say that, look, one of the unintended consequences for Donald Trump, and it's maybe not unintended, he just hasn't thought about it, is these are American companies. Even if GM has a plant in Canada it's an American company if that plant closes it affects the bottom line of an American company so who are you actually helping you're helping Kia and Toyota who happen to operate in the United States entirely but they are but they are Korean and Japanese car companies. Ben I'm with you completely I'm not advocating what he's doing. Okay, listen, I am not advocating at all what Trump is doing. What I'm saying is if he does proceed because

he sees us as low hanging fruit, why? Because we're right next door. I mean, our plants are 45, 60, 70 minutes away from the US border. Whereas UK is like thousands of kilometers across the ocean. And so I think he sees it as low hanging fruit to bring back those jobs and make more cars in the Rust Belt, which is his base. You know, Ohio and Illinois, these are people that voted for him. This is where the Trump's base is. But my point is, is that we've got to start, I believe, at least having a conversation of what is our plan B if we do end up losing the auto industry. And it has been in decline for years, by the way. We're not

producing the same number of cars we were ten years ago so it's been weak or weakening for years but we are not talking about any kind serious. No pivot. We don't have a pivot. And we got a pivot to resort this is what Australia did in the late 90s they exited autos and everyone said doom gloom they're gonna decline. Today Australia has higher average income per person than Canada. Oh boy. You know, I want to-

And they've put it into resources. I want to spend a last little bit of time with you on this US-UK trade deal, because I had David Frum on the show yesterday who said there is no deal, it's vapor, it's an agreement to eventually have a deal. Yeah, I agree with him in the sense that there had been no written text that I can find that has been tabled and said here is the clause by clause document.

So I agree it's more of an agreement to agree to do an agreement. And it's vaporware. It hasn't, they may produce such an agreement, but it hasn't materialized yet. He also made a point that we may as Canadians want to slow play a deal with Donald Trump until closure to the midterms where he's where he feels the pressure of the decisions he's made possibly then negotiating with him from a weaker position. There's a trade-off there and I understand the logic completely of what David Fromm is saying and it's very good logic. The problem is this and and i like it by the way but the problem is this that both tears kick in and i don't mean in six or twelve months but

but in thirty days and forty five days or whatever the offering is going to kick in right away it's going to be have havoc on southern ontario and it's not only the people directly employed because i know there's lots of people who think they will you know i don't work in the auto industry but there's such a multiplier and they have spin-off jobs you know and all the banks that deal with them and the and the rest runs in the shops and yeah yeah shop and so there's a huge multiplier there and it's going to be devastating and and so yes

we want to get the tears off the auto industry but we also i think that this is going to put pressure i hope hope, enormous pressure on the Prime Minister to take all of those destructive policies that restricted the development of resources imposed by the last government, like Evol and Volkanov and Trudeau, and not being partisan at all. And I don't consult with this individual until ever. I gotcha. Ian, we're going to have to leave it there, but thank you very much, my friend. Okay. Thanks very much, man. $1,500 in Nissan bonus or accessory credit, or choose three-year prepaid maintenance. Hurry into your local Nissan dealer today. $1,500 applies to Sentra and select Rogue models when leasing or financing through NCF. Conditions apply.

See Nissan.ca for details.