The Ben Mulroney Show - The future of our economy looks bleak

Episode Date: April 17, 2025

Guests and Topics: -The future of our economy looks bleak with Guest: Dr. Eric Kam, Economics Professor at Toronto Metropolitan University 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

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It feels like a Friday. Okay, it's not, but it should be roll off on Friday. So let's be happy about that, Alex Pearson. In for Mr. Ben Mulrooney, and I get to do it this week because Ben does this conversation once a week, and I look at it and I go, why can't I talk to Eric Kam? And so I get to talk to Eric Kam, because Ben does this conversation once a week, and I look at it and go, why can't I talk to Eric Kam? And so I get to talk to Eric Kam, and that makes me happy. How you doing?

I'm doing very well. This is a pleasure, Alex. Absolutely. So, you know, of course, Dr. Eric Kam is in economics of economics over at the Toronto Metropolitan University. I want to get your thoughts on what the Bank of Canada did or did not do yesterday. And look, didn't get a lot of attention. But do you read anything into the fact that the

key interest rates were held steady? Yeah, yeah, I do. I mean, obviously, it's a holding pattern on the part of the bank. So I think what they're doing is they're saying for at least the next 90 days, Trump has kind of put a pin in the whole tariff thing. So let's stop looking internationally for a half a second. Let's look nationally. And we have to go back to the fact that our economy is stagnant and stale and not growing. And unfortunately, people don't want to learn, but liberals be liberals.

And they only have one method of growth Alex they don't want to look at any supply side growth or any productivity growth or technology growth they think the way to grow an economy is to keep money cheap so that people will keep spending. So really what you saw yesterday is a doubling down on that philosophy but I have to say I'm glad they didn't lower it again. I mean, look, they could lower it to zero if they wanted to, but doing that does nothing toward any type of sustained growth and you'll just put ourselves into an inflationary spiral. So I actually

thought yesterday's move on the part of the bank wasn't a bad one. Which is good because Tiff Macklem has had a few doozies. Yeah, Tiff Macklem has had a few doozies, but I got to tell you the truth. Tiff Macklem is a very smart man. And if you locked me in a room and said you've got to pick one person, the current Liberal leader or the current Bank of Canada governor, and listen to one of them, I would choose Dr. Macklem every day of the week. Isn't that interesting? Yeah, there you go. And that was a part of the debate, certainly. And I'll be interested to hear if it comes up in the English debate. And certainly,

Poliev could score points off of this because he's pointed out, Mr. Carney, you didn't even get the inflation call right. You got it wrong. And he also did that with Tiff Macklem, where he said, you're going to be wrong on inflation because it's going up and you're not prepared. So we'll see if he can chip away at that. Any surprises for you? I mean, I can't say I'm surprised because we don't really get costed platforms

and I'm not sure they mean much anymore. Does it bother you that we're getting all these promises? 500 billion here, 200 billion there? Yeah, I mean, it's nonsensical at some point. They don't get costed out. They don't give people real numbers. And we've almost come to expect and somehow say that that's OK.

So given that, if you sort of abstract from the fact that we're not going to get truth about fiscal realities, then all you can do are look at the plans of the two parties and say, does either of these parties' theories on the economy resonate more than the other? Look, I'm out of the closet on this issue. Everybody knows I'm voting conservative because I think that they have a better economic outlook than the Liberals. And why do I say that? Do I see anything in the Conservative plan

that so blows me away as an economist? Not really, I see a couple things I like, but nothing that bulls me over. What I see with the Liberals is second verse, same as the first. And if you like where we are nine and a half years later, then maybe this is your party, I hate where we are. I don't like that our economy has ground to a halt and the government absolutely will

not address that. And don't think for a second that chopping interest rates is going to do anything about that. That one trick pony died a long time ago, Alex. Yeah, no question about it. I think things are going to be very, very tough for a long time. I mean, the one battle is just winning the election, right? But whomever wins, Carney or Poliev, a stupid big mess to clean up. But I do think it's interesting, you know, when you hear Mark Carney talk, it's difficult to understand what he is actually saying. For the everyday person, it's almost impossible.

It's like, what the hell is he saying? And I don't know if he's doing that so he can kind of say, hey, look, I was a bank of Canada, England, governor, whatever. But he talks about things like two budgets said the word catalyze a lot. He loves the word catalyze. I'm like average Joe and Jane. They don't know what the word catalyze means. Right. So it's a matter of like, does he want to connect with the voters or is he trying

to just sound smarter than everyone? You know, I'm really glad you brought this up. And this is not a commercial for me because to be blunt, I have tenure, I'm a full professor and I can't really go anywhere from here. My goal as an economist is today what it was 25 years ago. I wanted to bring economics to everybody. I hate the fact that Carney and people like Carney and I

know lots of them want people to believe that economics is for the educated few and that is such a load of baloney. I hate it and every time Carney speaks about the economy I think I'm at another boring conference listening to another boring paper. It doesn't have to be like that. There can just be, as I hope I do, and my friend Moish Lander does on the station, straight talk about economics. This causes this, this causes that, with the caveat that we do not operate in a laboratory like physics. Our lab is the real world and sometimes not everything goes according to plan. But it just irritates the hell out of me

that when Carney talks, I hear another arrogant economics professor and I hate it. Oh, but the ladies, the older liberal ladies, they love it. They're all catalyzed. Oh, did you hear what he said? It's catalyzed, right? And I'm like, you know, he could just say cause, right? Cause is a much better word.

You know, Alex, no joke, I do this with my class all the time. I taught, one of the things I do on my first lecture is I say, if you're here to learn about convex combinations, you're in the wrong place because I'm never going to call it that. I'm going to call it what it is. It is a line. That is all. And, and you see, it's just, it's, it's this language.

It's just trying to sound smart, trying to sound smarter than the average person when you're not, none of us are. And it's just, yeah, I mean, you bring up a really good point and I don't wanna go off on a tangent here, but just listening to Carney talk is like, you know, it's like everything I hate about academia. Yeah, well, again, Polly, I'm trying to get a couple of shots off of that.

Like England wasn't too happy with you either, but at some point I have to think someone in the media I think we should take a few shots off of that. Like England wasn't too happy with you either, but at some point I have to think someone in the media will read the book values that he wrote back in 2021. I do want to ask you about, because this is a very important thing. It should have happened decades ago. Again, the liberals promised to do it in 2017.

And here we are in this crisis with Trump and we're getting inter-provincial trade barriers finally in the news. But this is something Doug Ford brought in and talked about yesterday, loosening these internal trade barriers and on alcohol, labour, mobility. This is not a small thing. We tariff ourselves and we have allowed this for decades and I don't know why. And you know what you should really do is take out the word tariff, put in the word tax, and then it really sounds bad.

We have taxed ourselves for generations and generations. You know, Donald Trump deserves credit for one thing. He's caused a lot of countries, especially small open economies like Canada, to put a big fat mirror in front of our country and go take a look, do you like what you see? And I think this in the long run is really going to help us. The fact that we haven't been able to trade east, west for far too long has cost us billions of dollars. People like to say, you know, oh, Russia came looking for LNG and we turned them away at

the door. You know what? Ontario turns away Manitoba, Manitoba turns away Saskatchewan. I mean if we really want to take trade seriously and any capitalist economy that doesn't is doomed to fail, then yes let's start looking east to west. Let's pull down all, it should be completely free trade. I actually did the like last night when the leader of the bloc said Canada isn't one economy, it's 13 economies. No, no, no, no. It's one economy, 13 different provinces. We can make it one economy

if you people would start working together. It actually isn't that hard. No, and I did that point was not missed by me, but to dumb it down, it's $6,000 every year for every person in this country in savings if we just got rid of that. That's how stupid it is. That's right. And you know what? That's the problem. I mean, the inefficient... Listen, one day you and I can sit on the radio, we can talk about all of the inefficiencies

that we can find in our government and especially in our economy since that's the one little thing I can talk on. But yeah, talk about... I mean, we can't even get trade right in our own country. So maybe Trump has done us a small favor. And if we can just tear down some of these inefficiencies and not be so reliant on other countries, then it's been a minor positive in a, in a, in a very turbulent time. Well, leave it there. I have run out of time.

I hope to do it again. Always love chatting with you. Alex, you're the best. Stay healthy. You're the best. Thank you so much, Dr. Eric Kam over at Toronto Metropolitan University. I want to talk about a story that is not going to be popular with, well, the taxpayers.

It shouldn't be. This has to do with an investigation by the New York Times revealing that that Austrian-based luxury spa company, Thurm, you know, the company we keep hearing about that's going to take over Ontario Place. Well, they allege it misrepresented itself, misleading the Ford government in order to get a very secure and lucrative, century-long near deal in Toronto. And so just to bring you up to speed, if you haven't really been focused on this story, the New York Times reporting that Thurm, this company based in Romania, they alleged they falsely portrayed themselves as an industry leader, that they operated six other

luxury spas when in fact it was actually only one and it was in Romania. And the Times suggesting that it was, you know, mimicking what another European spa complex was doing with the same name and logo, yet they were somehow different companies. And then, you know, once the New York Times decided to dig into the corporate filings, they found all sorts of information like Thurm was not an industry player, that at the time they were losing money when they pitched the province of Ontario. Yet somehow they secured this deal with the Premier, who keeps talking about how fantastic

this all is, and because of that, Thurm has been able to attract a whole bunch more of investment from other countries with new projects, including one in Germany. Doug Ford was asked about this, and here was his response to the information.

When I heard this allegation, I went directly to the minister and and to the deputy and said here look into this I just want to double and triple check the contract and make sure everything passes a smell test. Yeah well again I think you do that before you sign on the dotted line I mean again I think it's important to raise in December theitor General had stated that the Ford government's contracting process in this was not fair or transparent or even accountable to the participants, with some developers like Thurm being given access to an infrastructure Ontario executive. Let us bring in Matina

Steffes. Gridniff is a Canadian bureau chief over at the New York Times. She is one of those who was digging into this story because that's what it took to get it to the surface. Thanks so much for joining us. Thanks for having me, Alex. Your response to Mr. Ford suggesting that, you know, he's just got to check it, just check once, twice, three times. And I'm thinking you should have probably done that before. But how is it that you guys found the problems before the Premier? Well, I mean, to be very honest with you,

we just looked and we read the Auditor General's report very, very closely. A lot of breadcrumbs are in the Auditor General's report. Some of the leads that we followed have also been in the Canadian press previously. So frankly, I would love to present myself as a genius investigator, but really we just took time and took the Auditor General's report really seriously. And we did a lot of reporting here in Canada, but also in Europe.

Yeah. And the bottom line is, this is something, and you can speak to it, this is in your mind something that the minister in charge, or at least one of the players involved should have been able to see, because when we're talking about this deal to build this spa, which as you know,

was quite controversial when it was announced. It kind of came out of nowhere during a municipal election that some spa was going to come in, we're going to get this water park and everyone's like, what, huh, what? Okay, it doesn't make a lot of sense. But Doug Ford and his government were adamant that this is what the people wanted. So you would think with this much profile on the company that that they would have done all their due diligence. Sure. Well, look, listen look listen Alex I'm an international correspondent based here recently arrived and so you know colleagues over

at Queens Park will be much better suited to answer exactly who is technically politically and so on responsible for this. My understanding is that this process was run by Infrastructure Ontario. We did address them with questions that did not provide detailed answers to our questions. They just gave us, you know, a general statement. And honestly, my understanding of the process from well before I arrived in 2019 onwards is that this has been a saga, that the bidding was also of course disrupted by the pandemic, that there were competitive bids. We did speak to competitive bidders who requested anonymity

because they have signed a non-disclosure agreement. They said that they had not been permitted to discuss their plans. And so we thought that was interesting. So again, in our reporting and following up on the auditor general's report, which is freely available online, a lot of these irregularities existed and have been sort of percolating in the public domain

for several years before we picked this up. Who's responsible for it, I think, is something that we're gonna have to figure out. Although from listening to Premier Ford yesterday, you know, when a triple check and the smell test and so on, the Auditor General said it didn't pass the smell test. The Auditor General said that the process was not fair, that it was not transparent.

They found multiple irregularities. When those trip into the territory of, you know, you need to like actually review and call for an investigation, I think that's politics. Well, yeah, it's always politics. And as you know, in this business, there's just not enough journalists anymore to be able to do the amount of work that we need to do

because there's just so much news. So this one fell under the radar because it was put into a report and it was just kind of, I guess, as you say, percolating, but it had been buried and we had so much news going on at the time. Having said that, these things do tend to come to the surface and the allegation, I mean at the very basic of what we're talking about, the allegation against Thurman, they say look we've done nothing wrong,

is that they essentially big themselves up and almost used this Ontario Place model as if they can get that one sold, they can get then other business brought on. Would that be fair? Right. Alex, I think what, you know, I would really urge and I'm so appreciative of you having me on your show. I would urge people to read our story. It's very detailed and we put a lot of attention into every word

of the 1800 words. I know it's a long time. You can also listen to it on our website. But what I do want to say is that what we found was a weaving of a narrative. This is not unusual in this space of mega real estate. What is unusual here is that this is a public sector deal. Right. Ontarian taxpayers' money is going towards supporting this project and therefore there's a lot more scrutiny. The bar is simply higher when you're doing business with the public sector rather than the private sector. So what we did find is that the company sort of in the public discourse, in the narrative, weaved itself in with the larger, older, successful, more famous, multiple-star-owning German company

of the same name. I want to be clear, because I've seen a lot of this online, and I do want to set the record straight. This happened with the full knowledge of the German company. The Germans told us, oh, yes, we have a knowledge sharing agreement. We asked, is there any corporate link?

Have you contracted the smaller firm to run your spas for you? No. Is there a financial transaction services? No. We went through the German, the Austrian, and the Romanian corporate registries, financial disclosures in Romanian and in German languages. I'm talking about nearly 1,000 pages going back several years.

These are separate entities. And so whether with the consent of the Germans, the smaller firm that's now here in Ontario sort of big itself up, this is something that happens, real estate to fake it till you make it company. What we're asking is whether, you know, we're just putting this information out for the public

to debate with political leaders, whether this is what the province should be doing. I don't have an opinion on this. You know, we're just trying to bring this information to light. All right, I got less than 30 seconds. Is there more to the story? Sounds like a stupid question, because I...

I mean, what we put in our story is what we can stand up right now. That's all I could say. All right, well, great work. Very much appreciate it, and we'll see what the politics is as it comes falling out. Thank you so much. Thank you, Alex.

Have a good day. There you go, that's Martina Stavis, a grid nef, and she is with the New York Times. She's the Canada Bureau Chief on this. And so the story is out. There are clearly a lot of smoke around this one. And again, the question is, why does the premier have to smell once, twice, three of something that stunk a long time ago?

He's got to explain this. There's a lot of money. The question is, did we get gouged? And who knew what when? There can only be one winner. Tune in to Renovation Resort every Sunday and look for the code word during the show. Then enter at homenetwork.ca watch and win for your chance to win big. Amazing! The small details are the difference between winning and losing. Watch and win with Renovation Resort on Home Network.