The Ben Mulroney Show - To Hike or Halt Bank of Canada Rates - with Bryan Borzykowski

Episode Date: October 2, 2026

In this segment from "The Ben Mulroney Show," Ben welcomes Bryan Borzykowski, an award-winning business journalist and founder and CEO of ALLCAPS Content. They discuss the warring opinions amongst economists regarding the need to hike or halt Bank of Canada rates. ALLCAPS Content If you enjoyed the podcast, tell a friend! For more of the Ben Mulroney Show, subscribe to the podcast! ⁠⁠⁠⁠⁠⁠⁠⁠https://link.chtbl.com/bms⁠⁠⁠⁠⁠⁠⁠⁠ Also, on youtube -- ⁠⁠⁠⁠⁠⁠⁠⁠https://www.youtube.com/@BenMulroneyShow⁠⁠⁠⁠⁠⁠⁠⁠ Follow Ben on Twitter/X at https://x.com/BenMulroney Insta: ⁠⁠⁠@benmulroneyshow⁠⁠⁠ Twitter: ⁠⁠⁠@benmulroneyshow⁠⁠⁠ TikTok: ⁠⁠⁠@benmulroneyshow⁠⁠⁠   Executive Producer:  Mike Drolet Reach out to Mike with story ideas or tips at [e-mail] Enjoy Learn more about your ad choices. Visit megaphone.fm/adchoices

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Standard messaging and data rates may apply. In communities across Canada, hourly Amazon employees can grow their skills and their paycheck by enrolling in free skills training programs for in-demand fields. Learn more at aboutamazon.ca. When two people look at the same event, they can see wildly different things. For example, when my friend Glenn watched the same hockey game that I watched, he left feeling despondent and depressed and worried that his team, the Toronto Maple Leafs, were in for a very, very long and disappointing season.

I looked at the same game and left elated and excited for the 3-2 victory of the Montreal Canadiens. that's supposed to happen in those events. But economic data, you would think it can be, I mean, it should be subject to less interpretation. And yet I got two headlines here about the Canadian economy that say two different things. So to make sense of it, we're joined by Brian Bozikowski. He's an award-winning business journalist and a founder and CEO of all caps content. Brian, welcome. Thanks for having me.

Okay, so one headline reads, Canada's resilient economy means Bank of Canada. needs to start hiking. And the other one says, soft economy should limit Bank of Canada's rate hikes. What's going on? Well, you can see how difficult it would be to be in the Bank of Canada right now and making these decisions. And thank God, I am not part of that because they have a very, they are. There's like, there's a lot going on now that is giving them pause, whether they should

raise rates or lower rates. There's two things happening here. The Canadian economy is actually doing better than people. thought. I mean, we thought by now we would be in dire straits. We'd, you know, see high unemployment that America would be kind of destroying us. Well, that's not actually happening. Our GDP is doing well in the second quarter. It progressed 3.3% annualized. There's an expectation that maybe it'll be around 2% at the end of the third quarter. That's, you know, not gangbuster growth, but that's a lot better than what the headwinds that we're facing. It's not bad. Right. So then on one hand, yeah, you say,

Well, maybe we should raise rates now so we can make sure the economy doesn't get too hot. Then there's the threat that actually new tariffs coming on, this trade war continuing, it's going to slow down our economy. So we need to be careful about raising rates and keep them low. But hold on, Brian, I got to ask, are we actually in a position? I mean, it's a good faith question. Like, are we in danger of our economy overheating because it is growing so fast? So I was thinking about this today and thinking that,

if we had a bit of an overheated economy today, maybe that's not such a bad thing, given the where we thought things would be. Yeah, I think a lot of us would welcome an overheating economy. I think you're probably right, especially the businesses that are worried about where things are going to go. A little bit of overheating is okay right now for them. But I guess the issue is if you don't get in front of this, inflation could rise, prices go up. We've been through this story before. We know that it is not great when it gets harder to pay. for food when it's harder to pay for goods.

So the Bank of Canada is in this position where if they could raise rates now before the economy maybe does get a little bit hotter, will that keep inflation lower? So that's what they're thinking. I think you're right. I think a lot of Canadians would welcome a little bit of a hotter economy. But the problem is if you

don't sort of get in front of it, it could get out of control. So is the Bank of Canada damned if they do, damned if they don't? Yeah, I think so. I think at this point it's very difficult for them to kind of make a decision. There's now more and more economists who think they are going to raise rates at their next meeting on October 28th. I sort of think maybe they should just wait and see.

I mean, they've said that they're going to wait and see. But if we see that inflation is, you know, gas prices are higher. So we're already seeing it there. The question is, we haven't quite seen it yet. Does inflated gas prices go through the entire supply chain and make everything more expensive? When that happens, then things can get out of control. So I think they're going to be watching that. To me, you know, I'm not an economist.

But it feels like maybe let's just wait and see where things are going to go because the tariff issue could get worse at any moment. Well, let's move and shift our regard to Europe because we had that big announcement that Canada was going to become, was seeking to become an associate member of the EU. Nobody really knew what that meant because that role doesn't exist. And we knew that on the calendar in just under a month is a big Canada EU summit in Montreal. Now, I know enough about how this stuff works. You don't go to the summit to work out details. The details are worked out long in advance.

So you can have the theater and the performance of a summit. And then you can announce at the end of that summit all the work that you did in the preceding weeks. I was surprised to learn that a lot of that work is already done because Politico got their hands on some documents detailing an expansive new partnership, ranging from breaking down digital trade barriers to joint support for Ukraine, investing in fighting wildfires. Europe's going to buy a whole bunch of our, of our firefighting airplanes or whatever they're called. There's going to be AI work. There's going to be, there's a whole lot of alignment

that's already being planned. I'm surprised they got to it that quickly. You know what? Me too in some ways because it's taken so long for us to start looking outside of the U.S. for partnerships that having this deal done faster or we'll see what happens on the summit, what they actually say. But at least they're talking.

and building relationships. Now, we have a free trade agreement with Europe. And so that's already been in place. Well, yeah. Well, they haven't. It's provisionally in place because there's a whole bunch of those governments that have not ratified it yet. But what I wanted to ask you is, for all intents and purposes,

it is in effect. But after it came into effect, it's not like the growth, the growth of trade exploded after that trade deal came into effect. So what really can happen moving forward if a free trade deal didn't create a boom? What are our hopes? What are our expectations in this deepening of integrations? Right. Well, to me, it sort of sounds like, you know, that the relationship is deepening.

Yes, you make these free trade agreements. You sort of say, okay, it's up to you businesses to go and pursue those and sell into different markets and businesses are going to choose to or they're going to not. But now there is this much more intention with sort of everything that's happening here. And so we're building this really much more of a stated relationship, deepening these ties, the free trade agreements there, which will support businesses who may now start realizing, hey, we need to go seek out other markets. And I think it's just the talk about this and then coming together is sort of telling the United States

and telling people in Canada and companies that's saying there are other markets open for business. we are deepening our relationships on defense, on supply chains, on critical minerals, and we're working on that. We're going to have a much more integrated relationship. And that might cause. And we're starting to see that. We're starting to see exports rise to the EU over the past year. And so I think there's more intention here.

There's a deeper relationship. It's not just, hey, we made this agreement. Now go for it. And look, there's a couple of things that generally speaking, people shouldn't really have a problem with. We will align strategies and standards, connect industries, focus our ambitions on sectors with the greatest returns for our people. This includes the development of low carbon, reliable energy from liquefied natural gas to hydro, solar, wind, and nuclear. And then Brussels is announcing Ottawa and Brussels will announce the joint purchase of 50 DeHavlin water bombers. That's always good for ready to be using Canada and Europe in 2030.

So, yeah, you're right. It feels like they are going to be doing their best to remove as much. any friction points for the most optimal relationships possible, right? So where do we want to see the growth? Okay, how can we then streamline the harmonization so that a Canadian company can find customers in Europe in these fields that matter to both of us? That's not a bad thing. No, it's not a bad thing.

But again, I don't want to rein on that parade there. But to put in perspective, the trade with EU is much, much, much, billions of dollars smaller than it is with the U.S. So this is great. But building a relationship with Europe, with other countries, to increase trade by a significant amount is going to take not just years. It could take decades. Yeah.

So it's great to do this. We still need the U.S. So most importantly, we need this trade deal to get done with the U.S. And there's always that fine line of, of course, you know, poking the bear here when you do stand up and make these announcements. And we'll have to see how Trump reacts if that impacts a longer trade deal, a bigger trade deal with the U.S. Donald Trump doesn't like it when people make other friends and he's not invited to the party.

Brian, I appreciate you. Thank you very much for joining us. Thank you. They can't remember things that used to be second nature. Names. Dates. The conversation you had five minutes ago. And you can't find the right words to ask them about it.

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