The Current - Canada won’t meet U.S. ‘in the middle’ on tariffs: finance minister

Episode Date: March 5, 2025

Federal Finance Minister Dominic LeBlanc says Ottawa isn’t interested in meeting the U.S. “in the middle” on tariffs — as suggested by one U.S. official — and that Canada just wants the tariffs removed. LeBlanc talks to Matt Galloway about how his government is fighting the trade war started by Donald Trump’s administration, and why he thinks trying to understand the president’s rationale can amount to “negative energy.”

What do you see when you look around? Lively cities, growing neighborhoods, things that connect us. For those into skilled trades, it's a world they helped create. Discover more than 300 careers, paid apprenticeships, and the unmatched feeling of saying, I made that. Learn more at Canada.ca slash skilled trades. A message from the government of Canada. This is a CBC podcast. Hello, I'm Matt Galloway and this is the current podcast. It is day two of our new economic relationship with the United States. US President Donald Trump's

25% tariffs on nearly all Canadian goods were met with counter tariffs on 30 billion dollars worth of U.S. goods. The president talked up his tariffs in a speech to Congress last night. But negotiations between leaders are apparently ongoing. Here is U.S. Commerce Secretary Howard Lutnick speaking yesterday. Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they'll do better. And the president's listening because you know he's very, very fair and very reasonable. So I think he's going to work something out with them. It's not going to be a pause, none of that pause stuff,

but I think he's going to figure out you do more and I'll meet you in the middle some way. And we're going to probably be announcing that tomorrow. Joining me now is Canada's finance minister, Dominic LeBlanc. He's in our Montreal studio. Minister LeBlanc, good morning. Good morning, Matt.

Good to have you back on the program. You have been- Thanks for inviting me. You've been communicating with the US Commerce Secretary, Howard Lecknick. What did you tell him? I have been. I've been in touch with him since the original,

the first time I met him at that Mar-a-Lago dinner after President Trump's election before the inauguration. I saw him again between Christmas and New Year's at Mar-a-Lago. When he moved to Washington, we have continued to see one another. I saw him in Washington a couple of weeks ago and obviously spoke to him over the weekend. When I spoke to him this week, obviously expressed surprise that the president had made this decision to go ahead with these punitive tariffs at a time and at a moment where we believed, based on discussions that my colleague, for example, David McGinty and senior RCMP leaders had last week, that the border and fentanyl issues were largely on a trajectory that met the expectations of the United States and are certainly in Canada's interest to strengthen our border and to fight against

illegal fentanyl. So we finished last week quite confident that the border measures were effective and working and that we had been able to demonstrate that to the Americans. And then President Trump made on Monday the decision to proceed with implementing these tariffs. So my conversations with Howard Lutnick yesterday, I spoke with him a couple of times, were, okay, Howard, now that we're into this very sort of corrosive economic circumstance between the two countries that won't benefit the economy of the United States and certainly isn't going

to be pleasant or easy for Canadians, what are the next steps? Like how can we see a circumstance where we return to respecting the free trade agreement that President Trump had signed seven, eight years ago? So our objective, Matt, is to ensure that the provisions of the free trade agreement, which clearly aren't respected since the president's decision on Tuesday, return to being the state of play between the two economies. So what are those next steps? There are conflicting reports this morning. The Wall Street Journal is suggesting that there could be a deal to roll back some of these tariffs. The New York Times

says the tariffs are still going to be in place. You heard Howard Letnick say that maybe we'll meet in the middle. What does meeting in the middle look like? So I, again, that's not my conversations with Howard. That wasn't a phrase that he was using. I saw what he said on Fox News too. We're not interested in meeting in the middle and having some reduced tariff. We, Canada, wants the tariffs removed.

And do you think there's the possibility for that? Eventually, Matt, of course, because this is hurting the American economy and American consumers. And as you noted, the stock markets have reacted that way. The cost of living in the United States is going to go up. It's an untenable circumstance for them. And while we're in this circumstance, it's certainly not helpful for the Canadian economy.

So, eventually, we will, of course, we believe, get to a position where common sense and joint economic prosperity returns to being the priority. How long we're in this circumstance, honest to God, I don't know. It's speculating with this American administration or trying to imagine the reasons why X, Y, or Z is happening. In my view, it's a sort of negative energy. My focus is on, the immediate focus for our government is protecting the Canadian economy and protecting Canadian businesses and workers.

So, now that the tariffs came on, our response has to be firm and significant. It's going to ratchet up in three weeks again, as was the plan. But at the same time, if the Americans want to talk to us in a constructive way about how we could lift the tariffs, remove them, and get back to building an economy that works for both countries, we can do both at the same time. But our hope is this lasts for the shortest period of time possible but if if I could figure out what that was I probably wouldn't be in your studio in Montreal I'd be putting all the chips on something in Vegas and spinning the wheel so. Can I ask you about that

response yesterday it was forceful and significant and angry not just from the Prime Minister but others do you think the Americans expected that? Do you think the Americans thought we would just roll over? No. I think the Americans, and I've asked myself that question too in my conversations with Secretary Lutnick, but I also spoke on Monday with Secretary Besant, Scott Besant, the Treasury Secretary for about an hour, particularly on China and other issues. They knew that we would, because we were very clear, we would respond forcefully with retaliatory tariffs that would escalate quickly, $125 billion of imports into Canada.

We were considering non-tariff measures that could also cause some considerable distress economically in the United States. So they knew that. I think what surprised them, Matt, was the emotional reaction, the clips that you played just before our conversation began. But they're representative of what people say to me at the Dieppe Farmers Market in Moncton on a Saturday morning a few days ago, and people at the airport, and our families. The level of emotional reaction, the frustration, the insult, and frankly the anger that people feel that this is being done to their most reliable partner, and economic and security

partner. One doesn't do this to somebody who has been friendly and constructive and supportive over decades. And in the face of this, Canadians are going to go into the corner with their elbows up. Exactly. And I think that part, I mean, I think it started the first time when people booed the American national anthem at a hockey game that first weekend. I know that that surprised a lot of leaders in this administration. Obviously booing a national anthem is a complicated thing to do.

It's the raw emotion, as you say. Elbows up. Why are you doing this to us? Why are you doing this to your own population? That's not our problem. That's their problem to explain. It's the American government that can explain that. But I think we have to be realistic with Canadians.

As we plow through this, it's not going to be easy for Canadian businesses, for workers, for—you know, when you're going through severe turbulence, you don't take your seatbelt off and run up and down the door of the, run up and down the aisle and kick down the cockpit door. But it's still unpleasant. We've all been sitting in planes where it gets really nasty and you see the thing bouncing around and you look at the wings and they seem to be like flapping out. Like it's not pleasant and you have a pit in your stomach.

You're nervous about this and that's what business people and Canadians are feeling now. So our job is to protect them and reassure them but at the same time make sure this unacceptable circumstance lasts for the absolute minimum possible amount of time. As you said, this is going to be difficult. The belief is that if these continue, the Canadian economy will be pushed into a recession. There are concerns that auto plants could cease production within a week or 10 days. People are worried about what's going on. Pierre Pauli, I've had a news conference

yesterday. He pointed to the doors of the House of Commons behind him saying the Parliament needs to be recalled to deal with this threat, that this is an existential threat not just to the Canadian economy but perhaps even beyond that. Is that going to happen? Will parliamentarians be able to come together to debate this moment and debate Canada's response? I took note of what Mr. Pauly have said. I've been an opposition MP for nine years too. You point to that door for every minute that people aren't sitting there and you tell Canadians that it's just shocking

that parliament isn't meeting. But the reality is parliament isn't meeting. It's paroked. It is and the reality is parliament isn't meeting, it's paroked. It is and the reality is the government has all of the authorities it needs to defend the Canadian economy, to support Canadian workers, to retaliate against this unfair tariff threat from the United States. So the government continues to have all of the tools necessary to do what a responsible government would do to defend the Canadian economy and

respond to this American economic action. I think people also know that within a few days we'll have a new prime minister designate. On Sunday we'll know who's going to be the next prime minister when the liberal leadership is announced. And that person will on Monday have the option of deciding how he or she wants to proceed over the next few weeks. So I understand what Mr. Poliev said. I think that that's a decision that he could discuss with the next Prime Minister and we'll

know who he or she is in a few days. Matthew Feeney Even if these tariffs are rolled back, if there is some sort of agreement that is reached on whatever this is about over the next couple of days, it feels like something has changed. And we heard that from Canadians at the beginning of our conversation. Is the United States still a partner that we can rely on? I hope so. I agree with you.

Do you believe so, though? Look, I'm not a psychiatrist and it's not helpful with this administration in the US to predict what six months or six weeks will look like. But I do think that the confidence of Canadians is shaken in terms of the reliability on that partnership. So you're right. If you go through sort of a traumatic moment like this where your partner does something that's so counterproductive, it doesn't go away because, okay, good news,

we've reached an agreement, the tariffs are rolled back. I think people will understandably wonder, okay, is some version of this going to come back? And it's also corrosive for investment decisions, Matt. Canadian businesses looking at investing, expanding, this kind of uncertainty that they've created now, I think we have to be honest, isn't particularly constructive for the economic confidence that people need to have in Canada's economy. So I worry about that as the finance minister.

But at the end of the day, the relationship economically and in terms of security, national security, heard your introductory comments about the Five Eyes partnership, for example, I was public safety minister, I saw how effective that is. These relationships go through more than one person or half a dozen people, and they exist for literally decades. And yet there is an audience of one, it feels like, in this conversation. The Prime Minister spoke directly to him, called him Donald, didn't call him the President.

It feels like everything is focused on the whims or the interests of that one individual. It does, and certainly if you look at the amount of public attention and media attention that President Trump occupies not only in his own country, but in ours and in other media. Think about the impact. Look at European television. You're right. There's a relentless focus on what he said today and what he's going to say tomorrow

and what does this mean. At one point, it can become negative energy. Our job is to, if we spend our day looking at every news conference or scrum media availability he does in the Oval Office, we won't be doing the work that we need to do to figure out the best way for these tariffs to come off as quickly as possible. But for as long as they're on, what can we do to support businesses and workers in Canada? I was very reassured by the two-hour call we had with all of the premiers yesterday. The Prime Minister had every, all 13 territorial and provincial premiers.

There also is a unity there and a sense of common purpose from Premier Smith of Alberta to Andrew Furey, my buddy from Newfoundland and Labrador, who's going to be on your program in a few minutes. Like literally, everybody has a sense that we're in this together. We have to use every instrument that governments, plural, all orders of government have. And in so doing, maybe we'll limit the scarring on the Canadian economy. We're going to go to your buddy, Andrew Fury, right now. Dominic LeBlanc, it's good to have you back on the program. Thank you.

Thanks, Matt. Say hi to Premier Fury. Have a great day. Dominic LeBlanc is Canada's Minister of Finance. He was in our Montreal studio. What do you see when you look around? Lively cities, growing neighbourhoods, things that connect us.

For those in the skilled trades, it's a world they helped create. Discover more than 300 careers, paid apprenticeships, and the unmatched feeling of saying, I made that. Learn more at Canada.ca slash skilled trades. A message from the Government of Canada. than anyone thought possible, with less than anyone could imagine. But it's time to imagine what we can do with more. Join Scarborough Health Network and together, we can turn grit into greatness. Donate at lovescarborough.ca. Andrew Fury is the Premier of Newfoundland and Labrador.

Premier, good morning to you. Morning, Matt, how are you? I'm well, thanks. What do you make of what Minister Blanc said about the negotiations such as they are with Washington and the possibility, I mean, again, it depends on who you believe, but the possibility that these tariffs could be rolled back, perhaps

meet the United States in the middle, that this isn't the finished article. Yeah, I think what we saw yesterday, it just confirms the uncertain nature of these negotiations. I mean, you had Secretary Lutnick moments after the President addressed the nation confirming his belief in tariffs and the importance of tariffs to right the wrongs of ills from Mexico and Canada and minutes later you had Secretary Lutnick say well we're not sure. So you know it confirms that it is an uncertain situation.

It confirms that it is a chaotic situation and it demands that Canadians be calm, cool, collective and strategic in the response. And I believe Minister LeBlanc, my buddy from New Brunswick has done a great job in trying to negotiate which in a very unstable environment. It was only days ago, Secretary Lutnick was saying maybe it won't be the full 25% yet, it was 10%. And to pick up on something that you said, Matt, in the previous interview, the problem is that we're dealing

with an erratic, irrational actor who has ill-conceived theories of economics and is a constituency of one. So one of the lessons I learned as a premier in DC was we can do all the advocacy we want, we can do all the education we want, but the reality is the decision making occurs in what has to be a very unusual space of the president's head. In the meantime, there will be an effect and you can feel the wake already from this decision. How much of an impact is this going to have in

the economy of Newfoundland and Labrador? People are worried across this country. People are certainly worried across the country and it's no different in New Finland and Labrador. We will see an immediate impact on our fishery. It's a sensitive time of the year as fish harvesters, plant workers, processors all get ready to start the season. This is the negotiating time for prices.

So there is that level of uncertainty in an acute and often tense environment, which is not helpful. But people in Newfoundland and Labrador are ready to stand strong and proud, united with every Canadian from coast to coast to coast, because we recognize that this is not just an economic attack, this is an attack on Canada, the country of Canada, the people of Canada, not just the economy of Canada. But the Federation of Labour in Newfoundland and Labrador has called for income support and job protection in light of these tariffs.

To your point, that people are worried that they're going to lose their jobs, they're not going to be able to keep the lights on at home. So how will you plan to support workers who might be affected by this? Can you already start to think about that or to assuage the concerns that people have? Yeah you already start to think about that or? Of course.

To assuage the concerns that people have. Yeah, we've been thinking about that for some time and was happy to hear some of the instruments that Minister LeBlanc has been proposing at the national level because this is a national crisis and there are levers and mechanisms that exist at the national level that aren't available to sub-national economies or sub-national decision makers.

What is most significant in what you heard yesterday in that first minister's conversation? Well, I heard that there was, for me, the most significant thing was that there was contemplation for uncertainty moving forward. And what I heard was, well, they are using existing instruments like unemployment insurance, the EDC, BDC to allow access to capital and liquidity. I also heard that there was significant real contemplation for potential future programs, meaning that, you know, the provinces may have more of an acute ability to respond,

but the federal government would be there to help in the medium term, should that be required. What do you think this is about? This goes back to your comments earlier about trying to figure out what's going on in the mind of Donald Trump. You've been very pointed in some of your comments. You said, I mean, you call him a maniac. You said that he's cracked in some ways.

You said that he makes decisions one day that are not accurate the next day. What is, what is this really about do you think? It's been my belief from day one that he was never joking about the 51st state. Right now, you have a president of the United States who has no checks and no balances. He's already shown a contempt for the courts. He is the executive and he has the power of the legislature. So,

there's no check and balance that exists within the United States for the president's power. He has absolute power right now. And I believe given the fact that he's not even accountable to the electorate, that he has an imperialistic, a territorial based expansive agenda. And he looks to Canada or as you heard last night, to Greenland with a significant hunger and appetite. And so he's using the economic instrument to cause chaos and uncertainty

in the economic climate in Canada to create an uncertainty that he thinks perhaps could allow for expansion and annexing of the country of Canada. And now that sounds crazy to say out loud, but if you look at his pattern of behavior, whether it's in business or in the political sphere, this is how he acts. I know that Canadians will meet this moment and have the resolve

and the courage to resist any economic force. There's going to be carnage from that though, right? There is going to be carnage, but we can't in the pursuit of resolving this acute economic situation allow for the erosion of the sharp edges of the maple leaf because our values, our Canadian values, who we are is under a direct attack and assault. And make no mistake about it, that is what the president is interested in. And I think for many of your listeners and for many people around the world, when they hear things like annexation and loss of sovereignty, they think about tanks and aircraft carriers and aircraft. Usually how that works historically is

it's economic circumstances that dictate dilution or relinquishing sovereignty. And Newfoundland and Labrador is a great example. And you know, we gave up our own sovereignty 75 years ago to join Canada. There was no tanks on Duckworth street. There was no aircraft carriers in St. John's Harbor. Premier Will. That's what I'm afraid of. We'll have to leave it there.

It's good to speak with you as ever. Thank you very much. Thanks, Matt. Andrew Fury, Premier of Newfoundland and Labrador, your thoughts on this welcome. What are you thinking about? What does this mean for your grocery bill? What about for your mortgage?

There are a lot of mortgages that are coming up for renewal this year. What about for your savings, perhaps for travel and money that you might be thinking about spending? What are you thinking about now when it comes to your personal finances, as we talk broadly about these tariffs, we would love to hear your questions that we will put to experts and you can send them to us. The email address is thecurrentatcbc.ca, thecurrentatcbc.ca, and we will talk further about that tomorrow

on this program.