The Munk Debates Podcast - Munk Dialogue with Andrew Coyne: The EU-US trade deal should serve as a warning to Canada and why supply management hurts the poorest Canadians

Episode Date: July 29, 2025

Rudyard and Andrew start the show assessing Trump's new trade deal with the EU: no relief on tariffs, carve outs that favour the US, and uncertainty for Europe down the road. Why did European Commission President Ursula von der Leyen agree to this deal? Why aren't all countries currently negotiating with the US working together to create a united front? And does the EU's deal provide a window into what Canada can expect from its own trade negotiations with the US? Trump is committed to tariffs and we need to accept this will be part of any future deal. And while we might not have yet seen the effects of tariffs on the price of consumer goods, we will soon as companies accept that this is a long term economic reality. Rudyard and Andrew then turn to supply management, a flawed policy issue that the Canadian government refuses to address. Why are we upholding a redistribution of wealth which benefits an affluent business community at the expense of the country's poor? Click here to purchase Andrew's new bestselling book, The Crisis of Canadian Democracy.Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

I think it is more than time that the rest of the Democratic world presented the United Front against Trump's America. I think they're hesitant to do that because they don't want to burn any bridges. There'll be a day after Trump. I understand that. But in the immediate situation, he's just able to pick people apart. Welcome to the Monk Dialogues. Rudyard Griffiths here, the chair of the Month Debates. It's a pleasure to be joined in studio again for one of our continuing conversations with Andrew Coyne, call-mist at the Globe of Mail and best-selling author.

now, Andrew, the crisis of Canadian democracy. I see it in the charts there. Clinging on. Must feel good. It's nice. It's nice to see it, getting a bit of a response. Yeah. So listeners, we will put a link to theindigo.ca website where you can buy Andrew's book in our show notes today. Andrew, I want to begin with the news over the weekend, this agreement, if you can call it, deal. You never know what these things are ultimately going to be or become between Europe and Trump, the Trump administration, on I think many people surprised that Europe settled for this so-called deal. It's punitive in a variety of different ways. There is no relief on tariffs.

There's a not insignificant flat tariff of 15%. Some carve-outs, but not a lot. Usually carve-outs that favor the United States and uncertainty that will continue to hang over the EU on pharmaceuticals and some agriculture, you know, two of their key industries. What do you think Europe did and why? I think it ducked. I think it saw no profit in continuing these discussions and remaining on Trump's radar. I think this was a calculation that they, you know, cut your losses. It's hard to call it any kind of deal. It's not binding on anybody.

The quote-unquote deal is Trump will impose a tariff, take it or leave it. It's 15%, which is less than he'd been threatening, so less than some notional tariff that never existed. much higher than the tariff before. And all Europe did in response was agreed to buy a bunch of American energy and invest a bunch in the American economy. Well, some of that they were going to be doing anyway. They would have been buying that energy anyway. Some of those investments would have been happening anyway.

Maybe some fraction of them, you know, they took a lower return on their investment than they otherwise would or they'll pay a higher rate of energy than they could have elsewhere. But it's probably only a fraction of that. So, you know, they didn't give that. much. They didn't get anything. They simply got Trump to hold his demands for now to 15%. It's farcical, of course, the whole thing. And what did Trump get in that? What's this big Trump win? He gets to slam his own consumers with a 15% tariff, which will hurt American consumers, hurt American productivity because it's protecting inefficient American industries. It's a political

thing entirely for him, or maybe in his case, a psychological thing, that he gets to prance around and say what a big winner he is. But again, it's not really a deal. It's just, you know, Trump doing what he was going to do anyway, and Europe trying to constrain him at the margins not to go further than he might have thought that was gone. What do you think of the optics of it? Ursula von der Leyen, the commissioner of the European community in Scotland at the Trump Golf Resort inside the Donald J. Trump ballroom to do this deal. I mean, it looked like a surrender. That's right.

In some ways it was. a low price surrender, but a surrender nevertheless. And certainly in terms of optics, as you say, I mean, it once again shows what happens if you let Trump play you off against each other. I mean, Europe is a big player unto itself, but if that's not enough, why aren't all these countries,

Europe and Japan, etc., working together, moving together, presenting a united front. I think it's a real mistake. It's one of those collective action problems or prisoners dilemma or something where it's hard to get people to work together if they think they can steal a march. I see people saying that Canada should cut some separate deal

where we'll go last and therefore we'll get a better deal than the other countries would. I'm not persuaded of that. I mean, we've got some reasons to think that we'll get off a little lighter because of geography, et cetera, but in the pre-existence of the Kuzma deal. But I would much rather see, and this isn't just on trade, but on defense,

on a whole range of issues. I think it is more than time that the rest of the democratic world presented the United Front against Trump's America. I think they're hesitant to do that because they don't want to burn any bridges. There'll be a day after Trump. I understand that. But in the immediate situation, he's just, he's able to pick people apart.

A bit of a pattern emerging here. In the last week, we had a deal with Indonesia that had its own shakedown in that case, 50-odd Boeing 777s. They also a flat tariff of 19%. Japan went next, an agreement, either a re-announcement of previous commitments or new commitments, we're not sure of half a trillion dollars of investment in the United States, and no surprise, a flat tariff of 15%. We now have Europe going, similar pattern. Big investment, 15% flat tariff. Is this a tell, a telegraph for what Canada may ultimately be asked for from or demanded of?

by this administration that there is a pattern and we're going to have to conform to it. And whether it's now in the sense that he tries to just obviate Kuzma and demands this of us come what it is, under Friday, August 1st, or whether we just acknowledge that Kuzma is over and that we will at some point in the near future face a universal tariff on Canadian goods with the types of exceptions that the Americans will want, just like with Europe. They'll pick a few things like energy, critical minerals. They'll take the tariffs off those, but we'll be paying tariffs on everything else. It's entirely possible.

Now, remember, there's a wild card here, is there's a court case, at least covering some of these tariffs, as to what extent he actually has the legal power to do it. He's basically invoked an emergency when there's not really any emergency, and the courts may take a dim view of that. So that will at least put some kind of a spoke in his wheels. But yeah, look, if one side of the other, particularly a powerful economy like the United States, is determined to put tariffs on, there's not a lot that other countries can do unless you want to get into a full-blown trade war, but with an irrational negotiating partner like Trump, the percentages are very different. In most trade negotiations and trade wars, both sides ultimately want to get to some kind of free trade-ish type. of arrangement. That's been the tradition for several decades. People will will snort and pause as if

they were protectionists, but it's with a aim towards getting the other side to lower their trade barriers and then you lower it, you lower yours. With Trump, that's not the case. He wants to end with the tariffs. He thinks the tariffs are good things because he thinks they're going to raise revenues, because he thinks they're going to close the trade deficit, which in many cases doesn't exist. I mean, it certainly isn't, shouldn't be an object of trade policy. and the revenues aren't probably going to be prove illusory. So it doesn't make any sense, but that's what he believes. And so it's a very different negotiation.

You would be more hesitant to get into a trade war with somebody like that because you've got no assurance that you're going to come to some rational conclusion at the end of it. Okay, everybody fires off their guns, and then everybody agrees to put their guns away. With Trump, you just can't be sure of that. So I have some sympathy with people who are negotiating with them from whatever country, who feel like, okay, let's just, you know, make this guy go away. I think they may be diluted if they think it will buy them anything more than short-term peace. I think, as I said earlier, I think they're wrong to be trying to cut a deal by themselves.

We need collective action on this. But I understand the dilemma that they're in. It's just not a normal negotiation. Andrew, if we play out that scenario, and look, it's one that I subscribe to, that Kuzma is dead, NAFTA is dead, there is no putting Humpty Dumpty back. back together again. Is there an argument, if you believe that, and some may not, but if you do, is there an argument that you're more cautious about making concessions on a whole bunch of things which have been thrown up as chaff by this president, some things I don't like, like supply

management, other things like the Golden Dome, you and I disagree on that, but I think we should take a hard pass. But regardless, you know where he wants to eventually get to, which is some form of universal tariff on Canadian goods. He wants to raise revenue from Canada permanently to fund American indebtedness and to try to stave off its looming fiscal crisis. So if that's your theory and your understanding, should we be a little bit careful, Andrew, about what we even allow onto the table at this point in the conversations? A hundred percent. You make concessions because you, in the expectation, you will get some concessions in return. What actual concessions is he offering other than I won't hit you quite as hard as I was thinking I was going to hit you, which we've no idea

is true or not, right? To some extent you're calling this, there's some value in calling his bluff. He has a constraint on him, at least to some extent. And again, he's unusual in this regard. He has some constraint on him in terms of American public opinion. And if you are putting on really heavy tariffs on consumers, it's going to come back to bite you politically. So he can't just put on any tariff he likes.

Now, again, he's unusual in that he doesn't seem to be caring that much about for whatever reason about whether or not they're going to win the midterms in 2026. I have my concerns about what that reason might be. But that, again, is an unusual aspect of it. But if he's going to do what he's going to do, then A, you wouldn't want to put on a lot of concessions. B, you make concessions in the expectation

that you'll get some kind of lasting piece out of it, some kind of lasting agreement. In Trump's case, you've got no assurance, no reason to believe that six months from now he won't invent some new grievance or he won't announce some new tariff in flagrant violation of the agreement you just signed. I think there's a lot to be said for just waiting this out, playing for time, knowing that he's going to be going further and further down the polls, getting into more and more trouble on various fronts,

Epstein, et cetera, there's something to be said for just keeping the ball in the air. So if you had to make a bet about what we're going to see on August 1st, what is it? Will we see Trump simply go ahead and level what an effect? would be a nothing burger, which would be 35% tariffs, yes, but it's only 10% of trade now is outside of Kuzma. So effectively, our current, I think, blended tariff rate is, you know, 3 to 4%, maybe it goes to 5%, 6 at the most. Another option, maybe a scarier option would be that the president has a bad reaction because we are seemingly at his whims right now. And he says, well, I'm disregarding Kizma and I'm slapping

a duty on all of your goods coming over the border, exempting again the ones that I want, the ones that I've chosen should be tariff-free. How do you think it's going to play out? I don't know. I mean, first of all, that 5%, 6% scenario, that's serious stuff. Ordinarily, that would be regarded as a 5-alarm fire, right? You know, margins are pretty close to international trade. Five, six percent tariffs mean a big deal, you know. And it was a lot of work getting them down to an average of 2%. I honestly cannot tell you. I could, I could, see a scenario where they just kick the can further down the road. We've seen previously where deadlines don't mean anything. And I think that would be very much in the Canadian interest,

frankly, would be to just as a say, kick it down the road. There's no, I don't see a great upside from clinching a deal. I think any deal that we're likely to get is going to be one that we live to regret. Can we afford the uncertainty, though? Because the other argument, and it's primarily from the business community, is just whatever it is, do whatever you have to do. do, we need certainty. We have to know what the number is, whether it's 2%, 6%, 15%, Europe, in a sense, made that calculation. I would think you could argue that the European deal, it seemed France was very critical of it today. Some of the other southern European states were quite critical with the exception of Italy, but it seemed like a deal that was really driven by German

auto manufacturers who were bleeding out on the uncertainty around tariffs. It's true up to a point. You're basically buying insurance. Is the price of insurance worth the insurance you get? Well, it depends what the price is. So, you know, again, my answer to you is a bit watery. It'll depend on what the terms of it is. I would not say any price is worth paying. I would not say, you know, certainty trumps everything else, not to use the wrong word.

It really will depend on the terms and we'll have to look at it. I will say I'd rather have an across-the-board tariff than a sectoral tariff. Yes. You know, sectoral tariffs do enormous damage to the industries in particular and create a lot of dislocation between industries, between Canadian industries. It shifts, the likelihood is you shift a lot of resources back and forth, not for any good economic reason, but just in terms of adjusting to the tariffs. When you have a flat across-border, presumably some of that, the impact of that will be taking the exchange rate. And a lot of it will be, a lot of the competitive impact will be given back because other things being equal, you would see a decline in the Canadian dollar. to account for it. So, you know, a flat across-the-board tariff, in my opinion, is to be preferred

to a higgledy-pigilty-sectoral. One industry gets 50 percent, another industry gets zero, which, as it, causes all kinds of dislocation internally between different industries in Canada. Europe, though, settled for something very similar to just that with a 50-percent tariff on their steel exports. Again, I could see the case where they would look at it. I'm not sure it's right, but I could understand a calculation that said, this is the least bad thing we can do. We're dealing with a madman. Let's get this below the radar where we're not on his mind every day. He's got other fish to fry and just try to limit our damages. So that could make a lot of sense. I mean, what you just said now to explain what Ursula von der Leyen was thinking when she was in the Donald J. Trump ballroom,

why isn't that what Mark Carney should be thinking as we go into Friday? just he's a madman. We don't know the future. The future is uncertain. We can't know the future. We have to have certainty now. We have to move beyond this. Whatever it is, just accept it. And it likely would be a pretty ugly butcher's bill. It could be hundreds of billions of dollars for his Golden Dome, his missile defense system. It could be promises to purchase because it's not, it's usually in all these deals, Andrew, it's not simply a question of what are you going to be charged to get access to our market. It's What are you going to invest in our market?

The shakedown element of this now across Indonesia, Japan, and Europe is quite explicit. So I ask you, again, is that, why not follow in Europe's example, rip the Band-Aid off now, do what we have to do. It'll be messy. We can't bank on it, but at least for a while, we'll have some certainty going forward. Maybe. It's not necessarily wrong, but what I would say is every situation is different. Our geography is different. Our level of economic integration is different.

The interests, therefore, that arise from that are different. There are much more powerful economic interest in the United States who, to what extent they have an impact on Trump's decision-making is another question. But they would be in favor of keeping the border open. You've got 36 states in the United States where Canada is their major export partner. So, you know, the economics are different of it. Therefore, the politics are different. We've got Kuzma, hate using that. I like to say NAFTA, too, but we've got that.

agreement in place to what extent that's a constraint of those actions, again, is open to question. But that's an issue as well that Europe doesn't have. So the situations are different enough that it's not necessarily a slam dunk that you do the same thing or adopt the same strategy as they do. Yeah. I hate to say this, but if you look at where Trump is at right now, Andrew, you know, last month, I think there was $26 billion in tariff revenue that came into the Treasury Department's accounts, annualized, that's well over 300 billion in tariff revenue, and he's only done a series of deals. He hasn't gone forward with, let's say, higher collections against others. He hasn't figured out the situation with Canada and Mexico.

So they're raising revenue on this. Inflation has not shown up in the United States. Maybe it's still to come. We don't know, but it's certainly been, I think, slower than a lot of people had assumed. And no one is retaliating. So far. Everyone is cave. Japan, Indonesia, Europe, Japan and Indonesia, or sorry, Indonesia doesn't really matter,

but Japan and Europe matter. They're not retaliating. And the whole argument against tariffs, one of the key arguments, is the death spiral, the death spiral of retaliation, what happens when you have a trade war. Right now, Andrew, it looks like he is sweeping the decks. Well, okay. And isn't this, at least in the short term, isn't this an unfortunate reality that he's winning and we're losing.

We talked a little about this on a previous occasion. First of all, the prospect of a trade war to me has always only been one and relatively minor argument against tariffs. Mostly it's what you do to yourself the matters. Second of all, there's strong reason to argue that the tariff impact has been delayed so far. It's been delayed both in terms of

how much companies have been willing to raise prices in response and in terms of the effect on trade. Let's take the second one first. It hasn't had as much effect on trade yet as you might otherwise expect because a lot of trade happened in advance of the tariff. Front and loading. A lot of front loading. So that's going to affect that. Secondly, there hasn't been as much impact on the price front because people are waiting it out to see how permanent this is.

So, yeah, if you're a company, you've got very tight margins if you're in a trade exposed sector. You don't have a lot of profit margin to give up. But you might do so in the short term. Eat the tariff. Bite into your tariffs. To fend your market share. To wait it out. Yeah.

Because, you know, the tariff is 100% on Tuesday and it's 20% on Thursday and it's, you know, there's just so much uncertainty that it might be worth leaving in place. The more that you become convinced it's permanent, then you can't just take that hit on your profit margins. You know, you're not earning a huge amount to begin with. So you've got to put the price up. So you are, I think, going to see longer-term impacts on prices. So I wouldn't be fooled by the short-term impacts. So, yeah.

And therefore, if there hasn't been that it might be. impact on trade yet because so much it was front-loaded, then you're not going to see the, you're going to still see trade flows happening, you're still going to see some revenues coming in. Are you going to see those revenues in the long term? I would be doubtful. So I think there's stay tuned. I guess it would be my answer to that. Yeah, and I think over a period of time years, Europe, Japan, others in Indonesia will diversify

their trade as quickly and as fast as they can away from the United States. So that's the other thing is exactly. I mean, that's a cut of, in death by a thousand cuts. Longer term, economic nature heals itself, right? But things flow around these things. Shorter term, what's your big win? Your big win again is you get to whack your consumers with 15, 20, 30 percent tariffs,

and you get to turn your economy into industrial backwater because you're not keeping up with the productivity. You're not remaining competitive. Over time, as you say, you're gonna see trade flows knit together around the United States. Longer term, it's absolutely a loss. It's a political win. in the short term, you get to jump up and down and beat your chest.

Yeah. Talking about political wins, what do you think Mark Carney's political situation is? Is it a challenge of managing expectations that were created during the election, the so-called elbows-up movement? Is it a longer-term challenge that the longer this president tortures us on tariffs, the more business confidence suffers in the country, the greater risk that even if we're making big investments and new net, national projects. A lot of companies are going to leave. There's a lot of talk this summer.

David Frum was on our channel over at the hub discussing, you know, a feeling of a pessimism in the country, brain drain that's going on as people in a sense vote with their feet. I think short term, we see this in the polling data, he's looking very solid. He's got a huge margin over Pierre Poyev and over the conservatives, less over the party to party, but leader to leader, a huge margin. He's got a left-wing party that's flattened his back at this point, so he's got a lot of room to maneuver, and he can veer quite far to the right, as we're going to see on the fiscal front, and poach a lot of conservative votes, at least for the time being. Longer term, you know, he can do a lot in the short term to look busy and to look

purposeful and to look, you know, in charge. And he's doing those things. And I think in some cases, at the expense of parliamentary democracy, ramming through these omnibus bills, some of which very draconian measures in them. I'm not happy with them, but from the standpoint of looking determined and in charge, that's looking good for them in the short term. Longer term, if you're not getting results, you look like you're spinning your wheels.

If we get into a recession, if some of these tariff things really start to bite, you know, it doesn't matter who's in power, it doesn't matter how purposeful you look. If unemployment is rising, if the deficit's spinning out of control, then you can look bad. Obviously, a big bet that they're making

is on the fiscal front in terms of the spending cuts. I think there's much more appetite among the public for spending cuts than is often given credit for, as long as you look like you've done it in some kind of methodical way, and you handle the fallout well. Exhibit A, of course, would be the Kretchen Martin cuts in the late 90s, where they remained above 50% in the approval ratings, not just approval ratings, in the polling numbers for a long time, and it kept coasting to victory. So if the public is apprised that there's a situation that demands it, and I think if you look at the polling data on support for defense spending increases, which didn't used to be there,

certainly I think people have gotten the message that spending had really gotten out of control under Justin Trudeau's government. I suspect they've got room to run, at least in the short term, on that, as long as they handle the follow-it well, as long as it looks like it's well-managed and planned and there's not huge disaster stories that come out of it, I think they'll retain a fair amount of public goodwill for the short term. It's the longer term, how long can you keep all those balls up in the air?

Well, I saw this week they just approved $2 million for the Just for Lafts Festival in Montreal while it is in receivership and going bankrupt. So, Andrew, I mean, how easy it is it for the tiger to change their stripes? That's a really interesting question. There is certainly lots there to cut. I know it's a conventional wisdom to say, look, once you take, defense spending out once you take transfers to individuals out, once you take transfers to the provinces out, there's nothing left to cut. That's not true. But each one of those things, Andrew,

has a constituency, the Just for Laf's Festival, has a constituency in Montreal as an important tourist event. I'm sure they put together a convincing proposal to the Department of Canadian Heritage. And here's $2 million of taxpayers' money in this situation that's going to a bankrupt organization that is before the courts going through restructuring. And that's private held. It's not even a public institution. It is a private corporation, for-profit corporation. And that's why you have to go at these things. You have to go where everybody's ox at the same time. It's true on tax reform as well. If you want to have successful tax reform, I think the lesson to the last 30, 40 years is because there's been repeated attempts at piecemeal reform,

each one of which I thought, most of them anyway, I thought were well considered as policy, but they were bound to be political losers because you had too many people who were being hurt and not enough people who are gaining from it. The only kind of tax reform that succeeds politically, in my opinion, is radical tax reform where you sweep away everybody and everybody complains, but everybody gets a tax cut. Similarly, on the spending side, it helps if you have some kind of real or perceived crisis. I wish it were otherwise. I wish you could just go and say, look, it's ridiculous that we're spending all this

spending. We're just going to stop. And I would love to see somebody make that argument on its own. But it helps, at least in the short term, if you have some kind of fiscal crisis where you can say, look, if it were up to me, you know, It's kind of like what you know, Andrew will have the economy is soft right now. Housing is collapsing. Housing starts. I think there was sub 200 condos sold in the entire GTA last month. If he starts cutting the federal public service, the unions will be up in arms. Much of the media will be up in the arms. They will say, this is heartless. You are the, you know, the giant vampire squid, which was the name given to his alma mater, you know, Goldman Sachs. And, and, and, and, you. And, you know, You know, how dare you, sir, in the face of, of, you know, our jobs, the weakness of Canada in the moment, this is when we should be spending.

This is when, you know, there should be a chicken in every pot. The great advantage liberals have in government is they don't face the liberals in opposition. So, yeah, if you're a conservative party making all those cuts, you're going to have the liberals and everybody who supports the liberals screaming at you. If you're a liberal party doing it, you're going to face less of that. Point one. Point two is the public tends to perform. to see parties doing the opposite of their self-image.

So if the liberals are traditionally associated with free spending, the public is going to trust them more to make spending cuts because they don't think they're going to enjoy it. Right. And whereas the conservatives, people, I think, fear they'll go too far, they'll take too much pleasure. That's very crude politics. I think that's the way a lot of people think.

So I think they've got more room to run on that than perhaps you're suggesting. And again, I think people understand that we're in very strange times, particularly the need to spend a lot more in defense, and that they'll sacrifice. You're absolutely right. There will be horror stories. There will be people screaming blue murder.

But I suspect the public will – I hope so. The public wants the tax cuts. It'll be interesting. It's – I mean, it'll be interesting to see what position the conservatives take. When the Kretchen Martin cuts were going through, you had the Reform Party on the opposition saying, go further, go faster.

that was a much more ideologically hued party than the conservatives have tended to be. Now, Pierre Poyevra has been associated with a much more ideologically tinged part of that party. I'm not so sure how ideological he really is when it comes to choosing between that and political survival, and I would not put it past him at all

to turn into a party of the center left demanding that they spend more. I mean, maybe that's putting it too strong, but I could well imagine the concurrent conservative Party, just playing the pure politics of this is heartless. How dare you do this? Especially any grants that are cutting the province of Quebec. Let's end on supply management.

You wrote a terrific column. You've been relentlessly coherent and consistent on this topic. So I'll give you credit for this, Andrew, over many, many years. Why are we just no closer to kind of goring this ox? You were talking earlier about everyone's ox getting gored at the same time. this is the one that this is the member of the herd that always seems to kind of be able to allied our attempts to deal with something, which is just it's an inefficiency. It's a, it's a, it's something that should have left us a long, long time ago. Yeah. Now, you get people saying,

you know, okay, yeah, I get a stupid policy, but why all the fuss about it? It's a small corner of the economy. It's not that big a deal. There's, there's as bad or worse policies around. And it's some extent. Well, have you tried to buy cheese in your local, of her market? Yeah, I think it. But you might say, is that such a big deal? It's a big deal. It's a big deal.

How much we're paying for financial services or how much we're paying for Ireland. And I get that. And there's some truth in that. I think the reason why people like me focus on it is it's a kind of a bellwether for everything else. If we can't agree that a policy like this is just utterly insane. And what is especially insane about supply management is, first of all, the people who are,

the victims of it who are paying the price of it, are the poorest people in the country. If you're taxing basic groceries, not taxing as in applying the GST to the same way you do every other good or service, and then you rebate to the poor with the GST rebate, I mean, I'm in favor of taxing

groceries, frankly. But this is not that. This is just jacking up the prices of certain groceries to benefit a very narrow interest group of very well-to-do industrial farmers, basically. And that's a key point, Andrew. I think people have this vision of a kind of a pastoral scene of a small farm and a beautiful barn and a few

cows in a kind of misty field eating organic grass. And the struggling family farm. When in fact, there's large multinationals that own the majority of these quotas. And this is big business. Yeah. So, you know, every intervention in the economy is redistributive in some way, shape, or form and ought to be looked at through that lens. So, you know, we have a strong, there's a strong moral and political consensus that it's right to redistribute from rich to poor. It is not, there's no basis to redistribute from city to farm or from some farmers to other farmers, which is what we're doing.

But in this particular case, we're also redistributing from poor to rich. So it's so abominable on so many friends. It's so not just inefficient but unjust. And when you look at the inefficiencies, it's not just inefficiencies that are imposed on the rest of the economy. to pay for it, it's inefficiencies that are being willingly embraced by the very sector. If they got out of their defensive crouch, if they, you know, were forced to compete on world markets, yeah, maybe there would be fewer of them doing it, but there's a lot fewer of them doing it anyway than there were 50 years ago when supply management came in.

But you'd be world beaters. If you look at what happened in New Zealand, New Zealand got rid of virtually all of its farm protections, and they used to be one of the most protected sectors in the world. They ripped the proverbial bandaid off in the mid-1980s under the labor government, Roger Douglas government. And they're now world leaders. They're the biggest dairy farm exporters in the world. And they're the precise of the people who we're supposed to be afraid of.

That's when you bring these arguments up with the defenders of supply management saying, how can we possibly compete with New Zealand? Well, you know, this is how it works. It's a self-reinforcing thing. The more you protect in the name of, oh, poor us, we're not competitive. the less competitive you remain and become. But just finally, Andrew, and I'm sure you've heard this argument before, but let's hear your rebuttal.

You know, why the bug bear about supply manager? You have a banking cartel, you have a telecommunications cartel, you have all kinds of oligoplies and duoplies and monopolies and monopolies in Canada. Why pick on dairy and poultry and this one particular slice, frankly, yes, cheese is 13 bucks if I want to buy a pound of cheddar in my local grocery store, and that annoys me. But what I'm paying each year to my cartel bank in terms of charges on my checking account, charges on my line of credit, on my mortgage versus a more liberalized country with a more liberalized banking sector probably dwarfs in comparison.

It may well, but this was my point in what I was saying before, is supply management as kind of a test case. If we can't summon ourselves to deal with such a manifestly unjust, never mind inefficient policy that may have a primary impact on just the poorest of us, but if we can't deal with that, are we ever going to deal with some of these larger problems? It's a kind of a rehearsal, if you will, for the kinds of arguments we're going to need to make to tackle cartels in general. And one of the problems we have in this country generally is a lack of competition. Now, mostly that manifests itself in terms of inefficiency and higher cost than it should be in lower productivity and therefore lower incomes doesn't have quite the same

distributional impact. Although, you know, you would certainly say as well, if airline fares domestic are much more expensive than they would be, that's going to hit lower income consumers much more than it's going to hit richer consumers. But it's not quite the same punch in the gut, if you will, as, you know, 200 percent tariffs on basic foodstuffs. So it's, it's, To me, it's trying to learn some of the lessons from that and apply them more generally. But yeah, the problem of lack of competition, the problem of cartilization is a more general problem in the Canadian economy. That was Andrew Coyne, Globe and Mail columnist, and yes, best-selling author. Go check out his new book.

Crisis of Canadian Democracy. We'll leave a link to where you can purchase that on the Indigo website in today's show notes. If you've been watching on our YouTube channel, please subscribe. We appreciate it. We'll also click on that little notification bell and we'll send you our next video conversation with Andrew as soon as it becomes available. And if you're over on the Monk podcast channel, leave us a review. We really appreciate your comments and feedback. We read them all.

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