Ambassador Pete Hoekstra claims U.S. tariffs “improved” Canada’s position
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Summary
Ambassador John Hoekstra joins us on the 250th anniversary of the United States of America, to talk about the importance of the relationship with Canada, trade issues between the two countries, and the benefits of working together.
Transcript
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Ambassador Hoekstra, thank you so much for giving us the opportunity to speak with you
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on such an important and historic occasion in America's 250th anniversary.
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Well, thank you. Thanks for coming. It is a great day. It's an awesome day.
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As Canadians watch the celebrations today from this side of the border,
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what message do you want Canadians to receive about America today?
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Well, I think it's very consistent with the message that our Secretary of State put out,
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You know, the friendship, the close bonds that we have.
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You know, this morning I was at the flag raising for the U.S. flag
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And then in front of Parliament, you know, at the changing of the guard,
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they played the U.S. national anthem as well as the Canadian anthem.
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You know, we've got a long friendship that goes way back.
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An ambassador's role is to represent the interests of your country.
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You previously served as ambassador to the Netherlands.
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But I would say that, as you probably would agree, the posting for U.S. ambassador to
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Canada is quite unique in the respect that it's an immensely close relationship, very
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And I don't think it's controversial to say that America's popularity has taken a bit
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your perspective how do you assess the perception of the united states from canadians and as
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ambassador do you think it's important to improve that perception i mean our focus for the last year
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because it's not you know this has been a problem that has lasted for 12 14 16 months
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you know i think i'm disappointed by it i tell people i don't totally understand it and they go
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ah they get all upset and it's you don't understand why we're mad and it's kind of like
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no not really i mean we still have two and a half billion dollars of trade crossing the border each
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and every day we have canada according to the prime minister has the second best trading deal
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of any country in the world with the united states of america that's not a bad place to be
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and yeah we have to you know we're trying to get that perception altered back to what we think is
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reality we're creating lots of prosperity lots of wealth and lots of jobs on both sides of the
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border not just the southern side of the border the northern side of the border we do things that
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make both countries safer. We do things together that make both countries more secure against
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foreign threats. Those are all things we ought to be thankful for. For sure. And yeah, we've got,
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we've got some disagreements on trade issues. We think there's areas where we don't get treated
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fairly. Canada has probably some areas where they don't think that they get treated fairly. And so
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we've got to work through those and resolve them and I think the future can
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be very very bright but both countries you know have to work through that
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process and if Canada's mad if they believe there's a rupture if they
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believe that some say can't America is not trustworthy and it's kind of well
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that's an interesting person I want to get into some of those trade okay of
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course and it was yeah so on our national celebration on July 1st it was
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announced that KUSMA would not be renewed and the agreement would remain in place essentially
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What was announced is that we would not renew KUSMA or USMCA and extend it.
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The terms of USMCA say that it can go on for one-year reviews, but it also can be terminated
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by any one of the three parties at any given point of time with six months' notice.
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But out of the reporting, it emerged that there is a possibility for protocols or side
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deals on a bilateral basis between Canada and the United States.
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For Canadians watching, particularly Canadian business owners who rely on cross-border trade,
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is there any insight you can provide as to what those protocols or side deals might look
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Well, I mean, we've seen what they might look like, okay, over the last 12 to 14 months.
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We saw that there could be a trade deal, a side deal on oil.
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America's looking to buy 3 to 4 million barrels of oil per day.
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A natural partner, a supplier for that would be Canada, okay?
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That's $100 billion to $120 billion of revenue going into your economy.
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That trade deal that we had back in October also said we're going to work together on uranium.
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We will go on and do more enrichment so that it can be used for more purposes.
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So that's an area where there was potential cooperation.
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And we had a perfect agreement on what steel would look like,
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saying that we would put the same protections around Canada
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as what we have in the United States to prevent third-country dumping steel
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And we were also going to do something on auto parts.
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So you had an indication what that would look like, and poof, it all went away.
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You've said in previous interviews that you believe there is a potential win-win outcome here in a negotiation.
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And I want to ask, though, if Canada was to concede on the trade irritants that your government has with Canada
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and concede on that leverage it would obviously be a win for america but if that was the case what
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would the win be for canada in that instance well let me give you an example the uh one of the
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things that we see as a you know what we describe as irritants is pharmaceuticals okay the
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pharmaceutical industry uh canada used to have a thriving research base you train lots of young
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people to be researchers in the healthcare field. Where is that industry today? It's
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gone because of how Canada has decided to reimburse healthcare spending and those types
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of things. You've driven research out of the country. You've also, because of the way that
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you are reimbursing pharmaceutical companies for certain drugs, certain drugs are no longer,
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or certain drugs as they come on the market either never reach Canada
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or reach Canada much later than what they reach other parts of the world.
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So, you know, fixing the drug pricing issue is a win for Canadians
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because it means Canadians are going to have access to, you know,
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groundbreaking technologies that will keep them healthier, okay,
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that will treat certain illnesses and diseases and remove an irritant between the United States
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and Canada. Win-win. Fair pricing for the drugs, access to the Canadian market, but most importantly,
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those drugs becoming available to Canadian citizens. So that's where you go on pharmaceuticals.
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I can jump in here. The Prime Minister was... You like to jump in. You like to control these
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interviews. I know you're on limited time. You're on limited time, yes. The Prime Minister was
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elected on a mandate to diversify trade away from the united states to expand our trading relationship
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and he's signed numerous trade deals with countries but most controversially with china
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from washington's perspective is it not a concern that continuing to impose tariffs and inflict
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economic pain on allies like canada is only going to drive your closer allies towards the grips of
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China. Well, let's go back one step. Impose tariffs. Remember, the Prime Minister says,
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you have the second best trading relationship with the United States of anybody in the world.
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Eighty-five percent of the products that leave Canada, that go to the United States, go tariff
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free uh you know so we're not uh and remember the second best that means relative to everybody else
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in the world that has higher tariffs you've improved your competitive position with the
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united states of america if you get a five percent tariff and they get 10 you've just improved your
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competitive position by five percent right follow that and so you know you we've we're putting
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canada in a better position to supply to the united states if canada wants to diversify
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more power to you it's hard it's hard you know you you don't have we don't
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and you won't find you know other countries beating down your door saying oh hallelujah
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we can now buy car parts from canada is that what europe's going to do no it's hard to penetrate
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into a new market it's hard to penetrate into asia and it's okay we're fine i mean we do that
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every day in the united states diversify and try to find more customers canada wants to do that
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that's okay too i think what you're going to find with china is find a country that says
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yes we got closer to china 10 years ago and that has been an economic boom for us do you think
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that without the tariff regime the initial tariff regime and sectoral tariffs on canadian critical
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industries that canada would have even made the deal with china in the first place i don't i don't
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know okay i mean diversification is uh it's it's a viable strategy i came out of the private sector
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okay every year part of our marketing plan was we're going to take great care of our customers
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that are that we have because we don't want to lose any the second thing we're going to do is
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we're going to do everything we can because i was in the office furniture business we're going to do
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everything we can to identify growing companies and try to get them as they start buying major
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purchases of furniture the first time through and get them as customers and then the third thing
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we're going to do is we're going to go to existing large companies and we're going to try to get them
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to switch from steel case hayworth or whatever uh to herman miller and we always recognize that that
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third bucket was the toughest bucket for us to get new business we could always yeah the easiest was
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to grow business with our existing customers identify new growing customers but the toughest
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one was always the third and it's the same way with the country i have to ask you about your
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recent comments regarding the Gordie Howe Bridge which have received national
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attention in Canada. You said that it was, if I can quote you correctly, that it
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was one of the big myths about the project that Canada was funding the
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bridge. I said that Canada was paying for the bridge. They are
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funding the bridge. Okay, and that due to cost overruns and delays the
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business model had changed. I think most Canadians, myself among them, would
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look at this and say those cost overruns and delays have been absorbed by the Canadian
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taxpayer. So perhaps you could explain a little bit more about what you meant by those comments
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and where the where the misconception is that we have about this. Where have those been absorbed
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by the Canadian taxpayer? Well, the project itself, the cost of the project was delivered
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by the Canadian taxpayer. Canada gave the money. Really? Yes. What's the deal? Explain this to me.
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Well, perhaps you can fill me in where we're getting this wrong,
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because most Canadians seem to believe, based off the reaction of your comments,
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You even said that at the beginning of the question.
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You finance the initial construction of the project.
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Okay, so it's like you said the numbers are real, depending on exactly where you start.
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But the estimated cost of the bridge was going to be $1.2, $1.5 billion, okay?
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Financed by the Canadian government with a regime in place that that would be paid back,
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meaning that at the end of the day when the funds came in from the revenue from the bridge,
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so it's not it's financed by the taxpayer the Canadian government made a judgment that said
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we're going to invest in this project there's going to be revenues coming back and we're going
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to as those revenues come in we're going to pay off the bonds or whatever financing the government
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is using in Canada and you know so it will be paid back the taxpayers off the hook and what
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we've been dealing with and a lot of the discussions have been is, well, America, you have absolutely
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no say in the bridge because we paid for it. It's kind of like, well, that doesn't seem fair.
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You know, it's revenues that are coming out of the cross river border area. There's so much revenue
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that comes out of there. It's either off of the tunnel or off of the bridge, right? Some of that
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revenue is now going to go to the Gordie Howe Bridge to pay off the Canadian debt. And so
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we view it as it's a joint project. We identified a lender up front, which was the Canadian
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government. We identified a way to pay back the lender. And at that point in time, it would be
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a freestanding bridge governed by an authority. And some of those basic principles
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are called into question because of what's happened over the last 10 to 15 years as that
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bridge has been built. And so where do we move forward? Both the Canadian government
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and the American government a few weeks ago said the bridge isn't ready to open. There's some
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things that we need to negotiate and that we need to work out. And when those things are worked out,
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we will open the bridge. What would be your response to some Canadians who feel like there
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be politics involved here that the there might be something to do with the ambassador bridge owner
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donating money to the president's super pack and then just a month and a half later or so the bridge
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announcement gets delayed to those that might think that what would be your response that they're
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those two events might not just be a coincidence like i can't change the perception you know
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the family that owns the ambassador bridge they donated to my campaign now that might have been
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16 years ago that might have been 20 years ago and people are saying ah look the ambassador
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was bought off by by the family now i mean the the bridge came in significantly over budget
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depending on where you start it's two to three times more expensive than what it was originally
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anticipated to cost it took an extra number of years to build the bridge to get to a point where
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Those are fundamental changes to the original agreement, where the original agreement has
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If a project comes in two to three times more expensive, do you expect the terms of the
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contract to potentially be re-evaluated, and the answer is, in America, yes.
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Maybe in Canada, not, but in America, when a contractor doesn't deliver two contracts
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within budget, there's sometimes a re-evaluation saying, okay, are the terms still the same or
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should they be modified? We are where they should be modified. I want to ask you now briefly about
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national security and border control. The initial emergency tariffs on Canada were related to
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border enforcement, illegal migration, and drug trafficking. Since then, Canadian government has
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invested heavily in border defense. We've seen, according to Canadian government and U.S. government
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data, that interactions at the border have decreased, that the drug seizures have also
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decreased. Is Washington satisfied with Canada's border defense measures so far?
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I think we're encouraged by the progress that has been made, and that will have an impact on
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the negotiations moving forward, yes. Intel agencies in the United States have
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repeatedly warned that there are foreign hostile networks operating within Canada,
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whether that be potentially Iranian-backed or cartels, without getting into classified
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information, are able to expand a little bit on how the United States views that threat in Canada
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right now? We view it as significant. We view the threat, whether it's in
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intel agencies trying to penetrate into the cyber world, the threat from China is
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significant whether it's the precursor drugs coming into North America that's significant
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and what we want to do is we want we want to protect the cyber world we want to protect against
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the precursors coming into North America and we put a lot of pressure on Mexico and those areas
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Same thing we're doing with Canada, because we would love to have a secure cyber network
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And also, we'd really love to see a significant decrease in the number of fentanyl deaths
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Those are things that we can really work together on.
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The U.S. National Security Strategy, which was released late last year, talks about the
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Trump corollary to the Monroe Doctrine. In particular, it states that in the Western
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Hemisphere, the United States will establish and expand access in strategically important
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locations. One such location would be potentially the Northwest Passage. The Canadian government
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views that as internal sovereign water, and the United States administration views that
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as an international strait. I'm wondering if you can explain the strategic and legal
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reasonings as to why the U.S. maintains this position when Canada disagrees with it.
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It's an international dispute. I think this dispute has been around for quite a while. It's not brand new. I don't know the legalities and the technicalities of this, but the bottom line for us is our vision is working with Canada.
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I was just at NORAD, Winnipeg, and I asked for, you know, hey, how far does NORAD go?
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Okay, is it really just protecting along the western border of Canada and the United States?
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And it's kind of like, no, Pete, it goes, you know, it goes along the west coast, and then it goes across the north.
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All right, we've got stations in various locations that are NORAD stations and facilities.
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And we think that attacks coming in over the Arctic threaten the United States,
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We think that a strategy working together and not expanding NORAD in terms of saying,
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hey, you're going to cover areas that you haven't covered before,
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but saying we've got the strategy up there, but it's pretty thin,
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and we got to deepen that strategy we need more capabilities up there and we'd rather do that
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with canada than to do it separately our our position is we think norad works and it can be
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expanded and deepened against the new threats that are out there that invitation has been put
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out there to canada we're waiting for canada to respond very quickly are there consent are there
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Are concessions on claims to the Northwest Passage being discussed in any negotiations between Canada and the United States?
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I know what you're talking about in terms of concessions, in terms of saying it's sovereign Canadian territory and those types of things.
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I know that we would like to have the discussion about is Canada going to protect the Arctic on its own,
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as the Canadian government has said, potentially, that's what they're going to do,
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Because we now, we're going to protect our north.
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It's just how are we going to protect it, where are we going to protect it,
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and who are our partners going to be working in the Arctic?
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The guiding principle for the Carney government is about building Canada strong.
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The governing philosophy for the president is about America first.
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Some see those as incompatible visions for each other.
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I think if you take a look at the last 20 or 30 years, I think Canada and the United States have both benefited from the relationship that we've had together.
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America's fully committed to work and strengthen those relationships.
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The ball is now in Canada's court in terms of, you know, do you want to do sovereignty on your own in the digital world?
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Or are you going to allow America to participate in that area?
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You're going to do defense on your own, or you're going to take companies like GM who have been building and been part of the defense infrastructure over the last hundred years.
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Will they be considered part of a vital component of Canada's enhancement of their defense industry?
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Or is it, well, you've got the wrong logo on the building.
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We're waiting for an answer from Canada on that.
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So, you know, we know that we think we can provide support in the digital world.
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We can provide cooperation in the defense world and just in those two.
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And there's lots of others, but specifically those two.
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We're really waiting to see exactly what direction a sovereign Canada is going to go.
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Thank you so much, and we wish you a happy and joyous Independence Day.