00:00:00.000there are some dire predictions about canada's economy if the trade war with the united states
00:00:10.640is not resolved manufacturers and canada will not be able to survive at least many of them
00:00:16.560unless they move their operations to the united states some of that has already happened the
00:00:22.000oecd organization for economic cooperation and development predicts that canada will be dead
00:00:27.840last among its 38 member nations in terms of economic growth by the year 2060. Our guest
00:00:34.760today is Vest Sobot, who's the Executive Director of the Coalition of Concerned Manufacturers
00:00:39.560and Businesses of Canada. He's an engineer who's spent 40 years in the plastics industry.
00:00:44.800Joining us today from the GTA, welcome.
00:00:47.400Thank you so much, Mark, for having me on.
00:00:50.280Is the situation that dire, do you think, in Canada, based on what you have seen amongst
00:00:57.160your member companies? Well, all of our members right now are very concerned. Uncertainty just
00:01:05.380doesn't sit well with business people. And this introduces an enormous amount of uncertainty into
00:01:11.840the equation. A 50% tariff is huge. Most of our manufacturers don't make 50%. So that 50% tariff
00:01:20.340essentially eliminates any money that you make and essentially makes your business not viable.
00:01:27.160Remember, this is a trillion dollar friendship. I can't even say it right. Trillion, a trillion dollar friendship with America to turn the taps off that quickly is awfully dangerous. It will be cataclysmic. It will be like a business earthquake. And, you know, Canadian business owners and people who work in that space are dependent on America have a right to be concerned right now.
00:01:52.640Now, Dominic LeBlanc, who is our trade rep, he appeared on CNBC recently and was asked some pointed questions by the host, Joe Kernan. Let's have a listen.
00:02:03.440In the economic approach of Canada, I know you're familiar with GDP, personal GDP actually falling most years in Canada.
00:02:14.260the OECD projects that Canada out of 38 OECD members will rank 38 dead last in GDP per capita
00:02:24.460growth through 2060. And I'm trying to figure out why I looked to see. And I do find one thing
00:02:31.520it says here, tax and regulatory competitiveness. There's a gap even with the U.S. where we think
00:02:37.120regulate, you know, permitting and we've got all these problems down here. How bad is it in Canada
00:02:43.160And what changes do you think need to be made at this point?
00:02:47.840I don't think you're really negotiating from a strong position based on these things.
00:02:53.160Well, that is where I might respectfully disagree with you.
00:02:57.360I think that if Canada is the top export destination for 26 U.S. states, we sell oil and gas and potash essential to the U.S. manufacturing economy.
00:03:08.640Huge value added in the United States.
00:03:10.400So we can find compelling examples where trade done properly benefits both countries.
00:03:16.700But I certainly take your question in terms of the regulatory burden, in terms of tax competitiveness.
00:03:23.660Those are issues that Prime Minister Carney ran on in the election last year.
00:03:28.460He got a mandate to be able to ensure that federal permitting, for example, of these major projects,
00:03:35.740Think of big energy projects. Think of clean energy projects, port infrastructure.
00:03:41.560All right. So he's saying that they're diversifying their economy.
00:03:46.500They're saying that they've already signed trade deals with a host of different countries.
00:03:52.880You're an expert when it comes to red tape and dealing with red tape, having worked at the plastics industry all those years and having worked with the coalition.
00:04:00.440Is it true that the Liberal government in Ottawa has taken a hacksaw to red tape in this country?
00:05:17.680They said taxes and regulatory competitiveness are going to make us 38th out of 38.
00:05:24.040And that's something that is totally within our control.
00:05:27.500We should be able to fix that problem because it's an internal problem.
00:05:31.740And why we haven't been able to do it so far, it really puzzles me.
00:05:34.860I think it just has to do with political will.
00:05:40.900And I haven't seen any examples of where red tape federally has been reduced.
00:05:50.900Well, government likes to grow, you know, and so as government grows, then you have to have more bureaucrats and those bureaucrats have to justify their existence.
00:06:01.420And I guess they do so by slowing down the wheels of industry. That's the only explanation that makes any sense to me.
00:06:08.060that's why it's so important to shrink government but i think that runs counter to the ideology of
00:06:13.900our current government but let's talk about some of the things you're hearing from your member
00:06:18.700companies how many are there first of all there's about 300 of them right across the country a lot
00:06:24.540of them in ontario and a lot of a lot of them in alberta as well but essentially they're all saying
00:06:32.220the same thing. And that is, we had hoped that the discussions, that the negotiations would focus
00:06:41.800on expanding opportunities. And instead, it looks like we've been focused on political issues and
00:06:50.100not business issues. And that is very, very concerning to the whole, you know, to anybody
00:06:56.140in business right now. I took a look at some of the things on the table that the Americans have
00:07:03.040released, and they seem quite reasonable. The tariffs were coming down in many, many sectors.
00:07:10.880The auto sector was going to benefit significantly from that. I worry now, the longer they rag the
00:07:17.800puck, we rag the puck. I think we're ragging the puck and not the Americans. The longer Ford,
00:07:23.940for example, the more Ford in Oakville is in jeopardy. You know, we've already lost
00:07:29.840Atlantis in Brampton. We cannot afford to lose a Ford in Oakville. And, you know, it is incumbent
00:07:38.640on our elected officials to see how they can come up with win-win solutions. And I just don't get
00:07:45.800the sense that they're doing that right now, neither do any of our members. It's time to
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00:08:20.120in convenience stores across the country and current laws ban communication about the risk
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00:08:31.580tools exist. Canadians deserve to have the freedom to know about them, to learn about them, to even
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00:08:42.980more about this campaign and our friends over at Unsmoke by visiting their website unsmoke.ca
00:08:49.520and thank you so much to Unsmoke for sponsoring this episode. Now following the collapse in talks
00:08:55.620where it appeared we were the ones who walked away I mean there's been a lot of finger pointing
00:09:00.520blaming he said she said I mean to what do you attribute the break I mean was it as the prime
00:09:10.600minister says, which is just a series of things that the Americans threw into the pot at the last
00:09:16.360minute. Meantime, you have the Americans saying that actually the reverse is true, that in fact
00:09:21.820it was the Canadians who basically upended the chessboard right at the end as they were getting
00:09:28.140ready to sign. There was issues around culture and language, the idea that for some reason the
00:09:35.540Americans were objecting to the use of French. There was the quote-unquote Netflix tax that the
00:09:41.900Americans objected to, but they have come out and said, we don't object whatsoever to Canada
00:09:49.020taking steps to protect its cultural industries and its language. That's not an issue from our
00:09:55.440end. You know, it's tough to navigate the truth from the lies in this case. What do you think
00:10:03.320happen? Well, I'd love to see the draft agreement. I'd love to see it made public. And I have a
00:10:11.140feeling that the Americans will release that and the Canadians vote. And that tells you
00:10:16.520something in itself. I don't believe the issue was language. I don't believe the issue was
00:10:24.420small dotting the I's and crossing the T's. I believe it was purely political. I believe it
00:10:31.380It has to do with the three by-elections that are going on across the country, or is it four?
00:10:35.240I'm not sure, Mark, you can correct me on that.
00:10:38.140The three of August the 31st, that much I know.
00:10:40.720I believe it has everything to do with politics, and what our membership really would love is if we focused on the business,
00:10:50.660if we focused on the $1 trillion friendship, if we focused on the economy and left the politics out of the equation.
00:10:59.420That, I think, is what we all want and what we all desperately are looking for.
00:11:06.540My concern comes from Amaya Johnson, who was hired by the prime minister's office, who was a Democrat who worked for Clinton, who worked for Biden, who worked for Obama, I believe.
00:11:18.760And what's the purpose of her being within the PMO itself?
00:11:24.620I have a feeling it has more to do with politics than it has to do with actually doing a job that's useful for the results that Canada is looking for.
00:11:38.420Yeah, I mean, if Maya Johnson is a partisan Democrat, which we know her to be, then how much incentive does she have to get a deal here?
00:11:45.660I would think she has a reverse incentive in order to help the Democrats in the midterms.
00:11:51.660She can point to a collapse in trade talks, point the finger at Trump and say it's all his fault, you know, and support the Democrats because we'll fix it, you know, once we get a chance, get our hands on the levers of power.
00:12:05.440So it would seem to me that if she has any kind of real sway, and she may, that she has an incentive to upend the discussions rather than make them lead to some successful outcome.
00:12:20.100Can I share a quick story with you? It was 2016, 2017, January. Trump had just won. I was invited to the Canadian ambassador's house just outside of Washington, D.C. to have a dinner. I was expecting to go to the dinner. Oh, there's a lot of CEOs that were invited there. Big, big names, RBC, all sorts of others.
00:12:39.700And I was expecting to see the new Republican lineup there
00:13:02.180The whole table was Democrats on the other side
00:13:04.700And they had all worked for Hillary Clinton
00:13:07.060And I thought to myself, boy, this is a little bit of a strike and a miss.
00:13:11.680Shouldn't have we been focused on the outcome, i.e. working closer with the Americans and hence being the host to the new group that was in?
00:13:34.840And that's not how you win. I think the victory here is just ending the spat. Nobody can win-win here now. The rhetoric has gone too crazy.
00:13:49.340I think if we get back to the table and see where the Venn diagrams intersect and agree to those, and anything where it doesn't intersect we can work on later, I think that's our best objective and outcome moving forward, because I don't think we should allow this to fester any longer.
00:14:10.460Yeah, I believe it was Julian Assange who came out. I don't know if you saw his post. He came out and criticized by Mr. Carney over the suspension of the U.S.-Canada trade talks, suggesting that he was helping the Democrats in the United States.
00:14:27.620So it wasn't just Maya Johnson. I would suggest that it's Carney himself that is aligned very closely with the Democrat Party in the United States and may have had that as well as a factor in terms of what he did and when he did it.
00:14:43.900Then there's also the issue of Keystone, which apparently also came up, my understanding, and we're still trying to piece it together like everybody else, that Carney dangled the pipeline, the restarting of that pipeline from Canada's side, obviously, in front of Trump.
00:15:02.300and Trump liked the idea, as you will expect that that would be the case,
00:15:07.540and then had it pulled out from under him right at the end.
00:15:13.480Have you heard anything about that and how Keystone may have complicated
00:15:18.620the eventual signing of this agreement?
00:15:23.460No, I haven't heard that it was the tipping point, if you will.
00:15:30.480I just love that the president wanted KXL on the table.
00:15:38.040He was actually advocating in Canada, for Canada, and he was behaving more like a prime minister than our prime minister was.
00:15:48.340So I was excited that KXL was on the table, and it really should be.
00:15:54.960the, listen, we should be the strongest union and partnership in the whole world. With Canada
00:16:04.020and the United States rolling in the same direction, nobody can touch us. That's where I
00:16:09.520want to be. That's where I want us to see. I want to see Reagan Mulroney, where they work out all
00:16:16.060the bugs behind closed doors so that we don't have to hear of all the pecune issues and we don't have
00:16:23.420hear about all the infighting and it's very doable when you have a good relationship stock
00:16:27.900all day recently said that the key to these negotiations are good relations and i don't
00:16:33.660believe our canadian government has been has invested itself uh in in making those relationships
00:16:40.220as strong as they should be well the americans think that our side is not bargaining in good
00:16:45.420faith in other words they don't maybe really want a deal and we would rather align ourselves either
00:16:51.820with the eu or with china and that this is really about undermining america at you know that that's
00:17:00.060his real agenda here and even that the fact this this prime minister is already let's face it just
00:17:07.660flat out lied on a number of occasions whether he was talking about the bridge the revenue sharing
00:17:14.380agreement or the condo buyout bailout it just seems that this guy seems to be challenged when
00:17:21.020it comes to just telling the truth i can't help but wonder now whether with his credibility
00:17:27.660damaged uh whether canadians are going to buy it this time but what do you think well i think one
00:17:34.860of the touchdowns there is a chinese newspaper uh recently uh just congratulated mark carney
00:17:41.420i'm pushing back against america you got to start to be worried when the chinese
00:17:49.580are patting you on the back yeah best so but thank you so much for coming on the show we
00:17:56.940we really appreciate that thanks so much mark and if you enjoyed the show and appreciate
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00:18:10.380backslash straight up it helps us do what we do here thank you so much for tuning in we'll see you