Carney pauses cross-border bridge under U.S. pressure
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Summary
The Gordie Howe International Bridge opening has been delayed indefinitely, at the request of the United States. This is the latest setback in Canada's bumpy relationship with the U.S., and it's just the latest in a growing list of issues between the two countries. Our guest today is business consultant and commentator, Kirk Lubomov.
Transcript
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it is the latest setback in canada's bumpy relationship with the united states
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the gordy howe international bridge opening has been delayed indefinitely as the two countries
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resolve some outstanding issues well at the at the request of the united states we agreed to
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to delay the opening and take the necessary time to resolve outstanding issues.
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There are a few issues that have been raised, and this is a collaborative approach.
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As I said yesterday, there's not great drama here.
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We're going to work through some issues that have come up.
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And for a bridge that is going to be in place and serve Canadians, Americans, others for decades,
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It's a question of a few weeks is time well spent.
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President Trump has threatened to block the opening unless Canada makes concessions in trade talks, including on toll revenues.
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While the possible end of Canada's free trade deal with the United States could undermine Canadian unity,
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recent comments by President Trump, coupled with the failure of Premier Doug Ford's trade mission to Washington,
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has cast doubt over the future of the KUSMA trade deal.
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blames Canada for dragging its heels in trade talks.
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I look forward to going through the negotiations on some of the issues that we're talking about.
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But once Canada clearly outlines its direction and what it wants from the negotiations,
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I think that we can do some great things together.
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It turns out the U.S. has invited Canada to expand its cooperation,
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but hasn't heard back yet on what it wants to do.
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If the deal is not renewed, some say that might encourage more Albertans to support the independence movement,
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allowing an independent Alberta to cut its own deal with the Trump administration.
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Our guest today is Kirk Lubomov, business consultant and commentator coming to us from Calgary.
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You've been tweeting about it, including your reaction to a clip by Pete Hoekstra, of course, the U.S. ambassador.
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You said, interesting, it turns out the U.S. has invited Canada to expand its cooperation, but has not heard back yet on what it wants to do.
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I think it surprised some people, including, I guess, yourself, who thought that really it was the United States that was holding things up.
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But now, apparently, we find out that it was Canada, possibly, if you believe Hoekstra.
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Well, there's obviously a lot of politics involved here in these negotiations and a lot of jabbing back and forth.
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The interesting thing is that Canada's slogan went from elbows up to fortress North America.
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So it's an interesting pivot, obviously, that the Liberals are leading and realizing that it is paramount for Canada to negotiate KUSMA and continue to deal and come to whatever agreements that are trade irritants that's holding us back from solidifying this deal and just moving on with it into 2036.
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You know, the biggest risk with this deal is not specifically to withdrawal.
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I don't think the withdrawal will happen, but it's that it will go to annual reviews.
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And that creates so much uncertainty and so much risk that it will scare investment away.
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And now we have the delay of the Gordie Howe International Bridge opening.
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It's just another indicator of the rather bumpy relationship that we have with the Americans these days.
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with this delay I guess being indefinite that President Trump in the past has threatened to
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block the opening unless Canada makes certain concessions including even some on tolls any
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thoughts about that yeah you know they're flexing what they can but there's also obviously a lot of
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things in the background including security and safety let's just remember we just had an Islamic
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terrorism attack on the u.s consulate and a canadian officer was just killed by uh by one
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that's tied to it somewhat and this is some of the things that the u.s has been warning about
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and we have done essentially nothing about it let's remember we supposed to have a border czar
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of a sudden has anyone heard from him since that announcement i can't i can't tell you a single
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thing that has done or anyone you know has said anything about that so there are obviously some
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serious issues including steel continuous dumping of steel and aluminum into the united states from
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canada a canadian company from brampton just was agreed to settle a fine essentially on bringing
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in steel and aluminum and and other aspects uh from that industry into the united states there
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were that they were originating from Asia, India, China, etc. But we're claiming it, it's local.
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Yeah, you make a great point about the security issue. Maybe that's playing into President Trump's
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decision to put this off or delay it. Because of course, we had the shots fired, as you know,
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at the U.S. Embassy in Toronto, the consulate building on University Avenue. And then this
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shooting of the police officer may have been tied to that, as I understand it. It's obviously still
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under investigation. We don't know all the details. But maybe you're right. Maybe security
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is one of those thorny issues that Trump wants dealt with before this bridge opens up. Isn't
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that possible oh 100 you know we got the golden dome they were they were talking about canada
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somewhat agreed to it uh he knows you know they're looking into greenland and arctic as a strategic
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uh geography to secure north america and i think this is part of the liberal wake up of with this
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new slogan of fortress north america that they're trying to come up with somehow the canada can
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participate in that and creates more intertwined industries uh into defense sector with critical
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minerals etc that will lead to that uh end goal of really securing securing uh north america not just
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from a defense point of view but defending our supply chain which i think is just as paramount
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as overall defense yeah i mean it is interesting we had doug ford who of course has been very vocal
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in criticizing Trump, even on a personal level, attacking him on U.S. cable networks.
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And then he goes down there, has the only reception that was planned for him canceled,
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apparently under pressure from the White House.
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Basically comes back with nothing, but I don't think he should be overly surprised by that.
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And then to your point earlier about the change in attitude, not only by Ford,
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but also by Carney, you know, it seems like maybe they took a look around and said, you know,
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a lot of the relationships that we're trying to build with all these other countries
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and all the other parts of the world, those are contingent on our continuing to have a trade deal
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with the United States. It's not like, well, we're not going to be trading with the Americans
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as much anymore. And so why don't we establish trade relations with people in Asia and Europe
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and other areas of the world but a lot of those quote-unquote middle powers that Carney keeps
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talking about in this new world order they only want to deal with Canada because of our trade deal
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with the United States and so maybe it has dawned on them that it's absolutely critical that we get
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this deal done with the Americans what do you think oh a hundred percent there there is really
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two issues here one is for Canada to attract attract companies that build things and make
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things they need to have access to the us the whole point of canada's geography is one is to
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create a supply chain with value added manufacturing which would which is something
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we should be doing but we're not doing and access it to the biggest market in the world nobody's
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going to come and invest in canada because they want us you know sell a few units to a few canadian
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companies it's completely irrelevant they could do that from anywhere else in the world and just
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ship it over but the the whole strategic uh position point is to be able to access it
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to the largest economy world and the other aspect of it as we try to pivot one of the hardest things
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to explain to people is that we don't really manufacture things anymore our manufacturer
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uh manufacturing industry share of our gdp used to be over 20 percent like 30 40 years ago now
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it's around 10 so we make less and less things our productivity in that industry is dropping
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and one of the hardest things about pivoting to other countries is that the average manufacturing
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company in canada is very small so if you remove the big industries the continents such as oil and
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gas uh the resources mining if you if we remove those things the average company is really small
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it's around 40 employees or so so it's very hard for them to all of a sudden let's build things for
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someone in uh you know in france or taiwan or something this a lot of them just don't have the
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capital bandwidth to turn around on the dime as the government thought that would they would be
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able to do and let's remember out of all the mous and all the trade deals that carney thinks he's
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made or advertisers that he made there's only one binding one which is with indonesia and we it's a
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really small one and we lended them a billion dollars so they can buy canadian products
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wow he's quite the horse trader you know give the indonesians probably a forgivable loan
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of a billion dollars so that they can buy our stuff i mean that's not much of a business model
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because you're so plugged into the venture capital world,
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but I can't help but think how short-sighted it was
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for Premier Ford to rip up that Starlink contract,
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which was worth, I mean, comparatively, not a whole lot
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when you look at the value of this company, $100 million.
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But in retrospect, I mean, if we want to attract
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business manufacturing into canada whether it's in from spacex or any other company that must
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runs and operates that really that was not the smartest move what do you think no i mean doug
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ford is you know is you know is essentially a big baby with the you know has with zero long-term
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thinking is just the knee jerk reaction into emotional outbursts are absolutely ridiculous
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in a for a person in his position running essentially the biggest province in canada
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you know the first of all we don't even know how much that rip up of that satellite deal cost
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canadians because it was a penalty how much it cost taxpayers the other thing is that
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the starlink satellites they it's so much cheaper to run them and operate them than creating a
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legacy infrastructure which is what the government is trying to do you know it's you can buy a 300
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dish 400 dish and you have internet for you know your your basic subscription like anywhere else
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instead of trying to spend billions of dollars of running cables and infrastructure across the
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country. So it's a double whammy there. The other aspect of it is until Canada can actually
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start launching satellites out of the little gravel port that they have in Nova Scotia,
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SpaceX is still the satellite, the company will be launching our satellites. And it's the company
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that will be launching our low orbit satellites until then, which is what the government has
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handed out billions of dollars in subsidies too so it's uh it's it's so uh it's so short-sighted
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from what he's done but also let's remember the spacex ipo is going to make the ontario teacher
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pension fund which invested in it i think in 2019 they're going to make around 15 billion dollars
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out of it they're going to it's it's equals to tens of thousands of dollars for every teacher
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so they essentially guaranteed generational returns with that investment uh you know which
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they vilify the same person you know anytime they get which is highly unfortunate and the other
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thing is let's remember the space industry is just starting it's going to be a trillion dollar it's
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already well with spacex it's already a trillion dollar industry by market cap but it's going to
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a trillion dollar industry by revenue and operations in a few years so one of the highest fastest
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growing industries we're attacking here in canada while we're trying to subsidize
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you know a 20 million dollar gravel pit to to achieve us uh a foot into that industry
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so we're really doing some really ludicrous political decisions here while we should be
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partnering and building up as a with a relationship with the us with those companies
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and try to bring as much of it here and offshoot as much as we can canada has quite a robust
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technological sector that works with the space industry and it's all because nasa keeps approaching
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us so we can't afford to lose one of the most competitive industries that we have right now in
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the world. Yeah. And it just seems like we're on the outside looking in on so many of these
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key industries to growth industries. I realized there's a lot of pushback and the data centers
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and so forth, but early, you know, burning a bridge over what politics, you know, the idea
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of elbows up and we got to look because Elon Musk is a friend of Trump's or we have to cancel that
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contract and what we end up giving telsat all sorts of money yeah you know it's it's like a
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daycare running like you know our institutions which is you know it's just so insane it's just
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so stupid i've got to ask you as well i mean you're out in alberta and i mean and i know that
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you feel that kuzma will not be scuttled but if that does happen you know what impact will that
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have on the independence movement in alberta do you think if we lose kuzma yeah if we if we lose
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kuzma which again as you said i don't think it will happen just because the it will just require
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too long too much work to redo the same agreement it's it's much easier just to work out a few
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uh kinks and points in it so um if but if kuzma again some is at any kind of risk or whatever
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know first of all canada will drop right into a recession the you know there is even a full-blown
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depression you know there is there is there is no second thought to that uh it's it's highly risk
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it's high risk situation for us and if that happens the you know to in alberta i think the
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independence movement i think will grow and the reason is most of our trade is done with the us
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Alberta has a kind of a different economy from a dollar perspective.
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And about a quarter of our economy only comes from Canada itself.
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Most of our economy comes from consumption and we trade from the U.S.
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So, you know, there's more risk to us losing favorable access to the U.S.
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than losing anything that's got to do with Canada, which I don't think will happen anyways.
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So the independent movement would definitely grow.
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People start realizing what it means, what our economy looks like,
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and what our trade relationships look like with the rest of the world,
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Yeah, I mean, I would think that if Kuzma fails,
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well, maybe if we go our own way, we can negotiate our own trade.
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trade deal with the americans have a lot more success than say canada has which is unfortunately
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uh preoccupied with elbows up yeah and i mean and let's look let's just look at the basic fact
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we want the pipeline to the west coast canada and bc says no to us says yes you know bring it down
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south they already approved one to construction one pipeline which was the old keystone excel
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uh part of it is going to be rebuilt and they're open for more to change regulations to allow that
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specifically so when you have our own country saying no to us and you have to spend 30 billion
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dollars in carbon capture for no particular reason so you'll be allowed to develop your
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industries and the other country next you which is the us saying let's just get building you know
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Kirk, thank you so much for coming on the show.
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We really appreciate your insights on all these issues.
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