Juno News - December 05, 2025How Canada Sabotaged Its Own Economy
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Summary
Alex Brown speaks for the House of Commons immigration committee on Tuesday, where he laid the blame for Canada s high unemployment, failing economic productivity, a failing economic system, and a poor housing market at the feet of the Liberal government's temporary foreign worker and international mobility program.
Transcript
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Hi, Juneau News, Alexander Brown back for another episode, host of Not Sorry, writer,
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communicator, campaigner. Always thrilled to be here. And while you are here, take advantage
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of our promo code. I know a guy who'll hook you up. It is me, junonews.com slash not sorry for
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20% off. I spoke for the House of Commons Immigration Committee on Tuesday, where I laid
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the blame for Canada's high unemployment, the failing economic productivity, failing
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health care system, poor housing market, and low public opinion of Canada's immigration
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system at the feet of the Liberal government. On the temporary foreign worker and international
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mobility program front, it wouldn't be wrong to view these programs, for example, as distortionary
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government subsidies or welfare for unproductive businesses. The effects disproportionately harm
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younger Canadians who are priced out of the labour market. As former Bank of Canada Governor
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David Dodge has warned, the last thing we want is a bunch of low productivity businesses
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hanging on because we provide them cheap labour. Not only then is that bad for Canadian productivity,
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but there's also a big risk that it contributes to wage suppression and job displacement for Canadian
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workers. Can you tell the theme of the episode yet? Moreover, Canada's delusional quest to replace
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US trade, it isn't going well. We've now even been passed by Mexico as our neighbour's top export
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partner. As Tristan Hopper writes, virtually every economic analysis on the issue of trade
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diversification has concluded that although it's a good idea in principle, Canada remains a country
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whose prosperity has been disproportionately owed to the fact that it happens to sit atop the most
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powerful economy in human history. And there's word now that Trump may soon use the USMCA withdrawal
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as a bargaining tactic. Trade experts are warning and that could be another curveball for us.
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The layoffs are mounting. This situation is not improving as 1000 workers at Algoma Steel were just
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handed pink slips before the holidays. The excuses for not securing a trade deal, for continuing so much
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of the status quo, it's harming Canadians and their pocketbooks. Let's talk to Professor Ian Lee of Carleton
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University, a frequent Juno guest. He's a wealth of knowledge when it comes to diagnosing our economic
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woes for a poli-sci student like myself. And first, a word from our sponsor.
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Folks, I want to take a minute to thank today's sponsor, which is Macamie College. So Macamie College
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successful in enrollment will get a $500 scholarship from Juno News. So apply using our link. It's in the
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description. You can go to CandiceMalcolm.com slash Macamie. That's M-A-K-A-M-I. And if you apply
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through that link and you're successful, you get a $500 Juno News scholarship. You know, I went to the
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University of Alberta and studied political science. And the thing you realize when you're doing a
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university degree is that it doesn't lead you to a job. And so for me, after three years of being a
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political science student, I looked around and realized I had no job skills. I had never worked in
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politics. Everything was theoretical. It was all in the classroom. And I had to start working on
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political campaigns just to get my foot in the door. The hard thing about politics is that you need
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experience to get a job, but jobs require experience. And so doing something like this, I mean, the fact
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that you can do it online, the fact that you could do it on the evening is really helpful. If you're
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interested in politics and you're watching the show, I presume you are, this is something that you really
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something like this. So again, check out this link at CandiceMogel.com slash Mackamee College.
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Professor Ian Lee of Carleton University Sprott School of Business joins us again. Professor,
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thank you. My pleasure, Alex. Professor, a thousand workers were just
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handed pink slips at Algoma Steel. I believe that takes us to close to 41,000 total directly impacted by
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this protracted tariff situation. That's not much of a Christmas present for thousands of families.
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Is it time to park some of the political gamesmanship and make a deal here?
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With, you mean the United States? Yes. Yes. I do. I do. I have argued
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a couple of points, very big picture. I've been, I've given a couple of papers actually in the last
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little while, I testified before the Senate House Committee, Finance Committee and the House Committee
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as well, that I argue that we have, we Canada, that's not the real we, Canada, Canadian governments
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have made a big mistake over the last approximately 60 years since roughly the time of the auto pack.
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And we have gone down a rabbit hole that we believe that we could, using government regulation
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and subsidies, corporate subsidies, we could lift up the manufacturing sector at large into becoming
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a major international player, a competitor. And I would argue in defiance of the laws of economics.
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I say that because we're a small country, even though I think a lot of Canadians are confused by the,
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I mean what I'm saying. We think, well, because we're gigantic geographically, and we are,
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we think, well, that means that we're the same power and importance as the United States. We're not.
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They're 32 trillion, we're two and a half trillion. You know, we are, as Pierre Trudeau famously said,
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you know, we're, they're the 10 ton elephant and we're the mouse. The elephant sneezes and the mouse
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catches pneumonia. So we made a very large mistake in going down that road, chasing the manufacturing
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rabbit, going down the rabbit hole, pouring billions and billions, not just on auto industry,
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Bombardier, and many other similar attempts to try to create an industrial policy. At the same time,
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we denigrated and sneered at and dismissed our resource sector saying it was low tech, it was dirty,
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it was, it was 19th century, it was hewers of wood, drawers of water, wrong way to go. And yet,
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we have trillions of dollars in natural resources. And we have a comparative advantage in natural
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resources. We do not have a comparative advantage in manufacturing because we're too small. We're
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smaller in the state of California. And yet, from the, throughout my entire lifetime, my adult lifetime,
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from the sixties on through, I mean, I was a kid in the sixties, we've been trying to, you know, create
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these superpowers, if you will, whether it was in Bombardier or General Motors and the auto industry and so
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forth, in, in pursuing that while we were deliberately suppressing our natural resource sector. And this
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culminated in the last 10 years, in the Trudeau years, where we were, we developed very clear policies
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to suppress the development of natural resources. Well, now the chickens are finally coming home to roost.
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And we are coming up against the reality that we are not $32 trillion GDP, we're a two and a half
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trillion dollar GDP. And so I think we're realizing the, slowly, but most assuredly,
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we're realizing the futility of this idea that we can direct and create through industrial policy,
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we can create chosen instruments that will do our beck and call and become world-class competitors.
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And we're learning that that's not, we don't have that scale, we don't have the economies of scale,
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we don't have the comparative advantage. And now we're running up against the reality,
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that reality. And so we have to do a deal with the United States that I think plays to our strengths,
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which are natural resources and critical minerals, and not to pretending that we're going to be a
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world-class manufacturing superpower along with China, Europe, and the United States, which we never
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were, are not now, and never will become. Yeah. And I think of, and I'm reading about it recently,
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even Diefenbaker's push in the, I believe the fifties to strengthen trade ties with the UK were,
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were failures due to sort of, it was just from the jump, there was the overwhelming advantage of
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trading with the US. Can you elaborate on why similar diversification attempts by, by, you know,
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previous governments, why they too failed, we can obviously look at today and look at the self
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sabotage of the last 10 years, but maybe a little history lesson for our viewers.
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I, I, I'm going to use a fancy term. Um, and, and I want to use this term and I'm saying it with a
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bit of a smile. Okay. Um, and it's, it's the big fancy academic word propinquity.
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Propinquity is a big fancy word, which means being close. Okay.
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And a famous American president, John F. Kennedy, who had a quite a sense of humor,
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even though I didn't always agree with his policies. He said, nothing propinks like propinquity.
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In other words, nothing beats being close, closer than being close. Okay. Let me bring that down to
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brass tacks and see, explain what I'm talking about. Let me state the obvious. The United States is right
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next door, 9,008 to 9,000 kilometers right next door. 90%, 90% of Canadians live within 150 kilometers
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of the U S border. So, and there's all kinds of people literally going back to Pierre Trudeau and
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the third way it was called. We're saying, no, no, we're not going to trade with those people.
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They speak the same language. We're on the same continent. We have the same time zones. We have
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very similar endowments in terms of the geographic endowments. And we're going to instead deal with
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countries halfway around the world, completely different legal systems, often completely
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different languages, and we're going to develop relationships with them. But this is just silly.
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And for those who still don't agree with me, I I've studied different countries that are pairs. I've been,
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I've taught in Poland from 1991 until the present every year. Well, guess who is the biggest investor
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in Poland? It's the country that it shares the border with. It's called Germany. It's not the United
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States halfway around the world. Germany is shares the East German West Polish border. I've driven through
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there in a car on road trips, and you should just see the German factories all through the East,
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the West Polish countryside. It's just stunning. Then you go and look at Brazil and Argentina,
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or Argentina and Chile. You tend to trade over centuries with the people next door. In fact,
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you get intermarriage. You get cross immigration. You look at Elsass Lorraine, which went back and
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forth between France and Germany for 500 years. I've been quite a few times there. And the trade and commerce
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between Elsass Lorraine, between France and Germany is just, it's just stunning how obvious it is.
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And so people that are trying to say, let's deny geography. Let's deny it. Let's pretend we're not
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next door to the United States. It's silly. I mean, geography, you know, that famous phrase,
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geography is destiny. And there's a reality to it. I mean, I've crossed that border without
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exaggeration since I was a child. I grew up in Eastern Ontario. I estimate I've crossed that
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border probably 600 times. Imagine. I mean, we will go down in the 60s. I was a kid and my parents
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would say, let's go for a picnic lunch. And we'd go down onto the US side. We'd cross over at Prescott,
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and we'd cross over for the day. I mean, I've gone so many day trips to the United States,
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it's not funny. And that's just the propinquity factor. They are right next door. And they speak
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the same language predominantly. They're predominantly English as the majority language.
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Same here. English common law there. English common law here. We have many of the same
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companies in both sides of the border. So of course, we're going to trade with the United States.
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I'm not saying we shouldn't try to diversify our trade. But there are people who really think that
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we're going to go from 70% to something close to zero. And I just think it's delusional.
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If we can get from 70% down to 60%, that'll be stunning.
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Yeah. It strikes me that the outlier, I was reading over some data before talking to you,
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it's Austria and Germany. Austria has a kind of a balanced dependency on Germany where it's actually
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one third. That's very impressive. But of course, you have all of Europe right at your doorstep.
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When you're sharing it with your neighbor, same thing with Mexico and America, it's like you tend
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to do all your work with them. And what strikes me as crazy as a non-business-minded individual is
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we're even framing our US trade ties right now as a vulnerability, not a strength, a vulnerability.
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And we're focusing on these non-binding agreements with regions like the Middle East and Africa.
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We're talking seemingly exports of 1.6%. On what degree of delusion is this? Can we make up some
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of that number in the aggregate? You're absolutely right. In fact, I would argue,
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and I don't belong to any political party. I don't donate money to any political party.
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But the vision of what some journalists have called, I think correctly, the Laurentian elites,
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who are the political decision makers in Toronto, Ottawa, and Montreal. Not the corporate elites,
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but the political elites. They've had this vision literally since the 60s that the United States was
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not that good of a country. Maybe we should try and deal with them a lot less and go somewhere else.
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And it became the politically dominant viewpoint. And without looking at the sheer scale and size of
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the United States, all of the natural advantages of the north-south trade flow that occurred between
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the two countries, and imagined that we're going to go halfway around the world to trade, notwithstanding
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the incredible transportation barriers, the costs, the logistics, the time zone changes.
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And I'm saying this for anyone listening who might say, well, that Ian Lee is a real ethnocentric guy.
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I've taught in Europe over a hundred times, probably more than 99% of Canadians.
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I've been teaching in China every year since 1997. I've traveled around the world many, many, many times.
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I've been to the United States in 44 of 50 states on road trips. So I've been to a ton of countries.
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I'm not ethnocentric saying we shouldn't deal with those countries. Of course we should deal with
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whoever we want to trade with. But the reality is because of the propinquity factor of being that
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they are right next door and there's lots of similarities between the two countries. Yes,
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there's differences between Canada and the United States, but there are many, many similarities.
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And so I think that those blinkers of the Laurentian elites have caused us to see the United States as a
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quote, threat. Instead of saying we just had the wrong package over the last 60 years, we were trying to
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become a competitor. Imagine a competitor of the United States, which is just as far as I'm concerned,
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is just madness on steroids. Instead of saying we should be a partner, they need certain things from
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us. They've always needed natural resources. And we should, right now they need desperately,
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they need critical minerals because China has them by the throat hole. And the United States has a
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desperate shortage of critical minerals. We should be talking about this almost every day of the week.
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Instead of saying, how can we move away from the United States? Why don't we say, well, what do they,
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what are they good at? They're obviously a manufacturing superpower. There's three in the
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world, China, Europe, US. We're not, we're never going to become one, no matter our delusions and
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thinking that we can. So let's give up those silly delusions and say, we're not going to try to
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continue to pour billions of dollars down a manufacturing rabbit hole, trying to turn us
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into something we will never become a manufacturing superpower. So yet we've got trillions,
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literally trillions of dollars in natural resources. And I don't just mean oil and gas.
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We've got timber, we've got electricity, James Bay, we've got nuclear, we've got potash,
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we've got agriculture, we've got critical minerals. And yet what have we done for the last 60 years?
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We've tried to suppress our natural advantages and artificially create an advantage we don't have,
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never did, do not now and will not in the future. And we still are, there are people in Canada
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perpetuating this false vision for the future of Canada.
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And standing in a way seemingly, even now of a moment where we claim to be serious about major
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projects, where we're sending mixed signals on memorandums of understanding.
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Yeah. Okay. I'll let you, I'll let you build a pipeline to the coast, but the tanker ban stays
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in place. Well, it's like, well, where the heck is it supposed to go? And so it's incredibly frustrating.
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And these, these carny trade missions, they've resulted in, I believe Tristan Hopper in the post
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used the term non-committal bromides to borrow, to borrow a quote there rather than substantive deals.
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In your view, what metrics should Canada use to evaluate the success of, of this kind of
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international outreach? And if you're a business leader, you know, how could you influence a more
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effective outcome right now? I mean, I use the phrase, I use it with my students all the time.
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I said, you know, we economists and policy analysts try and make this into something very,
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very complex. And I'm, I'm a very simple guy. Cause I grew up on a farm and many, many years ago,
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and I believe in this thing called arithmetic. I tell my students, I can't, you know,
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calculus is too complicated for me and algebra is too complicated. Let's just stay with arithmetic.
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Cause I understand one and one is two and two and two is four and so forth. So I look at the United
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States and I say, okay, there's 196 countries in the world. We could trade with all of them, right?
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Cause they're all equally useful for Canada. Well, wait a minute. The United States is 32 trillion.
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There's no other country on planet earth that is even close to the United States.
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China's 20 trillion, far, far behind. And then you look at Europe. Okay. They're about 19,
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20 trillion. And then everybody else falls down to single digits and they're halfway around the
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world. There's more arithmetic. There are thousands and thousands of kilometers away. They have very,
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very different legal systems. They have very, very different cultures, very different languages.
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And so when you look at these herd realities, I mean, and yet there are people who want to deny
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these realities. The U S is right next door. It is the largest economy in the world. It is the modern
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Roman empire. It is the role today that was played by Rome at the time of Julius Caesar and Augustus Caesar,
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the dominant superpower in the world. And we're talking about running away from there and going halfway
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around the world where we've never had a trading tradition with any of these countries. And they're very
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small GDPs. I mean, these are countries that have single digit GDPs. You know, it's just stunning that
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people can live with these delusions and kid themselves that we are going to suddenly stop
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trading or slowly stop trading with the United States and go halfway around the world and start
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trading with countries we've never traded with at that level or magnitude. It's not going to happen.
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So where are the business voices vocalizing the opinion that you are now? I mean, I,
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it makes a ton of sense to me in our audience and it's great to hear, you know, such a champion of
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common sense, but like, is anyone doing this right now in, in our business lobby? Is anyone saying this
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I think I'm not as critical as you are on that point. I mean, the Chamber of Commerce has been
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making the argument. I've certainly read their, their position papers and they have made some
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arguments. Look, the United States, we're going to continue to trade with them in a very major way.
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There are some voices out there, but I take your point is very well taken that the voices are not
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loud enough. They're not strong enough, not enough of them to state these, these realities.
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And I get that they're scared. They don't want to be branded as traitors or something right now from
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perhaps the elbows up crew, but it would be so great to hear this on a day-to-day basis from,
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And, and I think we have to, I mean, I just went out and gave, I, I, I'm giving presentations to
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business associations and business community, uh, in the business community and so forth.
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And, and I'm talking about this and I'm always, I'm amused, I guess is the right word,
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by the normal people said, what are you talking about? We can't have a made in Canada car.
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You know, yes, we can. I said, have you looked at the global R and D just for the auto manufacturing
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industry. I've got the data. It was done by the European association of manufacturers. That's
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Volkswagen and company 150 billion euros last year. That's a year. That's not cumulative to the beginning
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of time. That's the amount spent in the world by the 10 largest auto manufacturers for R and D to
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build cars. That's $200 billion a year. And then I looked up the capital because you've got to build
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the factories and buy the technologies to actually make the cars. Once you've done the R and D on
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developing a new car and it's close to another a hundred billion dollars now. And we're talking about
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Canada where we make 1.8 million cars a year, 80% are exported to the United States. Okay. So we're talking,
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making a half a million cars a year and you've got to put billions and billions into R and D and
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capital expenditures. It's just not, it's not on the arithmetic doesn't work. The numbers don't add
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up, but we're, these are people dealing at the up at, you know, at 50,000 feet without looking at any
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of the data to say how feasible, how credible, how realistic is this? And I think it's driven by,
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because there's so much anger at the United States. It's always been an anti-Americanism
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in Canada all my life. Part of the identity. Yeah. And Conrad Black has written about this
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extensively, but with Trump it's become exacerbated. And so people are being driven by their anger and
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their emotions, not by logic or the evidence-based reality of who we are and the fact that we are next
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door to the world hegemon, the world's most powerful nation on planet earth.
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Yeah. Professor, I want to wrap with this question because you're not the only one giving
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presentations right now. I testified before the House of Commons Standing Committee on Citizenship
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and Immigration Tuesday. One of the concerns I voiced was that of David Dodges, the former GBOC,
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who has warned coming out of our immigration moonshot as of 2021, that the last thing we
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want is a bunch of low productivity businesses hanging on because we provide them cheap labor.
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Not only seemingly with that continuation of sort of the large scale temporary cog economy
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be bad for productivity, but there's also a big risk that it contributes to further wage suppression
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and job displacement for Canadian workers. I appreciate the concerns of our business lobby. I get that
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I was on the panel with a guy who was looking for welders and I'm saying my remarks and he's going
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like, come to my factory in Quebec. I can't find people. So I appreciate the high skill, the need there,
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but how do we balance what our companies are telling us that they need while also realizing that
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we surely can't go continuing down this path of creating this sort of surf-like economy?
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Okay. I understand completely. First off, I do support immigration. I support controlled immigration.
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Same. Okay. For the last 10 years, I will use a very, very strong word. I believe that the
00:24:36.480
government of Canada, the Trudeau government, sabotaged our bipartisan agreement that ran for,
00:24:43.440
from the 60s until the last 10 years, a very strong bipartisan recognition of the need for controlled
00:24:52.000
immigration that serves the interests of Canada. Brian Mulroney famously said, we're a nation of
00:24:57.680
immigrants and we need to bring in immigration to serve our needs. So I'm very much in the school that
00:25:04.320
we're not doing immigration as a social benefit for the world. We're doing it because it's in our
00:25:11.760
national interest. And that means then we have to identify where the interests are. And I agree with
00:25:17.280
David Dodge. And I, and I think that what Mr. Trudeau did, and I'm not trying to pick on him,
00:25:21.600
it's just, he did announce the policies. They tripled immigration and they went from a policy,
00:25:26.880
an immigration policy. And this has been written up by immigration scholars, where we went from a point
00:25:32.800
system that brought in people with high skills, you know, engineering, for example, engineering skills,
00:25:38.960
not just one, there's many others. And we went from one extreme to not extreme,
00:25:43.680
but we went from that very targeted policy approach to bringing in people that were very unskilled,
00:25:50.160
low skilled and uneducated or very poorly educated. And, and I thought it was an enormous mistake
00:25:57.200
because now we brought in people that are low productivity at a very time when our productivity
00:26:01.600
has been collapsing and declining precipitously. And so I'm not one of those people who say,
00:26:07.360
shut down all immigration. What we have to do is return to a system of immigration that's controlled
0.97
00:26:14.640
and that serves the interests of Canadians and is based on the needs of the, of skills,
00:26:20.880
the skills that we don't have. Just, I want to give you one little vignette. So people don't think
00:26:25.440
that I'm just being personal about Trudeau at all. Harper passed a policy that said, which I had
00:26:32.320
strongly supported for a long time saying that if you come to apply to come to Canada,
00:26:36.640
it is one of the conditions you must have along with the other, the points and the skills,
00:26:40.960
you must be already fluent in English or French, one of the two official languages.
00:26:47.360
And I just thought this was just the most obvious policy you have, because if you bring someone in
1.00
00:26:52.160
who can't speak English or French, that means they cannot work because the reality is that's the
0.92
00:26:58.560
language of this country, English and English Canada and French and French Canada.
00:27:04.000
When Mr. Trudeau came into power, he removed that requirement. And so we brought in all kinds of
00:27:08.960
people who can't speak English or French. So what are we doing? We are condemning them and exploiting
1.00
00:27:15.040
these people, hurting these immigrants by forcing them onto social assistance because they can't work.
00:27:21.440
You know, speaking a language of from, you know, from so halfway around the world that isn't spoken
00:27:29.280
in Canada will not allow you to work anywhere in Canada. No. And it means you're not going to
00:27:33.680
integrate either, right? Like you're going to balkanize within, within a small community,
00:27:38.240
but you're increasingly less, you know, the argument is, well, we're sensitive and we're compassionate.
00:27:42.800
This policy was not compassionate. This policy I thought was viciously discriminatory towards
00:27:49.840
vulnerable new Canadians who had no idea when they came here, what the country's like,
00:27:54.640
because they're from halfway around the world. And we said, come on in, come on in. Everything's
0.92
00:27:58.160
going to be fine, you know, and, and they couldn't speak and get a job. And so I don't call that
00:28:03.840
compassionate. I just call that it's a form of discrimination against vulnerable immigrant
00:28:11.200
Canadians. And we should bring back that rule that says you must be fluent in either English or French
00:28:17.200
so you can function. The moment you hit the ground in the country, completely agree,
00:28:22.640
produce this and destructive policy that was, uh, developed, uh, some eight years ago.
00:28:27.520
I'm in the hub with Dr. Michael Bonner, who worked on the immigration file, arguing the same thing,
00:28:32.640
where even the United nations condemned our, our explosion in the last few years as a modern form
00:28:37.920
of slavery, where we can't, the liberals can't pat themselves on the back for what is in essence,
00:28:43.200
a basement apartment economy. And there are 15 people to those basements. And so lots of common
00:28:48.880
sense, professor. Thank you. The word of the day, everybody is propinquity. Let's, uh, let's remember
00:28:53.760
that one. I'm going to go, I'm going to go look that up, but professor, thanks for joining us.