00:06:02.700We are not exactly on the call list from the Liberal government when it comes to leaking
00:06:07.980who's going to be shuffled in and out of which portfolios and all of that.
00:06:12.080But there are going to be some big changes.
00:06:13.720And the last reporting I've seen from CTV, the Globe and Mail, CBC, is that there are going to be seven, seven cabinet ministers who are out of cabinet after tomorrow's shuffle.
00:06:26.340Now, those seven cabinet ministers are David Lamedi, Mona Fortier, Omar Elgabra, Joyce Murray, Helena Jacek, Carolyn Bennett, and Marco Mendicino.
00:06:39.680Yes, Marco Mendicino, the man for whom 22 is not a caliber of ammunition, but an IQ.
00:06:48.060David Lamedi, the guy who thinks that the mentally ill should be able to have the state's assistance in their execution, is out.
00:06:56.260Omar Elgabra, the guy who put a punitive vaccine mandate on truckers who worked solo and in isolation at a time when there was already a shortage of truckers.
00:07:05.860He is gone and a bunch of other nondescript folks as well.
00:07:10.500So we're going to see some movement here.
00:07:12.900Now, I just saw moments ago before I went on air a Toronto Star piece that says there are going to be 10 new faces promoted.
00:07:20.840And there was another story I saw in CTV which said that pretty much everyone is getting changed.
00:07:26.720There are only a few people that aren't.
00:07:28.460Now, the downside of this is that Bill Blair, it sounds like, is going to be the defense minister.
00:07:33.880Now, I thought the really fun alternative would have been Patty Hajdu as defense minister or Mark Gerritsen as defense minister.
00:07:41.740Defense minister, not good for the country, but would have been entertaining and would have given me some material to work with here.
00:07:47.660But I do have, I mean, it's a very serious thing.
00:07:50.760And just to take a moment here and be a bit more somber, I don't celebrate anyone losing their jobs.
00:07:57.240And I thought it would actually be appropriate to give a bit of a proper, solemn and sincere send-off to the cabinet ministers who are departing tomorrow.
00:08:27.240Na-na-na-na. Na-na-na-na. Oh, Marco, goodbye. Yeah, don't let the door hit you on the way out.
00:08:39.740Listen, I do not celebrate people's demises, but I am not going to shed a tear for the people who
00:08:46.480have been responsible for the most heavy-handed and Orwellian infringements of civil liberties,
00:08:53.680of free speech of mobility rights being told that they no longer have a place in the government of
00:09:00.680Canada. But of course the one little send-off that the Trudeaus give them is that they get to come up
00:09:05.780with a reason why they're being turfed. This was Omar Al-Ghabra, the former transport minister now
00:09:12.600who's resigning from cabinet altogether, explaining why he is leaving cabinet.
00:09:18.260after almost 11 years as a member of parliament two and a half years as a minister and six
00:09:26.300elections i've made the difficult decision to not run in the next election until then i will
00:09:31.800continue to serve the constituents of mississauga center as their member of parliament as a result
00:09:36.720of this decision i'm also stepping aside from my role as minister because the prime minister
00:09:41.500deserves a cabinet who is committed to running in the next federal campaign as the minister of
00:09:45.780transport. I helped lead our country through many challenging issues. We
00:09:49.900protected Canadians during COVID while supporting the transportation industry
00:09:54.180during an extraordinary period. We worked on reforming our aviation sector by
00:09:59.880enhancing transparency and accountability. We worked on improving our supply chain
00:10:05.280and established a supply chain office that will advance resilience and
00:10:09.600efficiency within our transportation network.
00:10:13.560We are moving closer to making the dream of a high frequency
00:10:17.920passenger rail that connects Quebec City to Toronto a reality.
00:10:21.780Those are just few examples of the important projects that I
00:10:25.740had the honor of working on that are important to Canada.
00:15:10.860anyone in my cabinet by definition has my confidence so it stands to reason that anyone
00:15:22.420not in his cabinet does not have his confidence and i'm probably going to play that clip again
00:15:27.620tomorrow because when you see all the people that are being demoted that are being pulled
00:15:32.140out of cabinet it actually doesn't sound all that surprising that justin trudeau may be saying that
00:15:37.560okay, these folks are dead weight and have to go. So if us were seeing Marco Mendicino is out,
00:15:43.020David Lamedi is out, Joyce Murray, Carolyn Bennett, Helena Jacek, all of these people,
00:15:48.360I mean, only a handful of them have used that I'm not running again excuse. So the ones that
00:15:53.640are running again, but are either demoted or removed altogether, this is Justin Trudeau
00:15:58.560saying without saying that they are actually morons or failures or that he does not have
00:16:04.600confidence in their performance so look are these people running not running again because they
00:16:10.480believe that the Trudeau government is a sinking ship or are they not running again because they've
00:16:15.340been told this is the way you get out by saving a little bit of face or is something else entirely
00:16:21.160happening here like I'm convinced that Jagmeet Singh is going to keep this government alive
00:16:26.340until 2025 that he's not going to pull the plug on it because he knows that the next election
00:16:31.220means the next loss, which means he's done.
00:16:33.620He's got no real ability to stay on as NDP leader after another loss.
00:16:38.960Trudeau knows after he's got to either get a majority or he's out.
00:16:42.960So he needs to either call the election when he thinks he'll get the majority
00:16:47.440or engineer something that forces the liberals to keep him in power.
00:16:52.300So maybe he thinks that if the economy is going to get worse and worse,
00:16:55.640that his path to staying in power is a fall election.
00:16:58.600or maybe he realizes that he's actually just got to milk this supply and confidence agreement
00:17:02.780to 2025 because then he'll get two extra years in power as opposed to zero extra years. I'm not
00:17:09.240going to claim to have a crystal ball but I will say that I mean like Jagmeet Singh I have no balls
00:17:16.020here I don't have the ability to see the future but what I am going to say is that there's not
00:17:21.320going to be a way forward for the liberal government without something majorly changing.
00:17:28.780And I'm sorry, but you can put some like, you know, disinfectant and room spray and
00:17:32.920try to make this, you know, the House of Commons and the cabinet room smell a little bit better,
00:17:37.100but you're not going to be able to turn around a fundamentally flawed government whose direction,
00:17:44.800whose path that it's proceeding in has been as dangerous and damaging as it is.
00:17:49.900And I mean, Chrystia Freeland, who it sounds like from the reports I've read, is staying in power.
00:17:55.520It sounds like she's staying as finance minister.
00:17:58.400When she goes out and about and is talking about, oh, inflation is so low and everything's great.
00:18:03.460I mean, that is not translating to the real world.
00:18:06.920That's not translating to the real experiences of people in this country.
00:18:11.060And I mean, this is actually a good segue into this report that came out from TD.
00:18:15.600and we invited the author of the report who I don't actually believe responded at all I mean
00:18:20.580maybe they declined but I don't think they got back to us at all which is unfortunate because
00:18:24.540I'm a TD client I give TD a lot of money but TD has said Canada's standard of living
00:18:30.520is falling behind and this report talks about the fact that well there may be some on paper
00:18:36.480economic growth in this country it's not translating in the real economy to real
00:18:42.120prosperity for real Canadians. And I think this is a very important report because it's saying
00:18:47.660that Canada has been lagging behind the U.S., behind other advanced economies. The money quote
00:18:53.160here, no pun intended, from the report author, economic growth does not necessarily equate to
00:18:58.820economic prosperity. I want to unpack this and some of the other economic trends a little bit
00:19:03.440more here with Philip Cross, who is the former chief economic analyst at Statistics Canada and
00:19:10.040is also a monk senior fellow in economics for the mcdonald laurier institute philip always good to
00:19:15.540talk to you thanks for coming on today thanks for having me back andrew so i mean let's first off
00:19:20.340talk about the sales pitch that the federal government is giving here which is that everything
00:19:24.460is great i mean that is probably the least convincing pitch if you talk to real people
00:19:29.240in this country but what is it they're drawing from that's making things look so rosy as an
00:19:35.980Economist, frankly, I'm a bit at a loss, probably that the unemployment rate is at such a low level. And a lot of that reflects more that a lot of people left the labor force that we're having trouble finding workers and finding people to do jobs, not that the economy is booming.
00:19:53.220if you look at any other metric whether it's
00:19:57.380gdp growth incomes inflation and in particular if you look at the most dynamic sectors of the
00:20:04.500economy the ones that determine our growth going forward which are business investment investment
00:20:09.140and exports we're way down the totem pole on these measures yeah and i i think this td report i mean
00:20:17.380obviously the banks have their own forecasts and you know you could find three economists
00:20:21.220and between them perhaps five opinions on what's happening in a particular country here but i think
00:20:26.980when we're looking at the way that we're lagging behind other advanced economies on standard of
00:20:32.100living that that's very key here because a lot of the times we've been told uh by our government
00:20:37.060that oh well you know when we compare ourselves to the us and the uk and european countries we're
00:20:42.180doing great but here we are we're not in that same league right now no and i'd encourage your
00:20:48.020viewers, instead of looking at the TD report, look at my report that came out from the Fraser
00:20:54.040Institute a couple of weeks ago that covered a lot of this ground, that noted that our GDP growth
00:21:01.020has fallen way behind the U.S. That was true before the pandemic. It occurred during the pandemic.
00:21:06.740And now in the recovery from the pandemic, we've fallen behind the U.S. by a good 10 percentage
00:21:12.140points in growth and as i said it's it's especially because of if you compare the the sectors what
00:21:19.100explains this difference between the u.s and canada it's especially business investment and
00:21:24.140exports you can't blame this on an aging economy you can't say that we've exhausted technological
00:21:29.260changes it's something very specific to this country and in this report basically i go on that
00:21:35.900that I think it's an increasingly anti-business culture and way of talking to firms that I find
00:21:43.960is the biggest difference between Canada and the US. Yeah, I'm glad you brought that up because
00:21:48.400you mentioned, and I think I actually pulled the quote out here, you talk about the fact that
00:21:53.100the importance of a nation's culture to economic growth. Without a culture that supports
00:21:57.620entrepreneurship and innovation, even the best policies and institutions will produce
00:22:02.260disappointing results so right now we have i think this tendency especially when we're talking about
00:22:09.140inflation for our leaders to just say well canada is a passenger in a global trend right now it's
00:22:14.180like oh there's inflation in the uk so inflation in canada is not really our fault it's everywhere
00:22:18.900whereas you're saying that in canada there actually is something that's a very specific
00:22:23.060and uniquely canadian phenomenon that's driving down growth very much so and it's because business
00:22:29.940investment in this country over the last decade has fallen 20% while in the US it's grown 20%
00:22:36.100over the same period. And the importance of business investment is that it embeds
00:22:41.620technological changes. It drives your competitors going forward. That's why again, over the last
00:22:46.980decade, our exports have fallen slightly while the US has continued to grow. So it's something
00:22:53.540very specific and it's, you know, it's very specific to business investment and exports.
00:22:58.900Yes, we've tried to fluff up growth by having low interest rates and having large government
00:23:04.660deficits in spending and having a housing boom, but none of those are sustainable in the long run
00:23:09.860if you don't have investment, jobs, and exports. We're an exporting nation. We count on exports
00:23:15.860for one-third of our income. Between exports and business investment, you have well over a third
00:23:21.300of our economy going absolutely nowhere. This is going to result in stagnant incomes over the longer
00:23:27.860term now how much i mean you talk about how culture changes slowly here and i'm wondering
00:23:33.620how much of it is really influenced by changes in government or if the culture has sort of an
00:23:39.300evolution in this country that is influenced yes but not as radically by policy changes
00:23:47.220well that's the one thing i i'm optimistic about is that culture does change slowly i think there
00:23:52.740really is a a desire or still an impulse for innovation and entrepreneurship in this country
00:24:00.340i don't think you can kill that off but at the same time you know you go back to you you talked
00:24:05.540about the td uh report economists have been recommending that governments in this country
00:24:10.740do a lot of things that the governments have actually done you know we've adopted free trade
00:24:15.780with all the major g7 countries we have the highest level of education in the g7 we subsidize
00:24:22.180research and development like crazy as shown by the huge subsidies given to the auto firms
00:24:28.340recently so we've done a lot of things and yet our growth continues to sputter and that's why
00:24:34.180i go back to saying it's probably more than just a little tweak of a policy here or there
00:24:40.340we have to go back and look at how it is we talk to the business sector
00:24:44.500internationally and in the in this country to make firms want to invest and spend in this country
00:24:50.500now i want to just preface this by saying what i'm about to argue is not at all my point but i'm
00:24:56.260trying to say you know how would the government right now federally respond to your point and
00:25:00.420they'd say well just look at the 13 billion we've given a volkswagen look at the billions
00:25:04.900we're handing out in corporate subsidies that's that's a showing our investment in business our
00:25:09.700investment in entrepreneurship what what would you say to that because that's the government's
00:25:13.940answer to you saying there's not a business climate here is to throw money at these companies yeah
00:25:17.860Yeah. Well, I think what the government really revealed itself was when the head of Germany
00:25:22.500came over last winter in the middle of a major crisis. I mean, I was in Europe last winter.
00:25:27.740Trust me, it was cold. It was cold in restaurants. I mean, they turned the temperature down. They
00:25:32.580ran out of natural gas. So the head of Germany comes over here. He asked Canada to step up
00:25:38.020natural gas exports. We respond by saying, no, there isn't a business case for it.
00:25:43.640There's news to the people wanting to buy it.
00:25:45.240Yeah. Here's a head of a fellow G7 country who we should be disposed to help out just because he's a fellow G7, never mind it, he's a good customer, asking us to increase our energy exports. And we say there isn't a business case. That's farcical. We won't build pipelines. We discourage oil and gas investment. That's the type of, and oil and gas is the largest industry in this country.
00:26:12.640Not auto manufacturing. Oil and gas is twice as important as the auto industry. So yes, you can go out and give subsidies to the auto industry. Whether or not they'll pay off in the long term, I don't know. As many people pointed out, it's not at all clear who's going to win the electric vehicle wars in the future.
00:26:33.940but you know while we're doing that we're discouraging an industry that is twice as
00:26:39.800important just the oil and gas industry by itself never mind adding in pipelines and industries like
00:26:45.120that so I think the government revealed its true colors about the way it talks to the to the
00:26:51.700business community in the way that it responded to Schultz's request last winter. Is your view I
00:26:59.260mean because to go back to the global picture here and I think inflation has probably been one
00:27:03.240of the most acute measures of of the state of the economy if you were to talk to most people
00:27:07.780because it's the one they're seeing but in general unemployment and and all of this factors in as
00:27:12.040well but but is your view that if Canada had implemented some of the stuff you're talking
00:27:15.440about that we would have been a little bit more insulated from some of these global trends over
00:27:20.440the last couple of years oh I think certainly um partly because you know uh the biggest source of
00:27:27.620inflation over the last year was food and energy and the government stands back and goes oh that's
00:27:32.540something we don't control. Actually, because we import so much food and our gasoline prices are
00:27:38.800directly linked to the U.S., every time the Canadian dollar drops, that costs consumers
00:27:44.860higher food and energy and other prices for imported goods. It's quite striking that when
00:27:51.740last winter, when the oil and gas prices blew through the roof, our dollar didn't do anything.
00:27:57.820And it's because the international community understood that our government would not allow more investment in the oil and gas industry, and we wouldn't be able to profit from that.
00:28:07.880If we had allowed the oil and gas industry to profit from those high prices, the dollar would have risen, gasoline and food prices would have come down, and inflation would have been lower.
00:28:17.680So there's a direct connection between the two.