The Blueprint: Canada's Conservative Podcast - Government is pushing demand through subsidies

00:00:00.000 Hello and welcome once again to the Blueprints, Canada's Conservative Podcast.

00:00:12.600 I'm your host, Jamie Schmael, Member of Parliament for Halliburton, Cawortho Lakes, Brock, with

00:00:16.180 new content for you every single Tuesday, 1.30pm Eastern Time.

00:00:19.560 We ask that you like, comment, subscribe and share this program.

00:00:23.100 Definitely a message you're about to hear that should be heard on ears everywhere in

00:00:27.400 the country. So please, in your social media network, tell your two friends about it.

00:00:30.720 Tell your 100 friends. Tell your 1,000 friends because, again, we need to stop the ever-moving

00:00:35.120 liberal agenda. This is one way to do that. We have a great guest coming up for you. And

00:00:39.380 of course, don't forget, you can download this program, listen to it at your convenience

00:00:43.520 on platforms like CastBox, iTunes, Google Play, and Spotify. It is out there. So today, we

00:00:49.440 bring back Greg McLean, a friend of the show, hasn't been on in a while, that's my fault,

00:00:53.240 to talk about crony capitalism, markets not creating the demand, the government forcing

00:01:00.560 demand in the marketplace. He's a great financial genius, I think. I can say that. You're too

00:01:06.940 humble to do that, but you're also the Member of Parliament for Calgary Centre. Thanks very

00:01:10.420 much for joining us.

00:01:11.040 Thanks for having me, Jamie. Great to see you.

00:01:12.780 Well, I want to start with this whole idea about government creating demand. Government deciding

00:01:18.240 which companies get large payoffs, what industries get to be the winners, and what industries

00:01:23.860 get to be the losers. And I think this is something that Canada has been very quickly positioning

00:01:29.640 itself as the country that has no problem with the government deciding what areas are going

00:01:38.560 to win, what industries are going to be the winners, where others have to fight for that

00:01:44.280 space in the market. The government is in this space right now, where they think they know

00:01:49.960 where they want this economy to go. And right now, it's a fully electric economy. I don't

00:01:54.880 know how that works exactly, because especially in certain parts of the country, we're going

00:01:58.880 to be starved of electricity in the very near future, I mean within the next five years,

00:02:03.260 unless we take some measures here to actually get some more electric supply built. So moving

00:02:08.220 fully electrically isn't necessarily the best outcome for many people in Canada. You think

00:02:13.180 about it from a vehicle perspective, we're shoveling billions of dollars into the whole electrical

00:02:18.940 vehicle supply chain here, not just at the automobile building level, but you've seen

00:02:25.660 it last week at the battery manufacturing level, $14 billion. And I will point out that's

00:02:32.660 $14 billion of spending that isn't even represented in a $43 billion deficit for this fiscal year.

00:02:39.720 So where the money's coming from? I don't know. Minister Champagne seems to be one of those

00:02:43.400 guys that's playing fast and loose with the taxpayer dollars whenever he can. $14 billion

00:02:49.080 to Volkswagen, one of the biggest auto companies in the world. I can tell you who's tipping glasses

00:02:55.720 of champagne right now. It's the shareholders of Volkswagen.

00:02:57.980 The insiders, right? It's not the regular people.

00:03:00.480 $7 billion plant that they're getting a $14 billion subsidy for. So yes, we're going to produce

00:03:05.720 batteries in Canada. Let me ask you a question. What do you think the carbon footprint of those

00:03:10.360 batteries are? Well, I can tell you it's not in Canada. We can tell you that for cobalt,

00:03:15.560 for example, you're using child labor in some circumstances. In other circumstances, you're using

00:03:21.320 fracking to get lithium, right? So fracking is okay for lithium extraction, but not for oil and gas,

00:03:27.720 which is widely available, proven, very cost effective, and something the whole world needs right now.

00:03:33.720 But you can't do that. You can only do what the government believes is right.

00:03:37.480 Yeah, and I pointed that out to Minister Champagne as well. You are subsidizing every step of the

00:03:42.760 value change here because we don't exist in most of this. You talk about critical minerals in Canada,

00:03:48.360 our representation in critical minerals is minuscule. In 2021, there was one mine in Canada

00:03:54.200 that produced lithium, and that was in Manitoba, and that was all exported to China,

00:03:59.320 because that's who owned the mine, and that's where they were actually processing the lithium.

00:04:03.960 So lithium, we're trying to jump on the bandwagon here. We need to do more lithium. Effectively,

00:04:09.320 we're subsidizing that with taxpayer money. We're subsidizing the actual processing of that. We're

00:04:14.680 actually subsidizing the battery production of that. There's the animal production ahead of time.

00:04:18.920 We're trying to get ahead of as well. These are hundreds of millions and billions of dollars per

00:04:24.760 step along the way. For what outcome? We're not sure at the end of the day, because we are picking

00:04:30.280 a direction here which is only a part of the direction of our energy future going forward here.

00:04:35.560 What about hydrogen? Why are they getting nothing, right? Like the government again is saying,

00:04:40.520 this is the technology of the future, but others have to continue to fight to get that space,

00:04:46.040 not only in the conversation, but kind of in the marketplace. Because if you were the big companies,

00:04:51.080 right, it's great to pitch your idea to government instead of the market because it's too competitive

00:04:55.080 out there. That's right. Well, I'll argue as well that the government is blowing their brains out on

00:04:59.480 this green hydrogen offshore the east coast as well. How much of the hydrogen in the world that is

00:05:03.960 actually green at this point in time? One percent. And that's because it is so energy inefficient.

00:05:10.120 At the end of the day, we're expending more energy in these supposed solutions than we're actually

00:05:15.960 benefiting society or the environment at the end of the day. I asked a question earlier about the

00:05:20.280 carbon footprint of an electric car versus an internal combustion engine car. And this is

00:05:26.120 well studied in the United States. The average electric car has a carbon footprint 1.8 times,

00:05:32.440 so 80 percent more at production level than an internal combustion engine car. This is a U.S. study.

00:05:38.920 They actually find it takes you driving, again, it's U.S., it takes you driving that electric car 20,000

00:05:46.120 miles on average in order for you to equate your actual carbon footprint with the cost of production.

00:05:53.000 So think about that. If it's a secondary car in your garage that's only driving around the house,

00:05:58.680 20,000 miles, about 30,000 kilometers, how long is it going to take you to drive those 30,000 kilometers?

00:06:04.120 And the majority of that is in the battery. And if the battery has a six-year life, think about that carbon

00:06:09.880 footprint. What about the cost of the battery to replace it if it goes? Well, the price is one thing,

00:06:13.480 right? But the reason we're doing this whole thing is because of environmental reasons. If the footprint

00:06:18.840 actually isn't going down, can't we actually say, what are we doing? What are we accomplishing here

00:06:23.560 at the end of the day? Let's follow some science and actually get towards some real solutions.

00:06:29.080 There are a lot of good environmental solutions. There are a lot of good energy solutions. Now,

00:06:33.000 we've met with the automotive industry and looked at some actual solutions going forward

00:06:39.080 and what Canada's automobile fleet needs to look like as far as the provision of power. It is not

00:06:44.840 all electric. There's going to have to be some internal combustion engines. There's potential for

00:06:49.800 hydrogen, which is the most easily replaced fuel for internal combustion engines if we don't have

00:06:55.480 hydrocarbons. It's interesting in that respect, although I think it is early in the actual value

00:07:01.400 chain right now. There's electric. Electric is going to take a component of that where it's sustainable,

00:07:06.200 quite frankly, because electric, like every other power technology, has to be sustainable at the

00:07:11.240 end of the day. It has to be secure. You've got to be able to access electricity with the same

00:07:18.040 efficiency you access the way you fuel your car presently. And that's changing. Recognize the more

00:07:24.120 demands you make on the electric system, the less supply is available for other things. Therefore,

00:07:29.880 the price of electricity will go up significantly in several jurisdictions. We're not building much hydro

00:07:35.800 in Canada right now. The only one being built is in British Columbia, Site C, 1100 megawatts. All the

00:07:42.440 power for Site C is being allocated elsewhere. When they're actually doing the expansion on the CGL,

00:07:49.400 the LNG Canada facility, they have to do it with natural gas power on the expansion because there's

00:07:55.800 not enough electricity for them to power their plant from what's coming online from Site C in Northern BC.

00:08:02.920 So we do need more electricity in Canada. The question is, where is that going to come from? And all kinds

00:08:08.040 of people have different questions. Every solution has a problem. You saw the people from the nuclear 1.00

00:08:13.640 industry in town last week, the people protesting the nuclear industry because they don't want nuclear

00:08:19.480 to be part of the mix going forward. I think especially in Ontario, nuclear has to be a part of that mix

00:08:25.640 going forward or else we're going to be in energy poverty in Canada's largest. You need that strong

00:08:30.040 base load. Yeah, you got it. That base load has to be there. One thing you also told me a long time

00:08:34.520 ago was to also follow the money, right? Like you look at what Beijing is doing to Africa, right? It's

00:08:39.720 carving up Africa. We've talked about this many times before. And what's in Africa? A lot of those

00:08:43.960 minerals that you need, some in cases, cobalt and some lithium to build those batteries that you need.

00:08:50.520 The Communist Party of China bought that Canadian company in Argentina, a lithium mine. So all these

00:08:57.080 jobs, all these dollars are going outside Canada when we have a very strong oil and gas industry.

00:09:03.080 And you look at also Europe, which is in an energy crisis right now. Some are saying a lot of their

00:09:07.960 slowdown economically is due to a shortage of affordable energy right now. And we have the ability

00:09:13.960 to get in this mix. But this this Prime Minister continues to shut down an industry. Like I said before,

00:09:20.440 that's trusted, widely available, proven and affordable.

00:09:25.480 I meet with people in the oil and gas industry all the time, given where I live.

00:09:29.800 And the associations companies say, what is the solution here that people are looking for? Because

00:09:34.440 we're trying to make sure they understand why we are part of that solution. It is one of the greenest

00:09:41.000 oil production jurisdictions in the world. We have to look at the way we produce it. We have to look at

00:09:46.760 the human rights, the security, how we treat our Aboriginal people whose land we exist upon in

00:09:52.520 order to extract those resources. We do that better here than anybody else. There's all kinds of

00:09:58.040 problems that we're addressing, historical problems that we've gone through that we need to continue to

00:10:01.800 address. But environmentally, we need to continue to progress along the path we've been on, not the path

00:10:08.600 the rest of the world has been on. So think about the accountability mechanisms built into Canada

00:10:14.200 that aren't built into state-owned enterprises in the Middle East and Russia, where the money

00:10:20.440 associated with oil is going towards other means, if you will. And I can talk about the war in Ukraine

00:10:27.080 all you want. But that is a direct result of a captive continent, Europe, and Russia exploiting that 0.87

00:10:35.320 with effectively making them dependent upon their resources. And their resources, when you go over

00:10:41.240 to Russia, take a look at the way they're produced, there's nothing environmental about it. You go to

00:10:46.200 actually Saudi Arabia, and they're actually doing very well. They're coming a long way up the curve,

00:10:51.320 but they're nowhere near where we are as far as our environmental practices go. I guarantee you,

00:10:56.040 they're nowhere near where we are as far as the human practices and how they treat people in the

00:11:01.640 production of oil and gas in the Middle East compared to how we do here in Canada. We do very

00:11:07.400 well. It is very much a people-centric, environmentally focused extraction industry we have in Canada.

00:11:14.200 We should be proud of it. We should make sure Canadians know all about it.

00:11:17.240 I couldn't agree with you more. There was an article in The Guardian, I think last week,

00:11:20.760 I had the headline here, I should grab it, basically saying that China is putting more

00:11:25.960 coal-fired power plants online every single day. There is no sign of them slowing down.

00:11:31.000 That's exactly right. Think about all the coal power they're going to need,

00:11:34.440 because we continue to offshore our production from North America to Asian producers. So think

00:11:40.280 about what we're accomplishing there. We're pushing off jobs from North America into lower cost

00:11:45.400 jurisdictions, whether that's Mexico, whether that's Asia, but right now it's primarily been Asia for the

00:11:50.840 longest time. Different countries in Asia, including India, including China, including Indonesia,

00:11:55.880 Philippines, etc. All of their carbon footprints continue to rocket skywards, but the consumption

00:12:01.960 of the products they produce come back here. So we're really just offshoring our carbon footprint at

00:12:07.160 the end of the day as well. It's still on us, the products are coming back to us, but we're pretending

00:12:12.280 that we're not part of the problem in this respect. We're actually kind of creating more of a problem

00:12:17.880 by getting production from less environmentally friendly production countries like China, India,

00:12:25.640 you know, Indonesia. These are problems we're going to have to face. And recognize as well, 1.00

00:12:29.960 I tell this to people all the time, there is no envelope around Canada as far as CO2 emissions go.

00:12:34.680 You know, the CO2 emissions that are coming around the world are going to find their way to affect our

00:12:39.240 climate as much or more than everybody else. So let's get things done like LNG offshore,

00:12:45.480 because that will reduce that need for coal in the developing parts of Asia. And they're going to

00:12:50.440 develop. Yes, absolutely. The market will provide, right? The market will find these solutions.

00:12:55.560 Also, to that point, we can't continue to get in this race where we're trying to out-subsidize

00:13:02.120 the United States or China. We just can't win that game. That's not a game we should be playing. 0.78

00:13:06.120 No. China is a different economy. The People's Republic of China has set up a system where they

00:13:11.720 can set their dollar rate and more or less set the rate that they're paying their people in real

00:13:17.160 terms as far as what people get from, you know, from working in China. We've got flexible dollar

00:13:22.840 rates in Canada and the U.S. And you think about how that's affected on a worldwide basis. What our

00:13:28.840 dollar buys in the world gets less as that dollar goes down, obviously. So our purchasing power,

00:13:34.680 our labor input becomes worth less if we inflate the dollar. That's the problem with what we're

00:13:39.560 facing right now. We can't compete with the U.S. when they're blowing their brains out,

00:13:44.200 pardon me for putting it that way, with things like the Inflation Reduction Act,

00:13:47.720 which is exactly a misnomer. It is an inflation-causing act at the end of the day,

00:13:54.120 because they're throwing money at a wall. Now, they've done this before. And they usually back

00:13:58.120 away from this kind of excessive spending after three years, because about 90%-plus of this money

00:14:03.480 that they're throwing against the wall at this point in time will hit the floor. And a lot of

00:14:07.720 companies are going to be there to pick up that money and, you know, put it in their pockets and

00:14:10.680 go, well, it didn't work. That didn't work. That's why the government should not be picking winners

00:14:14.920 and losers. And they're saying, well, you know, the 10% that'll succeed, that'll be good. Well,

00:14:19.560 think about that. Right. How many other people have to pay the bill because of inflationary pressures,

00:14:25.000 right? Yeah. Thanks for spending my tax dollars on high-risk investments. Yeah. It's kind of like

00:14:29.960 the middle class are the ones being stuck with the bills, right? Because the wealthy are well-lawyered

00:14:34.840 and have the best accountants. They can kind of move money around and hide it. And unfortunately,

00:14:39.480 there are those that are struggling to get by. And so it's the ones in the middle that are picking up

00:14:46.280 the tab for all this. And they're the ones getting squeezed. Yeah. All the time. Make no mistake. The U.S.

00:14:51.560 Inflation Exacerbation Act, if I can call it that, is going to have a giant sucking sound. It already

00:14:58.600 has as far as investments from around the world looking to take a piece of those hundreds of

00:15:04.440 billions up to a trillion dollars of money that's just going to be thrown at the wall here. And

00:15:09.880 somebody's saying, hey, here's free money to go around. I think that a lot of people- Well, who's not

00:15:13.160 going to jump at that? Exactly. The question is, where does Canada compete in that? And Canada has to

00:15:17.560 pick its spots where it is actually most effective in competing with that. And the investment in

00:15:22.920 Volkswagen is more or less us trying to match what they're doing in the United States. And they talk

00:15:28.440 about the spill-on job effects from that. Well, we've got supposedly a porous border with the trade

00:15:34.040 agreement with the United States. So if that plant was, you know, the money was spent by U.S. taxpayers

00:15:40.120 instead of Canadian taxpayers, those spill-off benefits should still be in Canada. We should still be

00:15:45.320 supplying all the other benefits. So when the Minister of Champagne talks about 3,000 jobs

00:15:50.440 plus 30,000 spinoff jobs and paying back in five years, mind you, he's making it up. Because those

00:15:56.280 arguments actually don't hold water. People have to start addressing that. Like, there's holes in this

00:16:01.880 discussion you're having all the time. Now, I know this is a bit of a joke, but, you know, Mr.

00:16:06.840 Mr. Champagne is a great salesman. He's very enthusiastic. Oh, yeah. But frankly,

00:16:11.720 I feel like I'm in Springfield and somebody's selling me a monorail. That's right. Good Simpsons

00:16:16.920 reference. What happens when the money stops? Exactly. The money's going to have to stop.

00:16:21.400 The thing about it is there's not enough money. We're already $43 billion, not counting the $14

00:16:25.480 billion. Where does the money come from at the end of the day? And where it comes from taxpayers,

00:16:30.280 but where's it going to be in the budget? Yep. You look at this current budget we're in,

00:16:33.640 there's a whole bunch of excess, excessive spending, including an extra $15 billion for the

00:16:39.160 Canada Growth Fund, $15 billion of unaccountable money one more time. Another $8 billion in the

00:16:44.680 Canada Innovation Fund, $8 billion overseen by somebody else. But all these funding mechanisms

00:16:51.720 that the Liberal government is setting up to be less accountable about where they're spending

00:16:56.360 Canadians' money. At least when you and I see things, we can do it as much as we can in a

00:17:02.120 non-opaque fashion when it's the Government of Canada. When you and I have to go through

00:17:05.320 Crown Corporations, there's a whole different process here because it's corporate information,

00:17:10.200 so you've got to get that access to information protocol involved. It is a more difficult process,

00:17:15.160 and so they are trying to make this more opaque as far as answering to Parliament, you and me,

00:17:19.720 who it's our responsibility to hold the Government to account for what they're spending. That's right.

00:17:25.320 I didn't want to bring this up, but I think because we touched on it a bit and we are running out of

00:17:29.320 time, but I think we have to bring this up. A couple days ago, it came out in the Globe and Mail

00:17:35.240 that our colleague, Michael Chong from Wellington, Halton Hills in Ontario, just outside of Toronto,

00:17:42.600 has been the target of an extensive operation by Beijing based on a vote he made in the House of

00:17:51.800 Commons regarding the Uyghur Muslims that are being taken off into camps in China,

00:17:58.280 and because he has family in Hong Kong, the Communist Party of China was essentially egged on by the

00:18:07.720 Consul General in Toronto to start to put a pressure campaign to intimidate his family,

00:18:14.520 and the Prime Minister apparently knew about this two years ago and did absolutely nothing.

00:18:18.520 Well, that's shameful, frankly, that he did nothing about it. We've got to make sure that,

00:18:22.120 as Canadian parliamentarians, that we're looking after Canada at the end of the day,

00:18:26.440 and that's our job. I think that's the job of everybody on every side of this House,

00:18:30.120 and that the repercussions when we have to make tough decisions regarding foreign powers,

00:18:35.880 that we're not prejudiced in that respect. Us or our families or our friends that might be in those

00:18:41.800 foreign jurisdictions aren't prejudiced as far as actions against them. I think it's worth noting,

00:18:47.080 frankly, and worth acting upon, and if the Prime Minister knew about it well, he should have acted

00:18:51.640 upon it far sooner than he's even indicated knowing about it. Thank you.

00:18:55.640 But what is the government getting right, then?

00:18:57.160 What is the government getting right? You tell me what the government's getting right. I can tell

00:19:00.120 you, well, you know, I like to be gracious about this kind of things, and in the budget,

00:19:05.320 the one thing they're getting right is for automatic filing of people with disabilities,

00:19:10.360 for instance, that don't have the ability to file on a regular basis. My wife works in filling out taxes 0.93

00:19:16.520 for senior citizens, and sometimes she'll get somebody who come in who hasn't filled out their

00:19:20.520 taxes in 10 years. In order for them to get their benefits, they've got to go through 10 years of

00:19:24.440 back taxes, and sometimes those people have needed benefits for a number of years and they'll get

00:19:29.560 them, and having that automatic fill-in option for people like that that aren't necessarily,

00:19:34.200 and that's, let's call it 5% of Canadians that don't have the ability to get their taxes done

00:19:38.920 for whatever reason, that's something that's a step forward to make sure that there is a more fluid

00:19:44.520 access to the benefits you get. So I always like to be gracious to make sure we do point out

00:19:49.480 when things, when some things are going well and they're actually moving in the right direction,

00:19:53.480 but on 90%, it's going terribly. Well, as I always say, you can't spend hundreds of billions of

00:19:59.240 dollars and get it all wrong, so. That's a good point. A lot of money going off the table right

00:20:04.600 now, and that is the problem. There's a lot of money going off the table, and very shortly spending

00:20:08.120 more on interest payments on the debt than we are in the military. That's another, that's a topic for

00:20:12.440 another time. We're pretty much out of time, but as you know, the guests get the last word,

00:20:15.640 so the floor is yours. Jamie, thanks for having me today. We have to address all these things,

00:20:20.040 environmental effects, economic effects, security effects. Our energy matters in Canada. We have a

00:20:25.960 great energy system. Let's not tear it down before we look at what the real solution is here going

00:20:30.840 forward, and what we need in a modern economy for the next decades to come. Because we've got a generation

00:20:37.560 that's dependent upon a secure energy system. Let's make sure we continue to have a secure

00:20:42.360 energy system for our kids, our grandkids, everybody that follows us. It should be about

00:20:47.320 adding to the energy portfolio, not taking away. Exactly. Making sure we're secure, number one,

00:20:52.280 and that those jobs are there, and the companies that are coming to invest in Canada know they have

00:20:56.840 the ability to access good, clean Canadian energy. Couldn't agree with you more. Greg McLean,

00:21:02.760 Member of Parliament for Calgary Centre. It's always a pleasure having him on the show. We appreciate

00:21:07.240 his time and yours, of course. Please like, comment, subscribe, and share this program,

00:21:11.720 important messaging that needs to be seen and heard. Of course, you can download it at your

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00:21:21.720 single Tuesday, 1.30 p.m. Eastern Time. Until then, remember, low taxes, less government,

00:21:27.000 more freedom. That is the Blueprint.

The Blueprint: Canada's Conservative Podcast - May 02, 2023

Government is pushing demand through subsidies

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