00:04:00.140Well, very often when there's government-directed projects and there's government money that's going towards those projects and there's big splashy government announces regarding the projects and the possibility of greater employment, it serves the politicians.
00:04:19.860It also serves the vested interest groups that have got government ear at the time on those projects.
00:04:30.140So, you know, that's the primary issue with industrial policy is that normally the government doesn't select winners in most of the time.
00:04:44.040We just need to go back to the $52 billion investment commitment by the federal and a little bit the Ontario government on a whole series of EV battery and EV assembly production lines that were proposed and promised.
00:05:03.180And, you know, a number of those have literally just been cancelled and others have been, you know, skimmed back or reduced or been rethought.
00:05:15.700So, you know, that's a big example there of misdirection, misdirection of time and effort.
00:05:23.460But if you look at some of the other projects, other projects on the go, you know, Pacific Link Pipeline, that's one that he has spent some time on.
00:05:32.360And I think we would probably all agree that it's a good pipeline, not just in terms of economic activity, but also it's good for national economic security.
00:05:48.060It provides optionality to the country to get products to other markets.
00:05:56.700Let me just make an observation there, Jerome.
00:05:58.460I mean there was a time when we didn't need the government to pay the bill for
00:06:03.700this thing. The last time that we, the last time that a pipeline was completed
00:06:08.480is the one that parallels the, it's called the Trans Mountain, you're probably
00:06:14.120familiar with it, it parallels the old route. It got so expensive, there was so
00:06:20.180much government interference, but in the end the private contractor walked away
00:06:25.460and now the government owns the damn thing so that didn't used to be the way we got big projects
00:06:31.720finance and built yeah no you're exactly right yeah and that's just exactly where i was getting0.91
00:06:38.720at it's unfortunate that we we can't attract private more private capital to that to that
00:06:44.420pacific link pipeline project it's unfortunate and that i think to to a significant degree
00:06:50.180is because of poor policies and very obtuse regulations that the government has set on
00:07:00.400industry that makes it next to impossible for a private company to be willing to invest and get
00:07:07.040a big project like that through. But then you get the projects where the government is pushing for
00:07:14.500supporting where unlike the the pacific pipeline there is no real strong economic case so i'm
00:07:20.580thinking the alto that high-speed rail train between that quebec city and toronto you know
00:07:26.820in 2025 they estimated that cost between 60 90 billion dollars which is a lot even for for
00:07:32.900canada even for a country our size it's a lot of money now the public uh parliamentary budget
00:07:38.980office has recently estimated the cost to be between 75 and 113 billion dollars the way this
00:07:46.820project is being planned out and the you know the the lack of a strong economic rationale has got
00:07:53.780big problems written all over it and it should not be uh it should not be uh funded with
00:08:00.900significant public money so again we asked the question whose interest is actually being served
00:08:07.540in that case yeah well again i mean it would be the uh the interest of the of the uh uh
00:08:16.340organizations the businesses the unions that will benefit from this type of uh from this type of
00:08:21.940project um but what we need is that we need determine is this a benefit to canada overall
00:08:28.420uh especially the type of money we're talking about um now in some some of these climate
00:08:33.780commitment policies well the benefit will be um you know towards meeting some un type climate goal
00:08:42.820which you know one can really question the the uh how how you know how practical or practical or
00:08:52.500even how even um it is easy to to meet and whether it can be met in in a normal situation and you
00:09:00.900know i think that's a fair question to ask so yeah there's there's just you're you're right in that
00:09:06.580in that a lot of these projects that are going ahead um it's fair to question are they going
00:09:12.260to be benefiting canada on the whole and on a net positive basis or not well it certainly does have
00:09:19.140the appearance that we have a politician well mr carney the prime minister who wants to achieve
00:09:26.900things and they want to be spectacular things which will enhance his reputation that doesn't
00:09:32.900it seems to be an entirely secondary consideration as to whether there will be an economic return i
00:09:38.740mean i'm sure a high-speed rail between you know toronto and montreal will be a wonderful thing if
00:09:43.860you whip up the up the st lawrence at 130 miles an hour but if it in fact goes that fast uh
00:09:51.460At what price? At what cost? And who is benefiting? It is a political trophy, I suspect. I think you're implying the same.
00:10:03.640And again, when we create a system of building pipelines, for example, that makes it so difficult for private enterprise, which has always done these things in the past, to actually do it and make a profit at it.
00:10:17.960but only the government can do it, again, what we're seeing is an aggregation of economic power
00:10:23.740to the center, and the center is controlled by the government of the day, in this case,
00:10:29.620in the person of Mr. Carney. So are we building an economy that, frankly, looks something like
00:10:37.860the old USSR, but maybe a little bit more efficient? Yeah, well, yeah, we're abandoning
00:10:44.080market-type policies, for whatever reason, I think what's going on is that government
00:10:51.460intervenes with policies in the marketplace, and they say, oh, there's some sort of market
00:10:56.260failure, or we can do this better, and then it creates distortions. Very often, they're
00:11:01.220unintended consequences, and so the government has to go in and intervene again to try to fix
00:11:07.200some of those unintended consequences, and it snowballs. It keeps on going like that,
00:11:13.800getting larger and larger and larger but what we need is that we need an environment where we
00:11:20.200lay out some rational efficient regulatory permitting rules okay we provide some predictability
00:11:29.180for businesses and we don't say no we like you we're going to give you more money and we don't
00:11:35.280like you so you're at the end of the queue you're not on our priority project list we let the market
00:11:41.640decide is this a commercially viable opportunity that's where the wealth creation occurs is when
00:11:49.580it's a commercially viable opportunity not necessarily when it's a project that goes
00:11:55.380ahead because it's been subsidized or there's very generous tax credits that doesn't necessarily
00:12:00.900that doesn't improve wealth creation or to a lot lesser degree so we're getting away from letting
00:12:08.340the market do what the market does best. Well, you recently, and by recently, I believe just
00:12:15.920earlier this month, placed an article in the public sphere where you argue that governments
00:12:21.780frequently mislabel their own policy failures as failures of the market. And then, of course,
00:12:29.040they respond with the subsidies. And that's where you get these announcements that they love,
00:12:34.720where they say they're going to do this uh it is uh it's a strange way to but it's an expensive way
00:12:43.440and we're the ones paying the bills yeah yeah did you did you did you want to say any more on that
00:12:49.760yeah no absolutely and this would get partly to the crux crux of the matter is that
00:12:56.640there are very limited instances where there's a true market failure where the market doesn't
00:13:04.000work properly okay this we're in a real world and it's not you know all theoretically all correct
00:13:10.720and everything so there are a few instances but those instances are fewer than most people think
00:13:17.120so when government intervenes they may call something a market because it's a market
00:13:21.200failure so we need to put money government money to it or we need to subsidize it or what have you
00:13:26.960or regulate it but it's not it's a policy failure the policy is not correct and that needs to be
00:13:35.120changed and and you know and so what happens is that we run into more problems the policy is the
00:13:42.480wrong policy it makes it difficult to invest it's not commercially viable for whatever reason
00:13:48.640uh for the private sector and the government in order to obtain growth and say gee we need this
00:13:54.400thing to go ahead we've got all these minerals in the ground but we can't get them out for some
00:13:58.320reason we don't know why we always used to be able to but we can now and so they intervene in a
00:14:04.640significant way to kind of just kind of brute force through funds funding take some sort of
00:14:13.600position or role in developing the project and you know so we're covering up our mistakes a little
00:14:22.720bit by by you know adding more money to to the pocket so to speak jesus said it's expensive
00:14:28.240it's an expensive way of doing it it's a cheaper way of doing it get the policy right so how much
00:14:35.920money did we sink into those battery plants in ontario that we're never going to see again well
00:14:43.600the amount committed was a over 50 billion dollars now the government didn't actually
00:14:49.520spend all that money because a lot of that money was going to be based on subsidizing production
00:14:56.160and i want you to think even what that means not only in the past as the government provided
00:15:03.200some sort of grants or or tax-free interest-free loans or what have you to to allow an automaker
00:15:10.480to set up a production facility and that was a part of that in these in this money but now
00:15:16.720we're talking about long-term subsidies to subsidize operations the production
00:15:23.960of the batteries now thank goodness that well thank goodness in terms of the
00:15:29.080government money that we're not spending all that but you know it just goes to
00:15:36.160show how further the governments to determine this is a this is a priority
00:15:42.640for the country, and this is what we're going to do, and this is all the money we're going to put
00:15:47.600into it. Well, this, of course, to be fair to Mr. Carney, which we always try to be because we
00:15:54.140disagree with him so much, we do try to be fair. He would say that that was his predecessor who
00:16:00.340was responsible for those decisions, and that he has a different agenda, and his agenda is to
00:16:06.120identify projects that will be of benefit to the country and run them through his special projects
00:16:12.060office the only problem is that nothing come out of there yet and he's been in office now for more
00:16:17.660than 18 months perhaps we expect too much is 18 months long enough yeah well there's some
00:16:24.860very pretty big projects but you know time time marches on and um you know i would say why why
00:16:31.900does why does the cabinet have to decide which are considered major projects and projects uh you know
00:16:39.260in the national interest uh and uh and make special allowances for those you know why why
00:16:44.540can't that be it be expanded why don't you say hey you know any project is important to the country
00:16:49.740if it's commercially viable and it's going to add employment and it passes you know regulatory
00:16:55.020hurdles and proper permitting processes and things like that um we should be welcoming
00:17:00.780you know all these all these types of projects so uh so i you know i do i do question that
00:17:06.620and the centralization of this power this top down it's not even just at the federal level it's
00:17:11.500happening at the provincial level too in bc where i am and but in ontario quebec etc so so you know
00:17:18.860it is a real tendency and um you know i think people aren't aren't actually fully fully aware
00:17:24.620or they don't appreciate the implications of this okay well so mr mr carney is telling us that he's
00:17:32.620doing these great things for the country maybe they will happen one day but if
00:17:36.940they do they're going to happen on on his terms and it's going to be very
00:17:40.900expensive for the people paying for it now the other thing that is which makes
00:17:46.280me question the whole thing the other thing that he has been very strong on is
00:17:50.740his affection for Europe he really wants us to be much more closely aligned with
00:17:56.320Europe he's using the excuse of a of an American government there's tariff
00:18:00.820friendly, which is probably not going to be with us for much more than two years.
00:18:05.280But he wants to have Canada sort of look to Europe for reassurance.
00:18:10.860Well, Europe, frankly, has got bigger problems than we do in terms of their debt, their inability
00:18:16.540to control their borders, their inability to provide for their own security.
00:18:21.600So that makes me wonder, just as it makes me wonder, and I hope you're going to be able
00:18:27.420to tell me, Mr. Carney has his domestic priorities. They seem to be working more in his favor
00:18:34.580than for anybody else's. And now he has this international priority, which again, seems
00:18:41.000a hopeless case. What's really going on there? Is this an excuse to work the green agenda
00:18:48.120into Canadian politics more deeply and thoroughly?
00:18:50.940Well, I mean, that's a fair question to ask. Whether that is an actual way to integrate
00:19:07.420green policy into Canadian policy is possible. It's possible whether that's his fundamental
00:19:13.900motive or not you know i don't know but i do you know i do suspect from his what he said in the
00:19:20.060past the book he's written uh the the uh the uh you know the head of um the climate uh initiative
00:19:27.980the banking initiative he led i mean those all point to things what he he deems important so
00:19:34.380yeah, that could well be the case. I just don't, you know, I don't know the actual end game on
00:19:46.940what he's thinking here. If he's thinking that Europe is going to replace the United States as
00:19:52.040our primary trading partner over time, well, that's not very likely to happen. I mean,
00:19:58.420There's just fundamental geographic reasons and cultural reasons and commercial competitive reasons why Canada and the U.S. are likely going to continue to trade quite a bit in the future and will be the primary trading partner.
00:20:17.000Now, it doesn't mean that we shouldn't be diversifying.
00:20:19.980They're looking for new markets, okay?
00:21:58.920I probably could say his famous speech0.99
00:22:02.460at davos was very well received about this this block of middle powers uh and the need for that0.99
00:22:11.180and the old the old system being uh uh no longer uh you know appropriate or working um yeah it was
00:22:19.100well received amongst many uh but he went public like that in a very public way internationally
00:22:26.940in a very public way and i do question whether that was in canada's best interest
00:22:32.940there's a little bit put a little bit of target on on on the prime minister on himself and on canada
00:22:37.820as a result now the other thing is if this way of of thinking that of changing and creating this
00:22:46.220new block well it's certainly quite far away because when we had the um the the current trade
00:22:56.220dispute with the U.S. and when they put on significantly more tariffs and then when we
00:23:02.780ultimately the trade talks broke down and then President Trump renamed Lake Ontario and then
00:23:11.220banned alcohol and a number of other things. I didn't hear any other middle powers coming out
00:23:19.260and supporting Canada in any way. It wasn't even like a diplomatic type way of support. So
00:23:25.940So, you know, there seemed to be a loud burst of silence from the Europeans and other countries over what was going on between Canada and the U.S. in that.
00:23:54.960we can see that Mr Carney has some what are apparently unstated objectives of
00:24:00.480feeling around trying to if you had his ear and you thought that he would listen
00:24:06.640what would you tell him to do to get this country going well there'd be a couple things first of all
00:24:16.800we need we need more private investment and we need private investment in productive assets
00:24:23.600machinery equipment technology those type of assets okay and we should try to we need to set
00:24:32.320up policies that encourage businesses make businesses viable to be investing in new projects
00:24:38.960without ongoing subsidies okay so that's that's i mean that's a big ask but it's important it's
00:24:46.000essential um second project completion you know our minds and pipelines and other big projects
00:24:55.040are they going to be getting built faster and and uh getting approved faster for the final
00:25:00.960investment decision that's essential for for canada we've we've seen it that that's an issue
00:25:07.680and large institutional investors have have stated that that that's an issue uh third labor
00:25:14.080productivity we need to improve uh productivity in canada it's been relatively stagnant we're
00:25:22.160falling behind the average of the oecd and productivity growth and that's where standard
00:25:29.360of rising standards of living come from improved productivity so you know the government can
00:25:34.960announce billions of dollars in projects and they can forecast thousands of new jobs but
00:25:40.400But those announcements, they're not completed investments and they're not jobs that are actually, you know, in place at, you know, at currently right now.
00:25:51.300So, you know, we need action that's going to see results on a commercially effective basis.
00:25:58.980Well, he would probably agree with you on those three things.
00:26:03.100Of course, he would be in favor of higher productivity.
00:26:05.080he would say that his major projects office was intended to get things moving faster and so forth.
00:26:11.260But very clearly it's not happening, it's not working, things are getting worse, not better.
00:26:20.080So would I be correct in deducing from what you're saying that you think the government
00:26:28.180needs to get the hell out of the way? Yes, yes. I mean, yes, it's as simple as that.
00:26:34.060I wrote in a previous article words to that effect on that that's the case.
00:26:42.700Is that where that's where you get the productivity is let the private market, let them identify and invest in commercially viable opportunity projects.
00:26:53.500That's where you get the wealth creation.
00:26:56.720That's where you get the rising productivity.