Western Standard - Is Mark Carney, Trump's pick for 51st state governor？

00:00:00.000 China's killing our canola.

00:00:05.360 Forty-five billion dollars gone.

00:00:08.520 Western farmers bleed.

00:00:11.020 Mark Carney?

00:00:12.740 Silent.

00:00:14.280 Made millions off Beijing's dime.

00:00:17.320 He won't fight.

00:00:18.860 He's Beijing's banker, not our prime minister.

00:00:30.000 good evening western standard viewers and welcome to hannaford a weekly politics show today is

00:00:48.800 thursday april the 24th with me tonight is dr jack mince one of canada's foremost economists

00:00:54.760 and original thinkers. Good evening, Jack. Good evening, Natal. Great to see you.

00:00:59.940 Great to have you back on the show. Jack, with the general election now upon us,

00:01:03.780 both the Liberals and the Conservatives have laid out their financial plans,

00:01:08.260 and in many ways they look a lot like each other. Both call for borrowing, although in the Liberal

00:01:12.420 case it's a massive borrowing. Both call for personal income tax cuts. The Conservatives

00:01:17.340 slightly more ambitious than the Liberal. Both have sworn off the consumer carbon tax. Both

00:01:22.060 have canceled proposed increases to the capital gains tax and to eliminate GST on the purchase

00:01:27.940 of new homes up to a million or a million three. So two questions to start. First, a lot of those

00:01:34.320 things started with Polyev. Have the liberals simply cut and pasted the conservative platform?

00:01:40.180 And second, I am astonished that Mr. Carney is going to the voters with a plan to borrow $225

00:01:46.840 billion dollars over four years the federal debt is already 1.2 trillion and that's caused

00:01:51.720 huge inflation ten dollars a dozen eggs seven dollar butter don't know what it's like back

00:01:56.960 there east where you are but that's how it is out west now mr carney has run two central banks and

00:02:02.460 by his own admission he knows how things work so he must know all this can you theorize jack why

00:02:07.920 he would plan a 20 increase in the federal debt well all that means for ordinary people at the

00:02:14.680 gas pump and the grocery checkout well first of all just in response to your questions with regard

00:02:24.180 to the the plans that are being proposed by both the conservatives and the liberals i i think it's

00:02:30.480 the numbers are less important than the philosophy underlying in the case of the liberals it's sort

00:02:36.800 something that Mr. Carney has said himself that the way to grow the economy is through is by the

00:02:45.820 government and in fact he's ready to set up a whole bunch of funds that will work with the private

00:02:52.420 sector to catalyze as he keeps using that word to catalyze private investment in other words the

00:02:59.780 government picking the winners from the losers and subsidizing private investment through various

00:03:08.320 grants, tax credits, you know, whatever, that would be kind of looking like a Brookfield type

00:03:14.880 fund that would be working with partners to, you know, make investments in infrastructure and

00:03:21.380 other things. That, of course, is one philosophy that basically says that the only way to get

00:03:27.600 things going is that the government has to throw money at it the other philosophy is to say that

00:03:33.260 the government should get out of the way from the private sector deregulate cut taxes significant

00:03:40.480 tax reform other types of policies that that will spur private investment because right now it's an

00:03:47.780 obstacle to investment and that's really what the conservative plan is about so those are

00:03:52.060 Two very, very different philosophies, and I think it's reflective in both the policy platforms of the two candidate parties.

00:04:05.160 With regard to the debt issue, for sure, it is a serious issue.

00:04:09.700 And, in fact, I don't take the numbers underlying these two platforms very seriously because they very much, I think, underestimate the impact of a potential recession that we're going to see next year, potentially even the year after, but even just a one-year recession.

00:04:31.420 but with particularly slow growth all due to the disruption that is now happening at the

00:04:37.980 international level particularly with respect to terror policy that the Trump administration has

00:04:44.400 been pushing and even last night Trump who I think somehow I guess he wishes Carney wins because he

00:04:51.720 keeps interfering at the right time saying I you know I want that auto industry all in all in the

00:04:58.400 United States and I don't want any more cars produced in Canada. So given that 90% of our

00:05:08.360 exports and autos is to United States and in fact 82% of the automobiles that are produced in Canada

00:05:17.440 are exported to United States, that would of course have huge ramifications for the Canadian

00:05:22.700 economy all this suggests is that uh the the numbers that are being used in these plans uh

00:05:29.420 in my view uh should have been redone with a much more prudent assumption about how much growth we're

00:05:35.820 going to get the plans are actually based on on average about close to four percent average growth

00:05:41.420 rate nominal growth rate in gdp over the over the four-year period and i don't think that's going

00:05:47.980 going to happen. In fact, the IMF has already marked down Canadian growth by 0.6% this year

00:05:57.160 and 0.4% next year based on the Trump tariffs. And the plans were really using numbers that

00:06:06.400 were based at the end of the fall of 2024, which I think were reasonably done at that point,

00:06:14.020 but needed to be revised downward but i would have taken a very risk management type point of

00:06:20.060 view and say what happens if this is what happens in terms of the economy where let's say we

00:06:25.780 virtually have no real growth this coming year and then and and the year after a very much lower

00:06:31.520 growth rate uh than what's being assumed and then ask the question how much debt can we really

00:06:36.980 afford having before it starts uh becoming sky high and and and pushes up prices as as you've

00:06:44.900 mentioned uh and and and potentially uh leads to uh problems in the difficulty of selling our debt to

00:06:53.460 to international lenders who might start looking at candidates as too risky especially given our

00:06:59.060 terrible growth rate that we've had over the past decade well you know jack i mean we're

00:07:03.700 sort of getting close to the, I won't call it science fiction, but the speculation about

00:07:10.420 just how bad things can get. Now, you'll be well aware that there's an office within the Privy

00:07:16.900 Council office, and for readers and listeners who maybe don't have the intimate knowledge that you

00:07:24.500 have of government, there is the Prime Minister's office, and then there's the Mirror Image,

00:07:29.700 the Privy Council Office, which supplies a lot of the information and the facts that the PMO can

00:07:36.820 choose to accept or ignore. But within the Privy Council Office, very high-level civil service,

00:07:43.380 there is a little department whose job it is to look ahead and make informed speculations.

00:07:50.660 And this little office has come out with a report. I think it actually came out in January, but it

00:07:54.820 it just hit the headlines now, saying that by 2040, Canada is going to be, if present

00:08:03.160 trends continue, well, a third world country. 0.77

00:08:08.840 You know, we've already got the colored money, Jack, so what do we make of a report like that 0.87

00:08:14.800 when you see the kind of assumptions that are underlying the policies and the platforms

00:08:23.380 of the two major parties.

00:08:26.260 I mean, everybody thinks the liberals are going to win.

00:08:28.180 That's what the polls say.

00:08:29.720 Well, if they win, then all the policies that you've just talked about

00:08:33.720 and the assumptions that you've talked about,

00:08:36.660 how the government is your friend and is going to fix everything,

00:08:39.080 are going to come about.

00:08:40.080 And then is this actually going to take us down this destructive path

00:08:45.760 that the PCO has imagined?

00:08:48.000 well it's uh so first of all i actually do know about that small operation in the in the privy

00:08:54.960 council it's been there actually for quite a while uh and i used to know the person that

00:08:59.360 actually started a number of years ago um and they do uh work on kind of like long-term trends and

00:09:04.900 of course i think those i think that's a useful exercise to go to how how how credible that

00:09:11.420 forecast is going to be is a different story but certainly uh there has been a lot of work done

00:09:16.880 showing that canada is going to be having the lowest growth rate of all the oecd countries

00:09:22.320 we have now have our gdp per capita has now fallen to close to the oecd average now we don't even

00:09:29.520 shine anymore and in fact if you do have a really low growth in canada compared to everybody else

00:09:35.520 where we are going to get down to the lower parts we we may not be a third world country but we

00:09:40.000 We might start looking more like a middle income country if we keep on the path that

00:09:47.220 we're moving on.

00:09:48.320 And I think this is an issue that I have been terribly concerned about.

00:09:52.320 In fact, last Friday, I wrote about Ontario, which is the slowest growth province in Canada

00:09:57.400 over the past two decades, and is now starting to look like the sick man of North America, 0.63

00:10:02.620 just like Turkey or the Ottoman Empire looked like the sick man of Europe back in the 19th 0.90

00:10:08.760 century um and in fact uh when you look at per capita incomes in in uh ontario now it's very

00:10:15.720 little different than the poorest states in the united states uh like alabama and south carolina

00:10:20.660 and and a little bit more than mississippi so it's it's it is very concerning about the direction

00:10:27.380 that we're going especially a province like ontario which is 40 percent of canada's gdp

00:10:32.120 uh that it's um it's doing so poorly and uh i think we need our politicians to wake up

00:10:38.580 uh and and consider that uh really what we need to look for the future is is really a big bank

00:10:45.620 in terms of policies and when i read the two platforms but you know both liberal and the

00:10:51.880 conservative uh platforms there's a lot of ideas there in fact some of them i i do like and uh

00:10:58.440 especially the ones with deregulation and and um particularly but i would say they're kind of what

00:11:05.400 a lot of them are marginal reforms because there's so many different things that are that

00:11:09.640 are being proposed they you know the concern the liberal platform has like 130 different measures

00:11:15.640 uh and they're all a little bit spent here and there splayed around the country

00:11:19.800 uh it's not it's not going to do much to canadian economic growth and of course if the if the

00:11:26.120 liberal party is going to be operating on the basis of uh you know we're going to grow things

00:11:31.880 by picking the winners uh that are that are going to be responsible for canadian growth

00:11:37.560 we know that canadian governments are very poor at picking windows from losers but we also know

00:11:41.720 that losers are pretty good at picking governments uh particularly when they're looking for subsidies 0.64

00:11:47.000 so i think this is uh you know not the right approach in fact i'm much more attuned to what

00:11:53.640 the conservatives are proposing which is very similar to what we did in the 1980s when we had

00:11:59.320 to get out of the lethargy of a high debt country with very low growth high inflation back in 1984

00:12:07.720 when the marooney government came in it it privatized it deregulated it introduced tax reform

00:12:15.480 but also most importantly they developed the free trade agreement with the united states

00:12:19.960 i know it's a different era but the main point is that this was the kind of approach that we need

00:12:27.560 now in in our public policy bold ideas that are going to get uh get the economy moving and

00:12:34.760 particularly relying on the resilience of the private sector which i think is very strong in

00:12:38.920 canada to achieve the kind of goals that we want to see in terms of better prosperity in this

00:12:45.000 countries does it concern you that even the conservatives who i think you tend to favor

00:12:51.400 in this uh in in this discussion even the conservatives are talking about running a

00:12:58.280 deficit for the period of the next four years 35 billion dollars i think it was was the number

00:13:06.520 uh no actually yeah the the total deficit sat up to 100 billion as opposed to 225 billion

00:13:13.000 however uh the baseline uh deficit in other words if you take what the parties assume would be the

00:13:21.340 deficit before doing making any policy or taking any policy actions uh is 140 billion so actually

00:13:28.380 the uh the conservatives actually reduce deficits relative to the baseline by about 38 billion

00:13:34.340 not huge but certainly in the right direction uh the liberals on the other hand uh as you mentioned

00:13:40.820 are raising are going up to 225 billion which is um almost uh an additional 80 80 85 billion to to

00:13:49.780 the deficits that were uh already expected uh according to the baseline calculations so so

00:13:56.500 you clearly two different directions one where there's going to be bigger deficits and higher

00:14:01.460 debt and the other one where there's going to be at least some constraint uh on deficits and and

00:14:06.900 bringing down some of the debt uh potential uh by by undertaking those constraints so

00:14:13.620 one might say well the conservatives should have gone harder uh in terms of reducing deficits and

00:14:18.340 spending uh and certainly i think that's a criticism that can be made which goes back to

00:14:23.460 my point that if we're going to really uh get canada out of its lethargy um and and reverse

00:14:29.780 what has been a bad decade of uh poor economic growth in fact virtually no economic growth

00:14:36.900 uh on a per person level uh then we need policies that are going to really shock the economy forward

00:14:44.100 we're not as bad as argentina but as we've seen argentina has taken on huge changes in public

00:14:49.060 policy and they're starting to write has which has been a very bad situation there we're not

00:14:54.340 we're not like argentina but i don't want us to become argentina either in a hundred years

00:14:59.380 Now, the conservatives have been criticized in that they make these promises to bring down the

00:15:07.220 deficit, but the means by which they mean to do it are either through programs that don't yet exist

00:15:14.260 or through strategies. I mean, it was talked about getting rid of consultants, and that's

00:15:18.740 not a bad thing to do because civil servants shouldn't be constantly trying to offload 0.78

00:15:24.340 responsibility to consultants. But does it all add up to enough to do the job?

00:15:28.980 are their plans reasonable well i think some of the things they did is quite reasonable

00:15:35.140 they've been criticized for uh booking revenue numbers for deregulation so for example getting

00:15:42.180 rid of the cap on oil and gas emissions they have a revenue number associated uh with that

00:15:48.900 also some you know some of the other policies like the impact assessment act which has been

00:15:55.380 discouraging not only pipelines but even mining and some other resource investments as well

00:16:02.820 and so they books numbers associated with that that's called dynamic scoring it's used by the

00:16:09.060 congressional budget office in the united states there's always been a criticism that if you just

00:16:15.060 book you know what you think is the static cost of making a change so in the case of a regulation

00:16:21.060 you assume there is no additional revenue uh it's a mistake and and so what what i know the

00:16:26.660 conservatives did um is is that they actually uh based it on studies a number of them uh

00:16:33.380 parliamentary budget office studies that were well done and fairly conservatively done that showed

00:16:38.980 the impact of let's say getting rid of the oil and gas emissions cap on the impact on gdp and

00:16:45.140 And then once you know the impact on GDP, given that federal revenues are about 14% of GDP,

00:16:53.280 then you can estimate how much additional revenue will come because of the growth that comes from deregulation.

00:17:00.860 I think that's a very good policy or a very good methodology because it starts putting some emphasis on things like deregulation that can help grow the economy.

00:17:12.800 Also, tax cuts, if we don't take into account that tax cuts can actually spur growth in

00:17:19.160 the economy, then you tend to exaggerate the cost of the tax cut because you're not taking

00:17:24.820 into account some of the pickup in revenue that you get from having more growth.

00:17:29.480 And so that's another reason why dynamic scoring has been used in the United States.

00:17:34.900 And I think it's something that we should be doing in Canada as well.

00:17:37.680 Well, now, I think everybody who watches this program anyway is probably nodding in

00:17:46.140 violent agreement with you about the quality of these policies, but here's the thing.

00:17:53.780 One of the crown jewels of the conservative platform is the so-called resource corridor

00:17:58.380 within which development can be expedited.

00:18:03.040 In four years, let's say they win the election

00:18:06.500 and they've got four years to do the work,

00:18:09.220 and let's say they are able to put that resource corridor in place

00:18:14.060 and do all the other good things you've just talked about,

00:18:17.840 can those things do what they are promising to do

00:18:21.980 in the four-year term that they would have?

00:18:26.000 I think you're right.

00:18:27.320 There are going to be some things that are going to take longer

00:18:29.440 to really see the fruits of.

00:18:31.640 but again it depends on you know how quickly you can do some of these corridors uh quarters are

00:18:38.280 used uh particularly in australia at a great benefit uh to the to the country it's also used

00:18:44.360 in a number of other countries and it's a matter of uh you know you may not do it right across the

00:18:49.000 whole country that's going to take a very long time uh but there may be areas that you could do

00:18:53.240 it for example a quarter that goes from let's say alberta to uh to british columbia uh that you can

00:19:00.040 can put in pipelines, electric transmission lines, et cetera. And would the benefits appear in the

00:19:07.020 very first four years? Maybe, maybe not. Maybe some benefits will be realized, because if you

00:19:13.920 can get it done within, get the corridor established within a couple of years, then by the

00:19:18.380 end of the four years, you might get some positive results. But certainly, I think the movement

00:19:23.320 towards that is, I think, very important. And I noticed even, you know, the Liberal Plan has

00:19:27.760 corridors as well and so it's uh this is one thing i'm actually glad to see that both major parties

00:19:33.520 are uh are talking about uh this approach to um getting resource development uh through

00:19:41.040 um the one the concern i have with respect to the liberal plan is that i think they're more

00:19:45.440 focused on electricity uh and it's not clear that they're interested in oil and gas when lng itself

00:19:53.120 we exported lng to uh china japan and other countries in europe uh it may increase our

00:20:01.600 own emissions but from a worldwide perspective it would reduce emissions if it's a matter of

00:20:06.160 replacing uh coal uh which is currently used in in a number of the countries so um but you know

00:20:12.880 we have to remember you know greenhouse gas emissions uh the impact temperature it's a

00:20:18.000 worldwide impact not any one specific country but the total amount across all countries so

00:20:25.280 we really have to look at how you reduce worldwide emissions not just

00:20:30.160 even if one action by a country increases its own emissions if it reduces worldwide emissions

00:20:35.280 that's a good thing so i think you know the corridor concept i think is would be very

00:20:40.080 valuable to have but we'll have to see of course whether how far it goes down the road given

00:20:45.600 that canada really is is already has a reputation internationally as being very slow in permitting

00:20:52.240 uh very slow in contract uh formation a number of studies have shown how poorly we do in fact

00:20:58.640 we're closer to the bottom of the oecd countries when it comes to the cost of doing

00:21:02.960 business in in this country and and so again that's an area that's going to need significant

00:21:08.640 change uh that will be pushed i think by any government that's going to come into power

00:21:13.760 especially given the Liberals have also expressed interest in quarters

00:21:17.940 and approving regulation.

00:21:19.980 Whether they have the solutions or not is another story.

00:21:23.000 Jack, we're almost out of time, but I do want to ask you one thing

00:21:26.460 that the Liberals are very proud of, and that is their plans

00:21:29.680 to build prefabricated housing in great quantity

00:21:32.800 to take care of what everybody acknowledges is a serious housing crisis,

00:21:39.820 one that has been generated by excessive immigration, perhaps. Nevertheless, the people

00:21:45.580 are here. They don't have a place to live. They're talking about prefabricated housing.

00:21:50.700 That, along with alternative energy, is something that Brookfield has great experience with. Of

00:21:59.420 course, Mr. Carney would be familiar with that, so I can imagine where these ideas are coming

00:22:04.460 from. But you know, I grew up in Great Britain right after the war, and we had prefabricated

00:22:10.540 houses everywhere, and there was a reason for that. The housing stock had been bombed out,

00:22:16.380 and people had to live somewhere, so they threw together what they could. But nobody ever said,

00:22:20.620 my goal is to live in a prefab. There are still some out there. They were well built.

00:22:28.380 most of them are gone but there are still some out there but typically there are social problems

00:22:34.540 that come with living in that kind of uh inexpensive relatively publicly funded publicly

00:22:42.460 operated housing do you have any more faith in that plan than i do well it's not entirely clear

00:22:50.860 that's the the best approach in fact i don't mind if people have a demand for it and they would like

00:22:56.700 to have it built in fact right now uh i did some reading on it actually atco in alberta is actually

00:23:01.980 one of the biggest uh builders of uh prefabricated housing and of course uh the issue is that it's

00:23:09.260 it requires land and i think that's going to be the biggest problem is the fact that it's still

00:23:15.020 land intensive housing uh and um you know we could put uh saudi hot huts on on uh on land in fact if

00:23:24.460 anyone wants to know what a saudi hat is you just go to calgary heritage park it's what the westerners

00:23:29.820 uh they lived in these grass hills hills which which were very cheap to to make and they have

00:23:38.060 you know a lot of land of course to live around it but uh but the prefabricated homes uh will

00:23:43.900 still require land and it's not entirely clear that this can be necessarily the only or best option

00:23:49.180 And in big urban centers, of course, condos tend to be a lot less land intensive.

00:23:57.200 The problem with condos, of course, is that for families that want to have a backyard and et cetera, et cetera, you need to have land.

00:24:06.760 So I'm not convinced that fabricated housing is going to be the solution.

00:24:10.620 In fact, we shouldn't try to push in any one direction.

00:24:14.720 I think we need to have housing built for the different demands that are out there.

00:24:21.700 And so I like policies, which both the Conservatives and Liberals have,

00:24:25.500 like reducing development charges, cutting taxes, GST, for example, on housing.

00:24:34.640 There's some negatives associated with that, but I think that should be done.

00:24:38.440 I think the provinces should get out of their land transfer taxes.

00:24:41.360 uh you know in in ontario and in toronto they're double uh the ontario rate because the toronto has

00:24:48.420 has a loan transfer tax as well it's a huge tax on mobility but but it has to purchase cost of

00:24:54.140 housing to a very large extent so there's a whole bunch of policies that i think we can do to lower

00:25:00.340 the cost of housing without telling people well you have to buy a prefab as opposed to something

00:25:05.780 else and this is this goes back to i think do you have policies that you know tell people what to do

00:25:12.320 or just get governments out of the way and that's why i prefer kind of those policies that are going

00:25:18.140 to get the government out of the way amen to that jack thank you for this my wife and i are going

00:25:24.580 to be out in the country this weekend with our little handbook of edible plants uh just in case

00:25:30.000 the privy council offices got it right would you care to risk your reputation on a guess on what's

00:25:35.460 going to happen on monday go on i dare you or maybe tuesday i think is the election

00:25:40.240 the 28th yes 128 okay i'm sorry i forgot i've already voted so anyway uh yes uh am i going to

00:25:50.680 predict yes i think the liberals will win but uh whether they get a majority is another story

00:25:54.740 that's uh uh we'll have to see well jack will the polls agree with you uh and some of us are ready

00:26:01.960 to, as I say, take to the hills. This has been great. Thank you very much, Jack. It's always

00:26:07.320 a pleasure to have you on the program. For the Western Standard, I'm Nigel Hannaford.

Western Standard - April 25, 2025

Is Mark Carney, Trump's pick for 51st state governor？

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