00:04:00.140Well, very often when there are 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.
00:04:19.800It 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.
00:05:03.200And, you know, a number of those have literally just been cancelled, and others have been, you know, skimmed back or reduced or been rethought.
00:05:15.600So, you know, that's a big example there of misdirection, misdirection of time and effort.
00:05:23.480But 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.
00:05:32.380And 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.
00:05:48.080It provides optionality to the country to get products to other markets.
00:05:56.160Just to make an observation there, Jerome.
00:05:58.480I mean, there was a time when we didn't need the government to pay the bill for this thing.
00:06:04.680The last time that a pipeline was completed, it's the one that parallels the—it's called the Trans Mountain, you're probably familiar with it—it parallels the old route.0.97
00:06:18.360It got so expensive, there was so much government interference, that in the end, the private contractor walked away, and now the government owns the damn thing.
00:06:27.820So that didn't used to be the way we got big projects financed and built.0.65
00:06:34.460Yeah, no, you're exactly right. Yeah. And that's just exactly where I was getting at.
00:06:39.180It's unfortunate that we can't attract more private capital to that Pacific Link pipeline
00:06:46.460project. It's unfortunate. And that, I think to a significant degree, is because of poor policies
00:06:53.580and very obtuse regulations that the government has set on industry that makes it next to
00:07:02.060impossible for a private company to be willing to invest and get a big project like that through.
00:07:09.020You know, but then you get the projects where the government is pushing for and supporting,
00:07:15.420where unlike the Pacific pipeline, there is no real strong economic case. So I'm thinking the
00:07:21.180The Alto, that high-speed rail train between Quebec City and Toronto.
00:07:26.100You know, in 2025, they estimated that cost between $60 and $90 billion, which is a lot.
00:07:32.200Even for Canada, even for a country our size, it's a lot of money.
00:07:35.860Now, the Parliamentary Budget Office has recently estimated the cost to be between $75 and $113 billion.
00:07:45.060The way this project is being planned out and the lack of a strong economic rationale has got big problems written all over it, and it should not be funded with significant public money.
00:08:02.940So, again, we ask the question, whose interest is actually being served in that case?
00:08:09.700Yeah, well, again, I mean, it would be the interest of the organizations, the businesses, the unions that will benefit from this type of project.
00:08:22.900But what we need is, what we need to determine, is this a benefit to Canada overall, especially the type of money we're talking about?
00:08:30.820Now, in some of these climate commitment policies, well, the benefit will be, you know, towards meeting some UN-type climate goal, which, you know, one can really question how practical or practical or even how even it is easy to meet and whether it can be met in a normal situation.
00:09:00.600And, you know, I think that's a fair question to ask.
00:09:03.340So, yeah, you're right in that a lot of these projects that are going ahead,
00:09:10.340it's fair to question, are they going to be benefiting Canada on the whole
00:09:54.480And who is benefiting? It is a political trophy, I suspect. I think you're implying the same.
00:10:03.680And 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, but only the government can do it.
00:10:19.420again what we're seeing is an aggregation of economic power to the center and the center is
00:10:26.300controlled by the government of the day in this case in the person of mr carney so are we are we
00:10:33.900building an economy that frankly looks something like the old ussr but maybe a little bit more
00:10:40.060efficient yeah well yeah we were we're we're abandoning um market type policies for whatever
00:10:48.300reason um i think what's going on is that government intervenes with policies in the
00:10:53.180marketplace and they say oh there's some sort of market failure or we can do this better
00:10:58.460and then it creates distortions very often they're unintended consequences and so the
00:11:04.060government has to go in and intervene again to try to fix some of those unintended consequences
00:11:09.180and it you know it snowballs it keeps on on going uh like that getting larger and larger and larger
00:11:15.660but what we need is that we need an environment where we we lay out some rational efficient
00:11:24.780regulatory permitting rules okay we provide some predictability for businesses and we don't say
00:11:32.060no we like you we're going to give you more money and we don't like you so you're at the
00:11:36.220end of the queue you're not on our priority project list we let the market decide is this
00:11:43.580a commercially viable opportunity that's where the wealth creation occurs is when it's a commercially
00:11:50.460viable opportunity not necessarily when it's a project that goes ahead because it's been
00:11:56.380subsidized or there's very generous tax credits that doesn't necessarily that doesn't improve
00:12:02.300wealth creation or to a lot lesser degree so we're getting away from letting the market do
00:12:09.580what the market does best well you were recently and by recently i believe just earlier this month
00:12:17.180placed an article in the public sphere where you argue that governments frequently mislabel their
00:12:24.300own policy failures as failures of the market and then of course they respond with the subsidies
00:12:30.860and that's where you get these uh announcements that they love where they say they're going to do
00:12:35.980this uh it is uh it's a strange way to but it's an expensive way and we're the ones paying the bills
00:12:45.420yeah yeah did you did you did you want to say any more on that yeah no absolutely and this
00:12:51.560gets partly to the crux crux of the matter is that there are very limited instances where
00:13:00.360there's a true market failure where the market doesn't work properly, okay? We're in a real
00:13:06.620world and it's not, you know, all theoretically, all correct and everything. So there are
00:13:11.740a few instances, but those instances are fewer than most people think. So when government
00:13:17.920intervenes, they may call something a market because it's a market failure. So we need to
00:13:22.380put money, government money to it, or we need to subsidize it or what have you, or regulate it.
00:13:27.920But it's not. It's a policy failure. The policy is not correct. And that needs to be changed. And so what happens is that we run into more problems. The policy is the wrong policy. It makes it difficult to invest. It's not commercially viable for whatever reason for the private sector.
00:13:50.380And the government, in order to obtain growth and say, gee, we need this thing to go ahead.
00:13:55.380We've got all these minerals in the ground, but we can't get them out for some reason.
00:13:59.380We always used to be able to, but we can now.
00:14:02.460And so they intervene in a significant way to kind of just kind of brute force through funds, funding, take some sort of position or role in developing the project.
00:14:18.040And, you know, so we're covering up our mistakes a little bit by, you know, adding more money to the pot, so to speak.
00:14:33.440So how much money did we sink into those battery plants in Ontario that we're never going to see again?
00:14:42.360Well, the amount committed was over $50 billion.
00:14:47.940Now, the government didn't actually spend all that money because a lot of that money was going to be based on subsidizing production.
00:14:56.060And I want you to think even what that means.
00:14:58.800Not only in the past has the government provided some sort of grants or tax-free, interest-free loans or what have you to allow an automaker to set up a production facility.
00:15:13.200And that was a part of that in this money.
00:15:15.900But now, we're talking about long-term subsidies to subsidize operations, the production of the batteries.
00:15:25.680Now, thank goodness that, well, thank goodness in terms of the government money that we're not spending all that.
00:15:34.320But, you know, it just goes to show how further the government's to determine this is a priority for the country and this is what we're going to do and this is all the money we're going to put into it.
00:15:48.700Well, this, of course, to be fair to Mr. Carney, which we always try to be because we disagree with him so much, we do try to be fair.
00:15:56.240he would say that that was his predecessor who was responsible for those decisions and that he
00:16:03.580has a different agenda and his agenda is to identify projects that will be of benefit to
00:16:09.420the country and run them through his special projects office the only problem is that nothing
00:16:14.560come out of there yet and he's been in office now for more than 18 months perhaps we expect too much
00:16:46.740hey, any project is important to the country
00:16:49.520If it's commercially viable and it's going to add employment and it passes, you know, regulatory hurdles and proper permitting processes and things like that, we should be welcoming, you know, all these types of projects.
00:17:06.820And the centralization of this power, this top down, it's not even just at the federal level.
00:17:11.480It's happening at the provincial level, too, in B.C., where I am, but in Ontario, Quebec, etc.
00:17:17.260So it is a real tendency, and I think people aren't actually fully, fully aware, or they don't appreciate the implications of this.
00:17:28.360Okay. Well, so Mr. Carney is telling us that he's doing these great things for the country.
00:17:34.400Maybe they will happen one day, but if they do, they're going to happen on his terms, and it's going to be very expensive for the people paying for it.
00:17:42.740Now, the other thing that he's, which makes me question the whole thing, the other thing that he has been very strong on is his affection for Europe.
00:17:52.940He really wants us to be much more closely aligned with Europe.
00:17:56.860He's using the excuse of an American government that's tariff friendly, which is probably not going to be with us for much more than two years.
00:18:05.280But he wants us to have Canada sort of look to Europe for reassurance.
00:18:10.760Well, Europe, frankly, has got bigger problems than we do in terms of their debt, their inability to 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 to tell me, Mr. Carney has his domestic priorities.
00:18:31.420They seem to be working more in his favor than for anybody else's.
00:18:36.040And now he has this international priority, which, again, seems a hopeless case.
00:18:45.060Is this an excuse to work the green agenda into Canadian politics more deeply and thoroughly?
00:18:52.260Well, I mean, you know, that that's that's a fair that's a fair question to ask.
00:18:58.220But whether that is an actual way to integrate green policy into Canadian policy is possible.
00:19:12.100It's possible whether that's his fundamental motive or not, I don't know.
00:19:15.640But I do, you know, I do suspect from his, what he said in the past, the book he's written, the, you know, the head of the climate initiative, the banking initiative he led, I mean, those all point to things what he deems important.
00:19:33.580So, yeah, that could well be the case.
00:19:40.040I just don't know the actual endgame on what he's thinking here.
00:19:48.480If he's thinking that Europe is going to replace the United States as our primary trading partner over time, well, that's not very likely to happen.
00:19:57.740I mean, there's just fundamental geographic reasons and cultural reasons and commercial, you know, competitive reasons why Canada and the U.S., you know, are likely going to continue to trade quite a bit in the future and will be the primary trading partner.
00:20:17.180Now, it doesn't mean that we shouldn't be diversifying.
00:20:21.580So I'm certainly not against that, but there's one thing to be looking for new markets and trying to enter into free trade agreements, and there's other things where he's trying to integrate into more of a political bloc where there could be certain policies and restrictions that have been set up in these other jurisdictions that I hope that we aren't going to be stuck with.
00:20:51.580because they haven't been set up for our particular needs.
00:20:56.660I don't think the Europeans would say that they've been set up for their benefit either.
00:21:01.000It seems that it's a stifling bureaucracy,
00:21:04.500which is all the more reason why Canada should have less to do with it rather than more.
00:21:09.660And yet that seems to be the direction that Mr. Carney would take us,
00:21:14.300which brings us back to where we began the interview.
00:21:16.560I do think that he knows what he's doing, and he has conveyed a message to Canadians
00:21:23.520about what he is doing, but I don't find it persuasive, and I'm really trying to get down
00:21:30.920to the bottom of what's really his endgame.
00:21:34.860In his Davos speech, he talked loosely about a third power block, the United States and
00:21:44.560china and then the rest of the world middle powers i mean it seemed like science fiction at
00:21:50.480the time and it still does have you any idea can you tell us what mr carneade's game plan is yeah
00:21:58.160well you know this is his probably could say his famous speech at davos was very well received
00:22:05.280about this this block of middle powers and the need for that and the old the old system being
00:22:38.580Now, the other thing is, if this way of thinking and of changing and creating this new block, well, it's certainly quite far away.
00:22:51.220Because when we had the current trade dispute with the U.S., and when they put on significantly more tariffs, and then when ultimately the trade talks broke down, and then President Trump renamed Lake Ontario, and then banned alcohol, and a number of other things,
00:23:14.040I didn't hear any other middle powers coming out and supporting Canada in any way.
00:23:22.180It wasn't even a diplomatic type way of support.
00:23:25.480So, 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.
00:23:38.900Oh, it sounds good. But how realistic is that type of a block when everybody is God protecting their own interests and is, you know, walking on eggshells? Yeah, very questionable.
00:23:49.840Very questionable indeed. We're almost out of time, Jerome. So let me just ask you this.
00:23:54.980we can see that Mr. Carney has some what are apparently unstated objectives
00:26:34.120I wrote in a previous article words to that effect on that that's the case is that where that's where you get the productivity is let the private market, let them identify and invest in commercially viable opportune projects.
00:26:53.360That's where you get the wealth creation.
00:26:56.740That's where you get the rising productivity.
00:26:59.560The government direction tends not to work.
00:27:03.880They tend not to pick the best projects.
00:27:07.060And it tends to consume resources, consume taxpayer money.
00:27:15.380And that's a different difference than a commercially attractive opportunity.
00:27:23.360Jerome, you know, we see him making up to Europe.
00:27:27.020We see him relishing the fight with the United States.
00:27:29.800We see him with a major projects office that doesn't produce any major projects.
00:27:36.660Do you think Mr. Carney's got a hidden agenda?