January 28, 2025 • 44 mins
Canadian Liberal Party Leader Candidate Chrystia Freeland discusses the future of Canadian and US cooperation to reshape global trade and weaken China's dominance of supply chains. She is joined by Bloomberg's David Gura.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. Bloomberg's David Goura sits
down with former Canadian finance minister and Liberal Party leader
candidate Christia Freeland.
Speaker 2 (00:15):
If President Trump follows through on this threat to impose
twenty five percent tariff across the board on Canadian goods,
how should Canada respond?
Speaker 3 (00:23):
Well, I think we should start responding today. I think
that we should publish for consultation a retaliation list. I
think it should be massive, right, it should be two
hundred billion. That's not saying that we retaliate at two
hundred billion, but giving us like a menu, like a
(00:43):
s'morgus board of choices. And we need to publish it now,
because when President Trump says America first, I believe them,
and I believe that he doesn't care that much if
Canadian politicians are jumping around banging their fists on the table,
but he cares about Americans. And I want Wisconsin dairy
(01:05):
farmers to see themselves on that list and to be
calling the White House and to be saying, mister President.
Speaker 4 (01:11):
We elected you, but now it's gonna be terrible. We're
not gonna be able to sell stuff to Canada.
Speaker 3 (01:16):
I want Michigan blue collar workers who make washing machines
in Michigan to see their washing machines on the list
and to call at the White House and say, mister President,
what the heck here?
Speaker 4 (01:29):
We love selling stuff to Canada. Do not do this.
Speaker 3 (01:32):
And the thing that I think can sometimes be missed,
especially in how Americans think about this, is.
Speaker 4 (01:40):
I think, if you will permit me, David, to put
myself in the mind.
Speaker 3 (01:43):
Of American I hope you guys don't think about Canada
very much. I think when you think about Canada, maybe
you think about hockey. Maybe you think we're quite nice,
and we say please and thank you.
Speaker 4 (01:56):
And probably probably we say sorry a little more than
than you guys would.
Speaker 3 (02:01):
And I just don't think you think of us as
major players, and that is fine with us. But what
you miss in that calculation about Canada is uniquely in
the whole world, we have economic leverage over you. You
(02:22):
guys are not a big trading nation, but insofar as
you export stuff, you sell it to your Canadian pals.
We are a larger market for the United States than China, Japan,
the UK, and France combined.
Speaker 4 (02:39):
So actually we do matter for you.
Speaker 3 (02:42):
And one thing that I love about Americans is you
guys have a true entrepreneurial spirit and commercial spirit. You
are the guys who say the customer is always right. Well,
guess what, we're your main customer. And I think Canadians
now need to be reminding not so much the White House,
but all those great Americans who sell us your great
(03:05):
American stuff.
Speaker 4 (03:06):
And I think what we need to be saying is
we love your stuff. You guys make great stuff.
Speaker 3 (03:11):
That's why we buy so much of it, and really,
don't you want to keep selling it to us.
Speaker 2 (03:16):
A criticism I hear of your approach is by doing this,
by coming up with that menu or that long list,
you're going to further raise the hackles of President Trump.
You're kind of putting more of a target on your back.
What do you say to those critics? Who are you? Then?
Speaker 4 (03:31):
You know?
Speaker 3 (03:32):
I have a lot of respect for President Trump. I
think he has been throughout his career underestimated. I think
he is a really smart guy. And one of the
things that I've observed is I think he's going to
be smarter in this administration than he was in the
(03:53):
first one. Someone I have good relations. This may surprise
you David with a lot of people close to the president.
One of them actually was in my house here in
Toronto for supper a few weeks ago. I'm not going
to tell you no, of course, I'm not going to
tell you he won't come back for supper, right, but
he said, you know, the President has spent since the
election weeks and weeks and weeks hanging out with really
(04:16):
smart people, and he has some really good and clear ideas.
So I take the President very, very seriously as a
smart guy actually.
Speaker 4 (04:27):
With a clear world view.
Speaker 3 (04:30):
I also observe his negotiating style. And what I observe,
which I think everybody sees, is this is not a
guy for whom.
Speaker 4 (04:42):
Weakness is attractive.
Speaker 3 (04:45):
I would say for President Trump, weakness is a provocation.
I think capitulation is not a negotiating strategy with him.
This person close to the President said to me, this
was before the inauguration.
Speaker 4 (04:59):
He said, Trump thinks it's just great.
Speaker 3 (05:01):
He's going around yelling at the world, threatening the world,
and countries are just tripping over themselves to like preconcede,
they're negotiating with themselves. He's not even president, and they're
offering him a million things and the President, quite rightly,
by the way, thinks this is great. He hasn't done
a single thing, and the world is tripping over itself
(05:24):
to give him stuff.
Speaker 4 (05:26):
Now, I truly believe.
Speaker 3 (05:30):
That Canada and the United States today have a really fabulous,
mutually beneficial win win productive relationship, and I think.
Speaker 4 (05:41):
We need to and should have that in the future.
Speaker 3 (05:44):
No less a president than Ronald Reagan described our relationship
as the best most productive relationship over a long period
of history of two countries in the world. So I
think a win win is possible essential, But I think
the way you get there generally in life, but particularly
(06:06):
with this president, is to say to him, you know what, really,
pushing us around is not a good idea. And critically,
what we need to be doing is getting people in
the United States to understand that. Because I also really
understand and I respect this about the president.
Speaker 4 (06:28):
The people he listens to the most are Americans. So
the people he's going to listen to, David, are your listeners.
Speaker 3 (06:35):
What Canada needs to do is make the case to
American exporters, make the case to American business leaders, people
who are watching the stock market, as President Trump does
very carefully, that actually you have a great relationship with Canada.
Speaker 4 (06:50):
Why would you want to miss that up?
Speaker 2 (06:51):
Can I ask you what maybe a dumb sounding question,
that is, there are no dumb questions, thank you. What
does President Trump want here? We are just a few
days away from this February first deadline that he's put
in place. He's talked a lot about traffic of drugs,
He's talked about immigration. Do you have a clear sense
of what would have to happen for him to forego
putting those tariffs in place?
Speaker 4 (07:13):
No, that is not a dumb question at all. It
is an excellent question.
Speaker 3 (07:18):
And I am not going to presume to know what
President Trump wants. I think that that is up to
him and the very smart people around him to say.
Speaker 4 (07:29):
But based on.
Speaker 3 (07:32):
Past behavior, based on what we're seeing, I think President
Trump is seeking to accomplish three things. First of all,
he would just like Canada to negotiate with itself as
much as possible, and he'd like us to anti up
tons of stuff.
Speaker 4 (07:49):
So that's number one.
Speaker 3 (07:51):
I think number two, what President Trump is trying to do,
quite intentionally, is create uncertainty for investors in every country.
Speaker 4 (08:02):
Other than the United States.
Speaker 3 (08:05):
He wants to make investors when they're thinking about where
do you put that the next dollar to think, we
have no idea what President Trump is going to do.
We know he wants us to invest in the US.
We don't know what he's going to do to any
other country. So what the heck, Let's put our money
in the United States. And that is not a dumb strategy, right,
(08:27):
you know, just by saying a few things on social media,
you automatically suck capital into the United States. I think
the third thing that the president wants to do is
on cole as we would say here, and I think
that you know, as Canadians, we think about Canada US
(08:51):
very much, but I know Americans, you guys don't wake
up in the morning and think, hey, how is our
relationship with the Canadians going. And President Trump, I do think,
has clearly elaborated and sophisticated worldview of what he wants
to do. And it seems pretty clear to me that
(09:14):
he has come to the conclusion that if he can
show the rest of the world how mean and tough
he can be with his closest partners and allies, how
much he's prepared to beat up on those really nice Canadians,
who throughout history have been great partners for the US.
How do you think that's going to make the Chinese feel? So?
(09:36):
I think there's that calculation as well, that's kind of on.
Speaker 4 (09:39):
The tough guy side of things.
Speaker 3 (09:41):
But I do want to offer a positive opportunity that
I think is in the President's mind as well, maybe
two positive opportunities to positive exit ramps.
Speaker 4 (09:55):
The first one is I do.
Speaker 3 (09:57):
Think the President is the very concerned about US security
security for the USA, economic security, but also national security.
And in that context, kind of locking down your neighbors,
locking down your continent makes a lot of sense. Locking
(10:20):
down your continent by saying, hey, Canadians be the fifty
first state. I really want to assure you, my American
friends and neighbors.
Speaker 4 (10:29):
It's not going to work.
Speaker 3 (10:31):
That is going to get our hackles up, and we're
going to say a stronger no than you might ever imagine.
But locking down your security by saying hey, Canada, let's
work together on continental economic and physical security, You're going
(10:52):
to find everyone in Canada saying yeah, we'll sign up
to that.
Speaker 4 (10:56):
And that has been the.
Speaker 3 (10:57):
Canadian choice throughout history. I mean, the whole reason Canada
is a member of the G seven. Is because you
guys said, we don't want to be alone with the Europeans.
Speaker 4 (11:06):
We want to have our Canadian pals with US.
Speaker 3 (11:09):
And where Canada feels our interests are aligned with the US,
we are an outstanding partner.
Speaker 4 (11:17):
We can be your wingman.
Speaker 3 (11:18):
So on that kind of continental security point, we can
be really helpful. And then I think there's a second
exit ramp, a second win win scenario that I believe
Scott Besant's confirmation as Secretary of the Treasury really opens
up for the US and for Canada. Scott Bessant is
(11:43):
an incredibly sophisticated global economic thinker.
Speaker 4 (11:49):
He is a man who has.
Speaker 3 (11:53):
A very well worked out view of the global macro
not just environment, but the global macro system. And he
is someone who's spent his career thinking about moments when
that system changes. In fact, you could say that his
(12:14):
investing strategy has been figure out where the imbalances are
and invest there. Figure out where the changes are going
to be, and invest there.
Speaker 4 (12:23):
And I do believe that.
Speaker 3 (12:28):
It's right to point to there being global macro imbalances
which are a problem for the whole world.
Speaker 4 (12:36):
But particularly the US.
Speaker 3 (12:38):
The fact is the global economy today is run based
on the US consumer. It is run based on incredibly
strong US domestic demand.
Speaker 4 (12:50):
And what that is requiring.
Speaker 3 (12:52):
Is that you guys run just like eye popping fiscal
deficits which at a certain point sure are going to
become unsustainable. In the meantime, China has been running notwithstanding
frequent protestations. This is going to change an economic system
(13:14):
that is based on selling stuff to the world and
not having strong domestic demand. And China over and over
again promises and fails to have strong domestic demand in China.
I think it is entirely possible that the historic role
that Scott Bessant has signed up for is to be
(13:35):
the guy who writes those global financial and trade imbalances
a kind of Plaza Accords for our time. And Canada
can be a valuable and intelligent partner for the US
in the effort to rebalance the global economy.
Speaker 4 (13:58):
We're chairing the G seven this year. Year we get it.
And that that is where I.
Speaker 3 (14:05):
See two kind of quite new and important win wins
for Team Trump. That Canada can offer so continental security,
national and economic help you guys with this great and
essential project of rebalancing the global economy, of writing those
(14:27):
global financial imbalances. But we can't do it if you
keep beating up on us and like slapping us in
the face.
Speaker 2 (14:34):
A cornerstone of your campaign is you've had experience dealing
with President Trump before. You know how he operates, You
know his negotiating strategy. And I think we could both
say this isn't the same playbook as last time. Maybe
it's a revised version of it. He wasn't talking about
subsuming Greenland, or resting control of the Panama Canal back,
or making Canada the fifty first state the last time
(14:55):
he was in office. I am curious how you watched
what unfolded over the weekend, the President making a threat
against Columbia and in the span of really nine hours,
going from saying he was going to levy tariffs of
twenty five or fifty percent to removing them completely and
Columbia essentially folding in the face of that. What does
that tell you about his tax his strategy this time around.
Speaker 3 (15:19):
Well, I look at it more from the Colombian perspective,
and I would say, never make a threat you're not
prepared to act on. And so from the Canadian perspective,
when we put retaliatory tariffs on the table, we as
a country need to be fully prepared to act on them,
(15:39):
and I think we are.
Speaker 4 (15:41):
I hope it.
Speaker 3 (15:41):
Doesn't come to that, I really really do, and I
think it would be better for Canada and the US
not to come to it. So that's what it tells
me from the Canadian perspective. What it tells me from
the US perspective is unless you have leverage of some kind,
the president is not going to care about you. And
(16:04):
that's why what gives me such medium term confidence about
the Canadian position is we have leverage, and we have
negative leverage. If you hit us, we uniquely in the
whole world, do have the economic capacity to hit back,
and we also have positive leverage. There is a lot
(16:26):
that we can offer you, guys. And I think, like
broadly in the United States, I think Americans know that.
Speaker 4 (16:35):
Like as we said at the beginning, David.
Speaker 3 (16:37):
Americans, I don't believe spend a ton of time thinking
about Canada. But I think when you think about Canada,
you think our friends to the north, and I think
you know if you want to pull back. And I
do really think President Trump has been taking.
Speaker 4 (16:53):
A true historical view of the US.
Speaker 3 (16:58):
I truly do, I truly do, and I think he
sees himself as someone who is president at a hinge
moment in history, and he wants to take advantage of that.
So if you take that kind of a perspective on
the Canada US relationship, I think what you will see
is the strength and the prosperity of the United States
(17:22):
has to a very significant degree been based on the
fact you've never had to worry about the North. You know,
you have a five and a half thousand mile border
with US, you never have to worry about it in
a meaningful way. Compare yourselves to a European power right
(17:43):
that has constantly in its history, had to worry about
its borders, had to worry about being invaded, had to
worry about spending money for its own continental defense.
Speaker 4 (17:52):
You guys have never had to do that.
Speaker 3 (17:55):
And better yet, you've had a great economic relationship with
those guys to the north.
Speaker 4 (17:59):
I haven't even talked about energy.
Speaker 3 (18:02):
Energy security is a critical element of national security.
Speaker 4 (18:07):
And if you doubt me, just ask the Germans.
Speaker 3 (18:11):
Right, building their economy based on cheap Russian gas has
turned out to be a mistake of historic significance.
Speaker 2 (18:19):
It's curbing energy on the menu that you would propose
the government may.
Speaker 3 (18:23):
I think we as a country need to be prepared
to use all the tools in our toolbox. I also
think that we need to have a strategy which is united,
strong and smart. So any measures we take, we need
to have the home team together.
Speaker 4 (18:41):
One of the things I learned I was trade minister
for a while.
Speaker 3 (18:44):
I negotiated trade deal with the EU and we renegotiated NAFTA,
which is President.
Speaker 2 (18:51):
Trump's trade We're happy with it for a time.
Speaker 4 (18:53):
He said it's the best deal in the world.
Speaker 3 (18:55):
One of the things I learned, taught by Canada's brilliant
professional trade negotiators, is the most important thing in a
trade negotiation is be sure the home team is aligned.
Speaker 4 (19:08):
And that is a real priority for me.
Speaker 3 (19:09):
Maybe of less interest to your American listeners, but here
in Canada, the place I would start is guess all
on the same page, working together.
Speaker 2 (19:19):
Well, let me ask you lastly about that before I
move on to other topics. Do you feel that Canadians
understand the gravity of this moment? And I saw the
Bank of Canada was out with a projection that GDP
could take a six percent hit if these tariffs going
into place. You certainly know this Prime Minister well, have
worked with them closely, and I wonder if you think
that he and the government now is prepared to take
(19:41):
the kind of hardline approach that you're advocating for here
in the context of this campaign. Is your read that
the government is approaching it with kind of a commensurate
level of seriousness, And I guess aggressiveness might be the word.
Speaker 3 (19:53):
You started by asking me about Canadians, and I think
that is actually the most important question, and I am
absolutely certain that Canadians understand how serious this is. Like
I've been traveling around the country a lot. As you
may have heard, we have a campaign for the leadership
(20:14):
of the Liberal Party right now. So I've been traveling
around a lot, and everywhere I go, people come up
to me on the street in you know, malls, on
airplanes and airports, and the first thing every single person
says is what are we going to do with President Trump?
And do you know, be sure to tell them Canada
(20:38):
is not for sale, Our sovereignty is not negotiable. So
I think Americans are going to find that Canadians are
more deeply patriotic than you may expect. We are not
a country that you know, tends to always wear our
(20:59):
flight on our heart and wrap ourselves in the flag.
But I think now is a moment when you're going
to see us doing it, and you're going to see
us doing it, you.
Speaker 4 (21:07):
Know, more in sorrow than in anger.
Speaker 3 (21:10):
You're going to see us saying, guys, we actually like you.
Let's keep a good thing going. But I think you're
going to see a very very deep Canadian commitment to
saying we are Canadian and we are not going to
sacrifice one millimeter of our sovereignty, including our economic sovereignty.
Speaker 2 (21:34):
That's the Canadian side writ large. How about the government's position,
How do you feel like they're approaching this and is
it sufficient enough in terms of its aggressiveness in the
face of the threat from President Trump.
Speaker 3 (21:45):
What I'm trying to do now that I'm a leadership
candidate and not in the government, is I would say,
help to stiffen the national spine. And I've been laying
out some very clear negotiating ideas that we need to
put forward, and I'm glad when I see them adopted
(22:05):
by the government. I do have to say the premiers
are playing a really important role. I'm in touch with
many of them, and that has been a very important
part of Team Canada. And I also want to give
a shout out to labor leaders and business leaders. The
way we succeeded in NAFTA I or in Trump one
(22:26):
was by building a true Team Canada approach, which was
premiers of provinces and territories across the country. It was
business leaders, it was labor leaders, it was indigenous leaders.
Speaker 4 (22:38):
And that's what we're going to have to do this time.
Speaker 2 (22:41):
I want to ask you about the letter that you
wrote resigning from your post. It had this kind of
seismic effect, certainly within your party and government. We felt
it in the States as well.
Speaker 4 (22:50):
That's for Canadian political events, isn't it.
Speaker 3 (22:54):
I heard a lot of ble saying, wow, Canada, like
you're usually so boring, You've actually become inter but for ourselves.
Speaker 2 (23:03):
Huge and we're here talking in part because of that. Obviously,
this campaign is a result of that. Did you know
at the time it was going to have that kind
of seismic effect that it did?
Speaker 4 (23:11):
Oh? Absolutely not. No.
Speaker 3 (23:12):
I mean when I wrote my letter and published it
that was on a Monday. I assumed that on the Tuesday,
Mark Kearney would be sworn in as Finance Minister, and
I think that's what the Prime Minister assumed to.
Speaker 2 (23:26):
Something that was in that letter was an impression that
you need to do more to keep your fiscal powder dry.
As you look back on the last two fiscal years,
do you regret not doing more to kind of shore
up the fiscal position of this country.
Speaker 3 (23:40):
Well, as you know David visiting US from the United States,
Canada is in an outstanding fiscal position compared to you guys.
I mean, you guys are looking at deficits seven plus.
Speaker 4 (23:53):
We're looking at.
Speaker 3 (23:54):
A deficit, you know, one in a bit and are
we have a triple A credit. Our debt to GDP
ratio is the lowest in the g seven.
Speaker 4 (24:05):
Hugely lower than yours.
Speaker 3 (24:07):
So Canada, you know, the fundamental fiscal position of Canada
is strong. What I did believe in the fall, and
this conviction became stronger first with President Trumps selection and
then with his twenty five percent tariff threat, was that
(24:28):
we had to as a country turn all of our
attention to that threat. We had to recognize that President
Trump was not just blustering.
Speaker 4 (24:40):
You know.
Speaker 3 (24:40):
I'm one of the people who takes him very seriously
and sees him as a very smart guy who has
a thought out plan. That is what I saw then,
that is what I see now, And so it was
very clear to me that as a government, you know,
(25:02):
it had to be like heart and nerve and sinew like.
Everything had to be focused on that and writing checks
that would cost US six billion dollars as this you know,
train was coming down the track, to me, was irresponsible.
Speaker 2 (25:18):
You vote Mark Harney a minute ago, and he's committed
to bouncing the budget. I guess, with running small deficits
from time to time, are you prepared to also call
for bounced budgets? And if so, on what timeline.
Speaker 3 (25:29):
I believe that we need to be fiscally responsible absolutely.
I believe that Canada's triple A credit rating is absolutely
essential when it comes to, you know, where our.
Speaker 4 (25:44):
Fiscal position is.
Speaker 3 (25:45):
Let's see what happens on February first, because and in
the weeks to come. I do think when we talk
about the impact of tariffs on Canada, I am medium term,
one one thousand percent, one million percent a google percent
confident that Canada will that Canadians will stand up for Canada,
(26:09):
that we will get through this and we will get
to a win win position with the US. I'm to
me that is absolutely clear, because that's what.
Speaker 4 (26:16):
The economic fundamentals say.
Speaker 3 (26:19):
But I am also not naive about how hard it's
going to be along the way. This is going to
be a very challenging economic situation for US. Tariffs will
bring in revenues for sure, our counter tariffs will our
retaliatory tariffs, and we need to use that money to
(26:39):
support Canadian families, to support Canadian businesses, but it will
be also an economic hit to Canada, and so I
think we need to see where that goes before committing
to any specific targets. It's just like with COVID, Right
Like during COVID, we did the right thing as a country.
We did spend money to support Canadians, to support Canadian families,
(27:04):
and the result in Canada was an economy that came
through it in much better shape than we came through
the two thousand and eight financial crisis, and actually.
Speaker 4 (27:14):
A really strong public health response.
Speaker 3 (27:16):
You know, if Canada had had US levels of mortality,
an additional seventy thousand Canadians would have died. That is
the size of you know, a Canadian city like Fredericton
that many people gone.
Speaker 4 (27:31):
So yeah, I have.
Speaker 2 (27:33):
A couple of questions about revenues, and the first has
to do with the capital gains tax height that you
introduced and supported. You've since come back on that. It's
not something that you support putting in place now. I
gather because of the context we're in, Donald Trumping reelected
the prospect of these tariffs. Part of that was raising revenue.
I gathered nineteen billion Canadian dollars over five years. How
(27:56):
do you replace that if that doesn't come to pass.
Speaker 3 (28:00):
Let me just start by saying, you know, as I
said about my views during the fall, I take President
Trump really seriously. Uh, and I do believe we need
to be building our policies given that new reality. I
think as Canadians, by the way, we need to see
(28:20):
some real opportunities in that new reality. So, you know,
there are some sort of hoary old chestnuts of Canadian
public policy stuff that we all kind of know would
be a good idea to do, but it's just so hard.
So if you were a Canadian journalist, you would know
inter provincial trade the holy grail of every single Canadian
(28:42):
public policy thinker.
Speaker 4 (28:44):
Very easy to say, it's.
Speaker 3 (28:45):
A good idea, hard to do with, and easy to
get the idea right. Like, if another country is threatening
trade measures against US, maybe a good place to start is.
Speaker 4 (29:00):
Let's trade with each other for goodness sake.
Speaker 3 (29:03):
And so I think now, in the face of the
US threat, it's a great opportunity to do that, and
I think you're really seeing some national will around that.
I think it's a great opportunity to say, guys, we
have to stop getting in our own way. We have
to make it easier to build stuff fast in Canada.
(29:25):
We have to cut red tape and get big projects
built because.
Speaker 4 (29:30):
We're going to need it.
Speaker 3 (29:31):
So I do want to be clear that there are
some opportunities and you know, in terms of where are
we going to find revenue. I'm not unveiling all of
my platform here today with you, David, even though I
am enjoying the conversation immensely, But we have some really
good ideas that I look forward to sharing with Canadians.
Speaker 2 (29:53):
There's a fiscal question about your about face on that
particular tax. I think there's a larger question about the
way that you. You advocated for it in months past,
so you kind of couched it in moral terms. You
had a message to the wealthiest people in this country
that this was something that they had to do on
moral grounds. There shouldn't be hungry kids going to school,
for instance. For somebody who listened to you talking about
(30:14):
it in that way and sees you moving away from it,
what do you say if they question your kind of
commitment to political principle because of.
Speaker 4 (30:22):
That income inequality and.
Speaker 3 (30:27):
What Canadians might call a just society, a society where
we take care of each other, has been a kind
of central principle of my life and my thinking since
I became a sentient human truly, Like I come from
a small town in northern Alberta. It's really really cold.
(30:51):
You're cold in Toronto today. It gets down to forty
below regularly in the winter. And people in the Peace Country,
they are frontier men. My family were pioneers, very proud
of that, very tough, very entrepreneurial. But like the patron
Saint of the Peace Country, his motto was what people
(31:13):
said about him was he was every man's friend and
he never locked.
Speaker 4 (31:17):
His cabin door.
Speaker 3 (31:19):
And that is a very powerful thing that I've known
since I remember knowing words, and I do think we
have to take care of each other. I wrote a
book about income inequality and sort of the rise of
this global plutocracy and the hollowing out of the middle
class before I entered politics. I'm really proud of the
(31:40):
things we did. I did in government to push against it.
The Canada Child Benefit a huge measure that has lifted
Canadian families, Canadian children out of poverty. I spoke yesterday
with an Afghan Canadian woman who's going to be running
(32:00):
for the Liberal Party in the next election, and she
told me how she came to Canada. She was married,
very very young, she had three children. It was a
difficult relationship. She left the relationship and she said, I
slept with my kids in our Honda Civic for nearly
a year and then the candidate and think about that,
(32:22):
and she said, one kid on each seat, one kid
on the back seat.
Speaker 4 (32:26):
And she said she slept where the feed are.
Speaker 3 (32:31):
And she's not self pitying. She's now running as a
Liberal candidate. Okay, she has a good job. She's running
And she said, what made it possible for me and
my kids to get out of the Honda Civic and
for me now to be a candidate for the Liberal
Party is the candidate child benefit. And she was just
counting the days until she got that. So we have
put some really really good programs in place. I'm also
(32:53):
very proud of the national system of daycare ten dollars
a day daycare. Great for family, Emily's great for allowing
women to have a kid and have a job. Also
a great driver of economic growth. So I believe in
all of that. I also know that today for Canada,
(33:17):
the most significant economic fact and reality is that Donald
Trump is president with a plan to change the world.
Speaker 4 (33:27):
And we don't need to be afraid of that.
Speaker 3 (33:29):
We need to have a plan to deal with it,
and we need to recognize the magnitude of the challenge.
You know, John Maynard Kaines had this great line, when
the facts change, I change my mind, sir, what.
Speaker 4 (33:40):
Do you do?
Speaker 3 (33:41):
And the difference between a United States with Joe Biden
or Kamala Harris as president, both of them intended to
raise the capital gains rate, versus a Donald Trump as
president is huge for Canada. You know, we started off
in the conversation talking about one of my.
Speaker 4 (34:01):
Sort of core.
Speaker 3 (34:02):
Understandings about Donald Trump, and that is that one of
his objectives is take all the world's money. You heard
that in the Davos speech, right, He was like, guys,
invest your money and can't in the United States.
Speaker 4 (34:16):
It'll be great.
Speaker 3 (34:18):
Invest your money outside of the United States, it will be terrible.
So he wants to suck in all the world's investment.
He wants to suck an investment by Canadian businesses.
Speaker 4 (34:27):
And for Canadians, it's the easiest thing in.
Speaker 3 (34:30):
The world to invest in the United States. So we
right now have to fight. We have to fight for
Canadian jobs, we have to fight for Canadian businesses, we
have to fight for Canadian investment. And that does mean
we have to change our policies.
Speaker 4 (34:46):
And I do that.
Speaker 3 (34:49):
Without any apology whatsoever. I do that because we have
to put the national interest first.
Speaker 2 (34:56):
Wrapping up here, let me ask you about the party
today and what it's going through, what this campaign represents.
And I guess I'm bringing my bias to the table here,
but thinking about what's happening within the Democratic Party in
the United States after this election, is it a fair
parallel as they think about who their base of support
is who they represent, how big a tent they have.
Are you and your party going through something similar similar undulations?
Speaker 3 (35:21):
That is such an interesting question. You're the first person
who's asked me that question, and I'm glad you have
because I think about it a lot, and I do
think for us as a party, having this leadership race
is incredibly healthy. We are seeing a surge of new
memberships in the Liberal Party, we are seeing a surge
(35:44):
of interest. We're having conversations that we haven't had before.
One of the things that I really believe we need
to do, and I'll leave it to you to judge
and your listeners whether Americans need to do it to
is where I think the Right has been effective in
(36:08):
recent months and years is in finding ways to connect
with its own grassroots supporters, in finding ways to make
regular people feel that they were being listened to and
that they were driving what the policies would be. I
(36:30):
would say that our party had become less effective at that.
I think inside our party we had allowed the grassroots
to atrophy. As a government, we functioned in a very
kind of you know, star system.
Speaker 4 (36:52):
One man banned.
Speaker 3 (36:55):
Decisions taken right at that apex and flowing down, and
that's not good for democracy. And you know, if I've
been spending a lot of my time meeting with grassroots
Liberal supporters and with Canadians who you might describe as
(37:16):
liberal curious, and you know what I think, you know,
the hardcore liberal supporters. What I've heard them say is
if the only time you talk to us is when
you want us to write a check or knock on
a door or put up a lawn sign, don't.
Speaker 4 (37:32):
Be surprised if we're disengaged.
Speaker 3 (37:34):
So I see this moment, certainly for us here in
the political center in Canada, in the Liberal Party, as
an opportunity to, you know, with a huge amount of
energy and conviction, reinvent how we are working as a party,
to really listen to Canadians, to listen to Liberals, to
(37:59):
say to them.
Speaker 4 (38:00):
You're the boss.
Speaker 3 (38:02):
You're the boss of the party, and to Canadians, you're
the boss of the government. And these are kind of
words that are easy to say. I think it's important
to put in structures that make that the case. And
so last week I put forward some very specific proposals.
Speaker 4 (38:23):
On reform of our party.
Speaker 3 (38:27):
One of them, maybe the most important one, is you know,
I don't know about you, David, but a way to
understand who your boss is is.
Speaker 4 (38:37):
To know who has the ability to fire you.
Speaker 3 (38:40):
And so what I have promised is, if I am
chosen as leader, one of the very first things I
will do is say to the party membership, I want
you to come up with a mechanism for a leadership review.
I want you to have the right and the tools
to fire me. And I can assure you when we
(39:03):
give Liberal Party members that authority and that power, you
will have a Liberal leader who is much much more
responsive to the grassroots of the party, and you will
have a stronger and better party and you know what,
you will make Canadian democracy better.
Speaker 2 (39:20):
Quick follow up to that, could term limits have solved
this problem? Clearly that was something that was preventing the
party from thinking about who would come next.
Speaker 3 (39:28):
And when we are a strong and vibrant parliamentary democracy.
And I don't think grafting features from a US presidential
system onto our own is really good idea.
Speaker 4 (39:41):
But no, no, but no, but no.
Speaker 3 (39:43):
But where I think you're driving at I agree with,
which is the leader cannot be the person who decides
whether she or.
Speaker 4 (39:57):
He continues in that role.
Speaker 3 (40:00):
We need to be sure the grassroots have much more
authority than they have today. I think we need to
be sure that caucus members have much more authority than
they have today, which is how parliamentary democracies in the
Westminster system work in other countries. And I do absolutely
believe that it was wrong for the leader alone to
(40:24):
be the person who decided whether he continued in government.
Speaker 2 (40:30):
Just kind of in the time horizon of this campaign.
I'm very curious how you'll go about differentiating yourself from
your closest rival here. So I look at your biographies.
Grew up in Alberta, went to Harvard, graduate school at Oxford,
government service time on the international stage. What are going
to be the different differentiators between you and Mark Corney
(40:51):
going forward here?
Speaker 3 (40:53):
Well, talking about if we're going to start with the biography,
I think there are some crucial differences. One is I've
been a politician and politics is something that.
Speaker 4 (41:09):
I think you need to you know, where experience helps.
Speaker 3 (41:15):
Margaret Atwood has this great line where at a dinner
party she was talking to a neurosurgeon and the neurosurgeon said,
I'm planning to retire soon, and then I want to
write a novel.
Speaker 4 (41:25):
Do you have any tips?
Speaker 3 (41:27):
And she said, Oh, that's so interesting, because I'm planning
to retire from being a novelist and I'm going to
be a neurosurg any tips for me.
Speaker 4 (41:33):
So, like politics, it's a thing, and.
Speaker 3 (41:37):
For sure you get scars doing it, but you also
learn stuff, and that particularly applies to dealing with other
countries and dealing with tough negotiations. It is one thing
to be a technocrat. It is one thing to be
a bureaucrat responsible only to your own bureaucracy and ultimately
(42:02):
to your political masters. It is another thing to be
an elected politician, responsible to your country and your citizens,
and to go mano amano with the tough guys of
the world.
Speaker 4 (42:14):
That's something I've done. Canadians have seen me do it, and.
Speaker 3 (42:18):
Crucially, the tough guys of the world have seen me
do it. So I would say that is an absolutely
critical difference.
Speaker 2 (42:27):
Last question, how determined are these next few weeks going
to be for Canada? Yes, in the context of this campaign,
but as we're facing this, this very first deadline. In
your letter you talked about the gravity of the moment.
How do you see it in the context of history huge, you.
Speaker 3 (42:44):
Know, I think we are at a hinge moment for
Canada and also for the world. I think this is
a time when you know that period we had that
remember the end of history? Do you remember that the
end of history is now ended? And I would say
(43:05):
even that rules based international order that we built so
painstakingly after the Second World War, I think that is
being shaken up. The kind of peak globalization we had
with China's entry to the WTO, that.
Speaker 4 (43:22):
Is being shaken up. So you know, the tectonic.
Speaker 3 (43:25):
Plates of the global political system and the global economy
are shifting right now, and that matters for Canada. And
at heart, the reason that I am running to be
leader of the Liberal Party and the Prime Minister of
Canada is I have a plan for how Canada cannot
(43:49):
just survive this shifting.
Speaker 4 (43:50):
Of the plates, but absolutely.
Speaker 3 (43:53):
Thrive as these plates shift. Thrive because the things we
do at home, but also thrive because I have a
real vision of how this reordering can happen in ways
that are good for Canada and good for the United States.
(44:14):
And I know that that is something we can work
on together.
Speaker 1 (44:19):
That was Bloomberg's David Gourup and former Canadian finance minister
and Liberal Party leader candidate Christopher Freeland. And this is Bloomberg.
Bloomberg Audio Studios, Podcasts, Radio News. Bloomberg's David Goura sits
down with former Canadian finance minister and Liberal Party leader
candidate Christia Freeland.
Speaker 2 (00:15):
If President Trump follows through on this threat to impose
twenty five percent tariff across the board on Canadian goods,
how should Canada respond?
Speaker 3 (00:23):
Well, I think we should start responding today. I think
that we should publish for consultation a retaliation list. I
think it should be massive, right, it should be two
hundred billion. That's not saying that we retaliate at two
hundred billion, but giving us like a menu, like a
(00:43):
s'morgus board of choices. And we need to publish it now,
because when President Trump says America first, I believe them,
and I believe that he doesn't care that much if
Canadian politicians are jumping around banging their fists on the table,
but he cares about Americans. And I want Wisconsin dairy
(01:05):
farmers to see themselves on that list and to be
calling the White House and to be saying, mister President.
Speaker 4 (01:11):
We elected you, but now it's gonna be terrible. We're
not gonna be able to sell stuff to Canada.
Speaker 3 (01:16):
I want Michigan blue collar workers who make washing machines
in Michigan to see their washing machines on the list
and to call at the White House and say, mister President,
what the heck here?
Speaker 4 (01:29):
We love selling stuff to Canada. Do not do this.
Speaker 3 (01:32):
And the thing that I think can sometimes be missed,
especially in how Americans think about this, is.
Speaker 4 (01:40):
I think, if you will permit me, David, to put
myself in the mind.
Speaker 3 (01:43):
Of American I hope you guys don't think about Canada
very much. I think when you think about Canada, maybe
you think about hockey. Maybe you think we're quite nice,
and we say please and thank you.
Speaker 4 (01:56):
And probably probably we say sorry a little more than
than you guys would.
Speaker 3 (02:01):
And I just don't think you think of us as
major players, and that is fine with us. But what
you miss in that calculation about Canada is uniquely in
the whole world, we have economic leverage over you. You
(02:22):
guys are not a big trading nation, but insofar as
you export stuff, you sell it to your Canadian pals.
We are a larger market for the United States than China, Japan,
the UK, and France combined.
Speaker 4 (02:39):
So actually we do matter for you.
Speaker 3 (02:42):
And one thing that I love about Americans is you
guys have a true entrepreneurial spirit and commercial spirit. You
are the guys who say the customer is always right. Well,
guess what, we're your main customer. And I think Canadians
now need to be reminding not so much the White House,
but all those great Americans who sell us your great
(03:05):
American stuff.
Speaker 4 (03:06):
And I think what we need to be saying is
we love your stuff. You guys make great stuff.
Speaker 3 (03:11):
That's why we buy so much of it, and really,
don't you want to keep selling it to us.
Speaker 2 (03:16):
A criticism I hear of your approach is by doing this,
by coming up with that menu or that long list,
you're going to further raise the hackles of President Trump.
You're kind of putting more of a target on your back.
What do you say to those critics? Who are you? Then?
Speaker 4 (03:31):
You know?
Speaker 3 (03:32):
I have a lot of respect for President Trump. I
think he has been throughout his career underestimated. I think
he is a really smart guy. And one of the
things that I've observed is I think he's going to
be smarter in this administration than he was in the
(03:53):
first one. Someone I have good relations. This may surprise
you David with a lot of people close to the president.
One of them actually was in my house here in
Toronto for supper a few weeks ago. I'm not going
to tell you no, of course, I'm not going to
tell you he won't come back for supper, right, but
he said, you know, the President has spent since the
election weeks and weeks and weeks hanging out with really
(04:16):
smart people, and he has some really good and clear ideas.
So I take the President very, very seriously as a
smart guy actually.
Speaker 4 (04:27):
With a clear world view.
Speaker 3 (04:30):
I also observe his negotiating style. And what I observe,
which I think everybody sees, is this is not a
guy for whom.
Speaker 4 (04:42):
Weakness is attractive.
Speaker 3 (04:45):
I would say for President Trump, weakness is a provocation.
I think capitulation is not a negotiating strategy with him.
This person close to the President said to me, this
was before the inauguration.
Speaker 4 (04:59):
He said, Trump thinks it's just great.
Speaker 3 (05:01):
He's going around yelling at the world, threatening the world,
and countries are just tripping over themselves to like preconcede,
they're negotiating with themselves. He's not even president, and they're
offering him a million things and the President, quite rightly,
by the way, thinks this is great. He hasn't done
a single thing, and the world is tripping over itself
(05:24):
to give him stuff.
Speaker 4 (05:26):
Now, I truly believe.
Speaker 3 (05:30):
That Canada and the United States today have a really fabulous,
mutually beneficial win win productive relationship, and I think.
Speaker 4 (05:41):
We need to and should have that in the future.
Speaker 3 (05:44):
No less a president than Ronald Reagan described our relationship
as the best most productive relationship over a long period
of history of two countries in the world. So I
think a win win is possible essential, But I think
the way you get there generally in life, but particularly
(06:06):
with this president, is to say to him, you know what, really,
pushing us around is not a good idea. And critically,
what we need to be doing is getting people in
the United States to understand that. Because I also really
understand and I respect this about the president.
Speaker 4 (06:28):
The people he listens to the most are Americans. So
the people he's going to listen to, David, are your listeners.
Speaker 3 (06:35):
What Canada needs to do is make the case to
American exporters, make the case to American business leaders, people
who are watching the stock market, as President Trump does
very carefully, that actually you have a great relationship with Canada.
Speaker 4 (06:50):
Why would you want to miss that up?
Speaker 2 (06:51):
Can I ask you what maybe a dumb sounding question,
that is, there are no dumb questions, thank you. What
does President Trump want here? We are just a few
days away from this February first deadline that he's put
in place. He's talked a lot about traffic of drugs,
He's talked about immigration. Do you have a clear sense
of what would have to happen for him to forego
putting those tariffs in place?
Speaker 4 (07:13):
No, that is not a dumb question at all. It
is an excellent question.
Speaker 3 (07:18):
And I am not going to presume to know what
President Trump wants. I think that that is up to
him and the very smart people around him to say.
Speaker 4 (07:29):
But based on.
Speaker 3 (07:32):
Past behavior, based on what we're seeing, I think President
Trump is seeking to accomplish three things. First of all,
he would just like Canada to negotiate with itself as
much as possible, and he'd like us to anti up
tons of stuff.
Speaker 4 (07:49):
So that's number one.
Speaker 3 (07:51):
I think number two, what President Trump is trying to do,
quite intentionally, is create uncertainty for investors in every country.
Speaker 4 (08:02):
Other than the United States.
Speaker 3 (08:05):
He wants to make investors when they're thinking about where
do you put that the next dollar to think, we
have no idea what President Trump is going to do.
We know he wants us to invest in the US.
We don't know what he's going to do to any
other country. So what the heck, Let's put our money
in the United States. And that is not a dumb strategy, right,
(08:27):
you know, just by saying a few things on social media,
you automatically suck capital into the United States. I think
the third thing that the president wants to do is
on cole as we would say here, and I think
that you know, as Canadians, we think about Canada US
(08:51):
very much, but I know Americans, you guys don't wake
up in the morning and think, hey, how is our
relationship with the Canadians going. And President Trump, I do think,
has clearly elaborated and sophisticated worldview of what he wants
to do. And it seems pretty clear to me that
(09:14):
he has come to the conclusion that if he can
show the rest of the world how mean and tough
he can be with his closest partners and allies, how
much he's prepared to beat up on those really nice Canadians,
who throughout history have been great partners for the US.
How do you think that's going to make the Chinese feel? So?
(09:36):
I think there's that calculation as well, that's kind of on.
Speaker 4 (09:39):
The tough guy side of things.
Speaker 3 (09:41):
But I do want to offer a positive opportunity that
I think is in the President's mind as well, maybe
two positive opportunities to positive exit ramps.
Speaker 4 (09:55):
The first one is I do.
Speaker 3 (09:57):
Think the President is the very concerned about US security
security for the USA, economic security, but also national security.
And in that context, kind of locking down your neighbors,
locking down your continent makes a lot of sense. Locking
(10:20):
down your continent by saying, hey, Canadians be the fifty
first state. I really want to assure you, my American
friends and neighbors.
Speaker 4 (10:29):
It's not going to work.
Speaker 3 (10:31):
That is going to get our hackles up, and we're
going to say a stronger no than you might ever imagine.
But locking down your security by saying hey, Canada, let's
work together on continental economic and physical security, You're going
(10:52):
to find everyone in Canada saying yeah, we'll sign up
to that.
Speaker 4 (10:56):
And that has been the.
Speaker 3 (10:57):
Canadian choice throughout history. I mean, the whole reason Canada
is a member of the G seven. Is because you
guys said, we don't want to be alone with the Europeans.
Speaker 4 (11:06):
We want to have our Canadian pals with US.
Speaker 3 (11:09):
And where Canada feels our interests are aligned with the US,
we are an outstanding partner.
Speaker 4 (11:17):
We can be your wingman.
Speaker 3 (11:18):
So on that kind of continental security point, we can
be really helpful. And then I think there's a second
exit ramp, a second win win scenario that I believe
Scott Besant's confirmation as Secretary of the Treasury really opens
up for the US and for Canada. Scott Bessant is
(11:43):
an incredibly sophisticated global economic thinker.
Speaker 4 (11:49):
He is a man who has.
Speaker 3 (11:53):
A very well worked out view of the global macro
not just environment, but the global macro system. And he
is someone who's spent his career thinking about moments when
that system changes. In fact, you could say that his
(12:14):
investing strategy has been figure out where the imbalances are
and invest there. Figure out where the changes are going
to be, and invest there.
Speaker 4 (12:23):
And I do believe that.
Speaker 3 (12:28):
It's right to point to there being global macro imbalances
which are a problem for the whole world.
Speaker 4 (12:36):
But particularly the US.
Speaker 3 (12:38):
The fact is the global economy today is run based
on the US consumer. It is run based on incredibly
strong US domestic demand.
Speaker 4 (12:50):
And what that is requiring.
Speaker 3 (12:52):
Is that you guys run just like eye popping fiscal
deficits which at a certain point sure are going to
become unsustainable. In the meantime, China has been running notwithstanding
frequent protestations. This is going to change an economic system
(13:14):
that is based on selling stuff to the world and
not having strong domestic demand. And China over and over
again promises and fails to have strong domestic demand in China.
I think it is entirely possible that the historic role
that Scott Bessant has signed up for is to be
(13:35):
the guy who writes those global financial and trade imbalances
a kind of Plaza Accords for our time. And Canada
can be a valuable and intelligent partner for the US
in the effort to rebalance the global economy.
Speaker 4 (13:58):
We're chairing the G seven this year. Year we get it.
And that that is where I.
Speaker 3 (14:05):
See two kind of quite new and important win wins
for Team Trump. That Canada can offer so continental security,
national and economic help you guys with this great and
essential project of rebalancing the global economy, of writing those
(14:27):
global financial imbalances. But we can't do it if you
keep beating up on us and like slapping us in
the face.
Speaker 2 (14:34):
A cornerstone of your campaign is you've had experience dealing
with President Trump before. You know how he operates, You
know his negotiating strategy. And I think we could both
say this isn't the same playbook as last time. Maybe
it's a revised version of it. He wasn't talking about
subsuming Greenland, or resting control of the Panama Canal back,
or making Canada the fifty first state the last time
(14:55):
he was in office. I am curious how you watched
what unfolded over the weekend, the President making a threat
against Columbia and in the span of really nine hours,
going from saying he was going to levy tariffs of
twenty five or fifty percent to removing them completely and
Columbia essentially folding in the face of that. What does
that tell you about his tax his strategy this time around.
Speaker 3 (15:19):
Well, I look at it more from the Colombian perspective,
and I would say, never make a threat you're not
prepared to act on. And so from the Canadian perspective,
when we put retaliatory tariffs on the table, we as
a country need to be fully prepared to act on them,
(15:39):
and I think we are.
Speaker 4 (15:41):
I hope it.
Speaker 3 (15:41):
Doesn't come to that, I really really do, and I
think it would be better for Canada and the US
not to come to it. So that's what it tells
me from the Canadian perspective. What it tells me from
the US perspective is unless you have leverage of some kind,
the president is not going to care about you. And
(16:04):
that's why what gives me such medium term confidence about
the Canadian position is we have leverage, and we have
negative leverage. If you hit us, we uniquely in the
whole world, do have the economic capacity to hit back,
and we also have positive leverage. There is a lot
(16:26):
that we can offer you, guys. And I think, like
broadly in the United States, I think Americans know that.
Speaker 4 (16:35):
Like as we said at the beginning, David.
Speaker 3 (16:37):
Americans, I don't believe spend a ton of time thinking
about Canada. But I think when you think about Canada,
you think our friends to the north, and I think
you know if you want to pull back. And I
do really think President Trump has been taking.
Speaker 4 (16:53):
A true historical view of the US.
Speaker 3 (16:58):
I truly do, I truly do, and I think he
sees himself as someone who is president at a hinge
moment in history, and he wants to take advantage of that.
So if you take that kind of a perspective on
the Canada US relationship, I think what you will see
is the strength and the prosperity of the United States
(17:22):
has to a very significant degree been based on the
fact you've never had to worry about the North. You know,
you have a five and a half thousand mile border
with US, you never have to worry about it in
a meaningful way. Compare yourselves to a European power right
(17:43):
that has constantly in its history, had to worry about
its borders, had to worry about being invaded, had to
worry about spending money for its own continental defense.
Speaker 4 (17:52):
You guys have never had to do that.
Speaker 3 (17:55):
And better yet, you've had a great economic relationship with
those guys to the north.
Speaker 4 (17:59):
I haven't even talked about energy.
Speaker 3 (18:02):
Energy security is a critical element of national security.
Speaker 4 (18:07):
And if you doubt me, just ask the Germans.
Speaker 3 (18:11):
Right, building their economy based on cheap Russian gas has
turned out to be a mistake of historic significance.
Speaker 2 (18:19):
It's curbing energy on the menu that you would propose
the government may.
Speaker 3 (18:23):
I think we as a country need to be prepared
to use all the tools in our toolbox. I also
think that we need to have a strategy which is united,
strong and smart. So any measures we take, we need
to have the home team together.
Speaker 4 (18:41):
One of the things I learned I was trade minister
for a while.
Speaker 3 (18:44):
I negotiated trade deal with the EU and we renegotiated NAFTA,
which is President.
Speaker 2 (18:51):
Trump's trade We're happy with it for a time.
Speaker 4 (18:53):
He said it's the best deal in the world.
Speaker 3 (18:55):
One of the things I learned, taught by Canada's brilliant
professional trade negotiators, is the most important thing in a
trade negotiation is be sure the home team is aligned.
Speaker 4 (19:08):
And that is a real priority for me.
Speaker 3 (19:09):
Maybe of less interest to your American listeners, but here
in Canada, the place I would start is guess all
on the same page, working together.
Speaker 2 (19:19):
Well, let me ask you lastly about that before I
move on to other topics. Do you feel that Canadians
understand the gravity of this moment? And I saw the
Bank of Canada was out with a projection that GDP
could take a six percent hit if these tariffs going
into place. You certainly know this Prime Minister well, have
worked with them closely, and I wonder if you think
that he and the government now is prepared to take
(19:41):
the kind of hardline approach that you're advocating for here
in the context of this campaign. Is your read that
the government is approaching it with kind of a commensurate
level of seriousness, And I guess aggressiveness might be the word.
Speaker 3 (19:53):
You started by asking me about Canadians, and I think
that is actually the most important question, and I am
absolutely certain that Canadians understand how serious this is. Like
I've been traveling around the country a lot. As you
may have heard, we have a campaign for the leadership
(20:14):
of the Liberal Party right now. So I've been traveling
around a lot, and everywhere I go, people come up
to me on the street in you know, malls, on
airplanes and airports, and the first thing every single person
says is what are we going to do with President Trump?
And do you know, be sure to tell them Canada
(20:38):
is not for sale, Our sovereignty is not negotiable. So
I think Americans are going to find that Canadians are
more deeply patriotic than you may expect. We are not
a country that you know, tends to always wear our
(20:59):
flight on our heart and wrap ourselves in the flag.
But I think now is a moment when you're going
to see us doing it, and you're going to see
us doing it, you.
Speaker 4 (21:07):
Know, more in sorrow than in anger.
Speaker 3 (21:10):
You're going to see us saying, guys, we actually like you.
Let's keep a good thing going. But I think you're
going to see a very very deep Canadian commitment to
saying we are Canadian and we are not going to
sacrifice one millimeter of our sovereignty, including our economic sovereignty.
Speaker 2 (21:34):
That's the Canadian side writ large. How about the government's position,
How do you feel like they're approaching this and is
it sufficient enough in terms of its aggressiveness in the
face of the threat from President Trump.
Speaker 3 (21:45):
What I'm trying to do now that I'm a leadership
candidate and not in the government, is I would say,
help to stiffen the national spine. And I've been laying
out some very clear negotiating ideas that we need to
put forward, and I'm glad when I see them adopted
(22:05):
by the government. I do have to say the premiers
are playing a really important role. I'm in touch with
many of them, and that has been a very important
part of Team Canada. And I also want to give
a shout out to labor leaders and business leaders. The
way we succeeded in NAFTA I or in Trump one
(22:26):
was by building a true Team Canada approach, which was
premiers of provinces and territories across the country. It was
business leaders, it was labor leaders, it was indigenous leaders.
Speaker 4 (22:38):
And that's what we're going to have to do this time.
Speaker 2 (22:41):
I want to ask you about the letter that you
wrote resigning from your post. It had this kind of
seismic effect, certainly within your party and government. We felt
it in the States as well.
Speaker 4 (22:50):
That's for Canadian political events, isn't it.
Speaker 3 (22:54):
I heard a lot of ble saying, wow, Canada, like
you're usually so boring, You've actually become inter but for ourselves.
Speaker 2 (23:03):
Huge and we're here talking in part because of that. Obviously,
this campaign is a result of that. Did you know
at the time it was going to have that kind
of seismic effect that it did?
Speaker 4 (23:11):
Oh? Absolutely not. No.
Speaker 3 (23:12):
I mean when I wrote my letter and published it
that was on a Monday. I assumed that on the Tuesday,
Mark Kearney would be sworn in as Finance Minister, and
I think that's what the Prime Minister assumed to.
Speaker 2 (23:26):
Something that was in that letter was an impression that
you need to do more to keep your fiscal powder dry.
As you look back on the last two fiscal years,
do you regret not doing more to kind of shore
up the fiscal position of this country.
Speaker 3 (23:40):
Well, as you know David visiting US from the United States,
Canada is in an outstanding fiscal position compared to you guys.
I mean, you guys are looking at deficits seven plus.
Speaker 4 (23:53):
We're looking at.
Speaker 3 (23:54):
A deficit, you know, one in a bit and are
we have a triple A credit. Our debt to GDP
ratio is the lowest in the g seven.
Speaker 4 (24:05):
Hugely lower than yours.
Speaker 3 (24:07):
So Canada, you know, the fundamental fiscal position of Canada
is strong. What I did believe in the fall, and
this conviction became stronger first with President Trumps selection and
then with his twenty five percent tariff threat, was that
(24:28):
we had to as a country turn all of our
attention to that threat. We had to recognize that President
Trump was not just blustering.
Speaker 4 (24:40):
You know.
Speaker 3 (24:40):
I'm one of the people who takes him very seriously
and sees him as a very smart guy who has
a thought out plan. That is what I saw then,
that is what I see now, And so it was
very clear to me that as a government, you know,
(25:02):
it had to be like heart and nerve and sinew like.
Everything had to be focused on that and writing checks
that would cost US six billion dollars as this you know,
train was coming down the track, to me, was irresponsible.
Speaker 2 (25:18):
You vote Mark Harney a minute ago, and he's committed
to bouncing the budget. I guess, with running small deficits
from time to time, are you prepared to also call
for bounced budgets? And if so, on what timeline.
Speaker 3 (25:29):
I believe that we need to be fiscally responsible absolutely.
I believe that Canada's triple A credit rating is absolutely
essential when it comes to, you know, where our.
Speaker 4 (25:44):
Fiscal position is.
Speaker 3 (25:45):
Let's see what happens on February first, because and in
the weeks to come. I do think when we talk
about the impact of tariffs on Canada, I am medium term,
one one thousand percent, one million percent a google percent
confident that Canada will that Canadians will stand up for Canada,
(26:09):
that we will get through this and we will get
to a win win position with the US. I'm to
me that is absolutely clear, because that's what.
Speaker 4 (26:16):
The economic fundamentals say.
Speaker 3 (26:19):
But I am also not naive about how hard it's
going to be along the way. This is going to
be a very challenging economic situation for US. Tariffs will
bring in revenues for sure, our counter tariffs will our
retaliatory tariffs, and we need to use that money to
(26:39):
support Canadian families, to support Canadian businesses, but it will
be also an economic hit to Canada, and so I
think we need to see where that goes before committing
to any specific targets. It's just like with COVID, Right
Like during COVID, we did the right thing as a country.
We did spend money to support Canadians, to support Canadian families,
(27:04):
and the result in Canada was an economy that came
through it in much better shape than we came through
the two thousand and eight financial crisis, and actually.
Speaker 4 (27:14):
A really strong public health response.
Speaker 3 (27:16):
You know, if Canada had had US levels of mortality,
an additional seventy thousand Canadians would have died. That is
the size of you know, a Canadian city like Fredericton
that many people gone.
Speaker 4 (27:31):
So yeah, I have.
Speaker 2 (27:33):
A couple of questions about revenues, and the first has
to do with the capital gains tax height that you
introduced and supported. You've since come back on that. It's
not something that you support putting in place now. I
gather because of the context we're in, Donald Trumping reelected
the prospect of these tariffs. Part of that was raising revenue.
I gathered nineteen billion Canadian dollars over five years. How
(27:56):
do you replace that if that doesn't come to pass.
Speaker 3 (28:00):
Let me just start by saying, you know, as I
said about my views during the fall, I take President
Trump really seriously. Uh, and I do believe we need
to be building our policies given that new reality. I
think as Canadians, by the way, we need to see
(28:20):
some real opportunities in that new reality. So, you know,
there are some sort of hoary old chestnuts of Canadian
public policy stuff that we all kind of know would
be a good idea to do, but it's just so hard.
So if you were a Canadian journalist, you would know
inter provincial trade the holy grail of every single Canadian
(28:42):
public policy thinker.
Speaker 4 (28:44):
Very easy to say, it's.
Speaker 3 (28:45):
A good idea, hard to do with, and easy to
get the idea right. Like, if another country is threatening
trade measures against US, maybe a good place to start is.
Speaker 4 (29:00):
Let's trade with each other for goodness sake.
Speaker 3 (29:03):
And so I think now, in the face of the
US threat, it's a great opportunity to do that, and
I think you're really seeing some national will around that.
I think it's a great opportunity to say, guys, we
have to stop getting in our own way. We have
to make it easier to build stuff fast in Canada.
(29:25):
We have to cut red tape and get big projects
built because.
Speaker 4 (29:30):
We're going to need it.
Speaker 3 (29:31):
So I do want to be clear that there are
some opportunities and you know, in terms of where are
we going to find revenue. I'm not unveiling all of
my platform here today with you, David, even though I
am enjoying the conversation immensely, But we have some really
good ideas that I look forward to sharing with Canadians.
Speaker 2 (29:53):
There's a fiscal question about your about face on that
particular tax. I think there's a larger question about the
way that you. You advocated for it in months past,
so you kind of couched it in moral terms. You
had a message to the wealthiest people in this country
that this was something that they had to do on
moral grounds. There shouldn't be hungry kids going to school,
for instance. For somebody who listened to you talking about
(30:14):
it in that way and sees you moving away from it,
what do you say if they question your kind of
commitment to political principle because of.
Speaker 4 (30:22):
That income inequality and.
Speaker 3 (30:27):
What Canadians might call a just society, a society where
we take care of each other, has been a kind
of central principle of my life and my thinking since
I became a sentient human truly, Like I come from
a small town in northern Alberta. It's really really cold.
(30:51):
You're cold in Toronto today. It gets down to forty
below regularly in the winter. And people in the Peace Country,
they are frontier men. My family were pioneers, very proud
of that, very tough, very entrepreneurial. But like the patron
Saint of the Peace Country, his motto was what people
(31:13):
said about him was he was every man's friend and
he never locked.
Speaker 4 (31:17):
His cabin door.
Speaker 3 (31:19):
And that is a very powerful thing that I've known
since I remember knowing words, and I do think we
have to take care of each other. I wrote a
book about income inequality and sort of the rise of
this global plutocracy and the hollowing out of the middle
class before I entered politics. I'm really proud of the
(31:40):
things we did. I did in government to push against it.
The Canada Child Benefit a huge measure that has lifted
Canadian families, Canadian children out of poverty. I spoke yesterday
with an Afghan Canadian woman who's going to be running
(32:00):
for the Liberal Party in the next election, and she
told me how she came to Canada. She was married,
very very young, she had three children. It was a
difficult relationship. She left the relationship and she said, I
slept with my kids in our Honda Civic for nearly
a year and then the candidate and think about that,
(32:22):
and she said, one kid on each seat, one kid
on the back seat.
Speaker 4 (32:26):
And she said she slept where the feed are.
Speaker 3 (32:31):
And she's not self pitying. She's now running as a
Liberal candidate. Okay, she has a good job. She's running
And she said, what made it possible for me and
my kids to get out of the Honda Civic and
for me now to be a candidate for the Liberal
Party is the candidate child benefit. And she was just
counting the days until she got that. So we have
put some really really good programs in place. I'm also
(32:53):
very proud of the national system of daycare ten dollars
a day daycare. Great for family, Emily's great for allowing
women to have a kid and have a job. Also
a great driver of economic growth. So I believe in
all of that. I also know that today for Canada,
(33:17):
the most significant economic fact and reality is that Donald
Trump is president with a plan to change the world.
Speaker 4 (33:27):
And we don't need to be afraid of that.
Speaker 3 (33:29):
We need to have a plan to deal with it,
and we need to recognize the magnitude of the challenge.
You know, John Maynard Kaines had this great line, when
the facts change, I change my mind, sir, what.
Speaker 4 (33:40):
Do you do?
Speaker 3 (33:41):
And the difference between a United States with Joe Biden
or Kamala Harris as president, both of them intended to
raise the capital gains rate, versus a Donald Trump as
president is huge for Canada. You know, we started off
in the conversation talking about one of my.
Speaker 4 (34:01):
Sort of core.
Speaker 3 (34:02):
Understandings about Donald Trump, and that is that one of
his objectives is take all the world's money. You heard
that in the Davos speech, right, He was like, guys,
invest your money and can't in the United States.
Speaker 4 (34:16):
It'll be great.
Speaker 3 (34:18):
Invest your money outside of the United States, it will be terrible.
So he wants to suck in all the world's investment.
He wants to suck an investment by Canadian businesses.
Speaker 4 (34:27):
And for Canadians, it's the easiest thing in.
Speaker 3 (34:30):
The world to invest in the United States. So we
right now have to fight. We have to fight for
Canadian jobs, we have to fight for Canadian businesses, we
have to fight for Canadian investment. And that does mean
we have to change our policies.
Speaker 4 (34:46):
And I do that.
Speaker 3 (34:49):
Without any apology whatsoever. I do that because we have
to put the national interest first.
Speaker 2 (34:56):
Wrapping up here, let me ask you about the party
today and what it's going through, what this campaign represents.
And I guess I'm bringing my bias to the table here,
but thinking about what's happening within the Democratic Party in
the United States after this election, is it a fair
parallel as they think about who their base of support
is who they represent, how big a tent they have.
Are you and your party going through something similar similar undulations?
Speaker 3 (35:21):
That is such an interesting question. You're the first person
who's asked me that question, and I'm glad you have
because I think about it a lot, and I do
think for us as a party, having this leadership race
is incredibly healthy. We are seeing a surge of new
memberships in the Liberal Party, we are seeing a surge
(35:44):
of interest. We're having conversations that we haven't had before.
One of the things that I really believe we need
to do, and I'll leave it to you to judge
and your listeners whether Americans need to do it to
is where I think the Right has been effective in
(36:08):
recent months and years is in finding ways to connect
with its own grassroots supporters, in finding ways to make
regular people feel that they were being listened to and
that they were driving what the policies would be. I
(36:30):
would say that our party had become less effective at that.
I think inside our party we had allowed the grassroots
to atrophy. As a government, we functioned in a very
kind of you know, star system.
Speaker 4 (36:52):
One man banned.
Speaker 3 (36:55):
Decisions taken right at that apex and flowing down, and
that's not good for democracy. And you know, if I've
been spending a lot of my time meeting with grassroots
Liberal supporters and with Canadians who you might describe as
(37:16):
liberal curious, and you know what I think, you know,
the hardcore liberal supporters. What I've heard them say is
if the only time you talk to us is when
you want us to write a check or knock on
a door or put up a lawn sign, don't.
Speaker 4 (37:32):
Be surprised if we're disengaged.
Speaker 3 (37:34):
So I see this moment, certainly for us here in
the political center in Canada, in the Liberal Party, as
an opportunity to, you know, with a huge amount of
energy and conviction, reinvent how we are working as a party,
to really listen to Canadians, to listen to Liberals, to
(37:59):
say to them.
Speaker 4 (38:00):
You're the boss.
Speaker 3 (38:02):
You're the boss of the party, and to Canadians, you're
the boss of the government. And these are kind of
words that are easy to say. I think it's important
to put in structures that make that the case. And
so last week I put forward some very specific proposals.
Speaker 4 (38:23):
On reform of our party.
Speaker 3 (38:27):
One of them, maybe the most important one, is you know,
I don't know about you, David, but a way to
understand who your boss is is.
Speaker 4 (38:37):
To know who has the ability to fire you.
Speaker 3 (38:40):
And so what I have promised is, if I am
chosen as leader, one of the very first things I
will do is say to the party membership, I want
you to come up with a mechanism for a leadership review.
I want you to have the right and the tools
to fire me. And I can assure you when we
(39:03):
give Liberal Party members that authority and that power, you
will have a Liberal leader who is much much more
responsive to the grassroots of the party, and you will
have a stronger and better party and you know what,
you will make Canadian democracy better.
Speaker 2 (39:20):
Quick follow up to that, could term limits have solved
this problem? Clearly that was something that was preventing the
party from thinking about who would come next.
Speaker 3 (39:28):
And when we are a strong and vibrant parliamentary democracy.
And I don't think grafting features from a US presidential
system onto our own is really good idea.
Speaker 4 (39:41):
But no, no, but no, but no.
Speaker 3 (39:43):
But where I think you're driving at I agree with,
which is the leader cannot be the person who decides
whether she or.
Speaker 4 (39:57):
He continues in that role.
Speaker 3 (40:00):
We need to be sure the grassroots have much more
authority than they have today. I think we need to
be sure that caucus members have much more authority than
they have today, which is how parliamentary democracies in the
Westminster system work in other countries. And I do absolutely
believe that it was wrong for the leader alone to
(40:24):
be the person who decided whether he continued in government.
Speaker 2 (40:30):
Just kind of in the time horizon of this campaign.
I'm very curious how you'll go about differentiating yourself from
your closest rival here. So I look at your biographies.
Grew up in Alberta, went to Harvard, graduate school at Oxford,
government service time on the international stage. What are going
to be the different differentiators between you and Mark Corney
(40:51):
going forward here?
Speaker 3 (40:53):
Well, talking about if we're going to start with the biography,
I think there are some crucial differences. One is I've
been a politician and politics is something that.
Speaker 4 (41:09):
I think you need to you know, where experience helps.
Speaker 3 (41:15):
Margaret Atwood has this great line where at a dinner
party she was talking to a neurosurgeon and the neurosurgeon said,
I'm planning to retire soon, and then I want to
write a novel.
Speaker 4 (41:25):
Do you have any tips?
Speaker 3 (41:27):
And she said, Oh, that's so interesting, because I'm planning
to retire from being a novelist and I'm going to
be a neurosurg any tips for me.
Speaker 4 (41:33):
So, like politics, it's a thing, and.
Speaker 3 (41:37):
For sure you get scars doing it, but you also
learn stuff, and that particularly applies to dealing with other
countries and dealing with tough negotiations. It is one thing
to be a technocrat. It is one thing to be
a bureaucrat responsible only to your own bureaucracy and ultimately
(42:02):
to your political masters. It is another thing to be
an elected politician, responsible to your country and your citizens,
and to go mano amano with the tough guys of
the world.
Speaker 4 (42:14):
That's something I've done. Canadians have seen me do it, and.
Speaker 3 (42:18):
Crucially, the tough guys of the world have seen me
do it. So I would say that is an absolutely
critical difference.
Speaker 2 (42:27):
Last question, how determined are these next few weeks going
to be for Canada? Yes, in the context of this campaign,
but as we're facing this, this very first deadline. In
your letter you talked about the gravity of the moment.
How do you see it in the context of history huge, you.
Speaker 3 (42:44):
Know, I think we are at a hinge moment for
Canada and also for the world. I think this is
a time when you know that period we had that
remember the end of history? Do you remember that the
end of history is now ended? And I would say
(43:05):
even that rules based international order that we built so
painstakingly after the Second World War, I think that is
being shaken up. The kind of peak globalization we had
with China's entry to the WTO, that.
Speaker 4 (43:22):
Is being shaken up. So you know, the tectonic.
Speaker 3 (43:25):
Plates of the global political system and the global economy
are shifting right now, and that matters for Canada. And
at heart, the reason that I am running to be
leader of the Liberal Party and the Prime Minister of
Canada is I have a plan for how Canada cannot
(43:49):
just survive this shifting.
Speaker 4 (43:50):
Of the plates, but absolutely.
Speaker 3 (43:53):
Thrive as these plates shift. Thrive because the things we
do at home, but also thrive because I have a
real vision of how this reordering can happen in ways
that are good for Canada and good for the United States.
(44:14):
And I know that that is something we can work
on together.
Speaker 1 (44:19):
That was Bloomberg's David Gourup and former Canadian finance minister
and Liberal Party leader candidate Christopher Freeland. And this is Bloomberg.
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