Carney's Double Defeat: High Priest of Project Fear Loses to Trump, Plunging Canada's Industrial Heartlands Into Crisis

Jon Liedtke joined The Gene Valaitis Show on Niagara's 610 CKTB to discuss Canada's Budget 2025, Brexit, and the role of PM Mark Carney.

The 'I've Seen This Movie Before' moment is over.

Prime Minister Mark Carney, the former Bank of England Governor known for his dire Brexit warnings, is now fighting for his political life as his own nation’s economy buckles under a catastrophic "Pincer Crisis."

External to the crisis is the escalating trade war, with President Trump's tariffs on Canadian steel (50%), autos (25%), and energy (10%) crippling industrial heartlands like Hamilton and Windsor. Mass layoffs are looming at plants like National Steel Car, forcing thousands of workers onto the unemployment line.

Internally, this external shock is hitting an already fragile economy. With GDP per capita declining for three years and a public debt burden soaring, the economic foundation is crumbling.

Carney’s government narrowly survived a confidence vote, passing a record-setting $78.3 billion deficit budget—a "Trump-Tariff Shield"—designed to buy time and retool industry. The current amount of tax dollars required to service the debt is $1 billion every Saturday night (the start of the new week) - with critics calling it a "$5,400 debt tab" for every family. The question is no longer about recession, but whether Canada's economic model and its political sovereignty can survive this multi-front crisis.

Mark Carney, Brexit, and Trade Issues

• Mark Carney, who was the Governor of the Bank of England during Brexit, was known as the "high priest of Project Fear" due to his dire warnings about economic damage and recession if the UK were to leave the EU.
• The immediate recession he warned about didn't materialize after Brexit.
• Carney is currently framing Canada's massive deficit spending as a "Trump survival plan" to prevent a recession from US tariffs.
• Both in the UK and in Canada, Carney has argued he was performing his duty to warn of risks to financial stability (UK) and economic stability (Canada).
• Canada still does not have a trade deal with the United States.

Impact on Canadian Industry

• The lack of a trade deal and the current tariffs are negatively impacting the steel industry and the industrial heartland, including areas like Hamilton, Brampton, Windsor, and Sarnia.
• National Steel Car, located in Hamilton, is expecting mass layoffs because they haven't had new orders since tariffs on steel imports came in during the spring.
• More than 70% of Canada's exports go directly to the US, and a third of the national income comes from exports.
• The current situation is precarious because, if the tariffs are not removed, industries in the industrial heartland cannot afford to keep waiting.
• The real concern is that if Donald Trump were to be involved in renegotiating the USMCA, he could potentially tear up the entire agreement and apply tariffs to everything.

Missed Opportunities in Diplomacy

• The Foreign Minister, Anita Anand, missed a "golden opportunity" to bring up trade talks with US State Secretary Marco Rubio during a meeting of G7 Foreign Ministers in Niagara-on-the-Lake.
• The minister said it was not her job to address the trade issue, seemingly leaving it to another minister.
• Canada's allies, including the EU, China (receiving a one-year reprieve on a tariff), and Mexico, have had some success in securing or advancing their trade agreements, making Canada's position stand out.
• The question remains why Canada is waiting to address this critical trade relationship, especially since the Prime Minister has been traveling internationally instead of engaging with the US.
• A key reason why seeking trade with Europe is difficult is the high transportation costs compared to the integrated rail and road system with North America.

Episode Transcript

Speaker 1 (00:00):
It's Jeane Belitis on Niagara's News and Song six' ten C.
Ktv all, right it's A tuesday and you can get
a hold of me right. Now though our regular contributor
here on A tuesday, Morning John litkey is joining. Us,
John good, Morning.

Speaker 2 (00:16):
Good, Morning.

Speaker 1 (00:17):
Jean, hey great to have you. Here, wow the budget.
Passed and that, means As i've pointed out a number of,
times maybe too, often that When canada goes to bed
On saturday, night the amount of tax dollars to service
the debt is one billion. Dollars not just not on occasional,

(00:38):
weeks it's every Single saturday, night Because sunday starts the new.
WEEK a billion. Dollars that'll Happen saturday night Next, saturday billion,
DOLLARS a billion, dollars a billion. Dollars and this is
a budget That Mark carney, owns and it was a
passed last. Night, Now Mark, carney before he came back To,
canada was the governor of The bank Of, england and

(01:00):
he was the governor over in THE uk During, brexit
and we don't have a trade, deal and that was
a trade. Deal so if you take a look at
his experience With, brexit and if you take a look
at the fact that we don't have a trade deal
with The United, states how's this all going to? Unfold

(01:20):
and how do you see?

Speaker 2 (01:21):
It you, know there are remarkable similarities here and it
should be remembered That Mark carney was referred to as
The High priest Of Project fear when he was The
governor of The bank Of england because of his dire
warnings that he made about economic damage and a recession
if THE uk were to leave THE. Eu and he's
doing really the same thing right now as framing our

(01:42):
massive deficit spending as A trump survival plan to prevent
a recession FROM Us. Harris, now things didn't work out
for him that well During brexit when he was The
governor of The bank Of, england the immediate recession didn't.
Materialize brexit supporters branded him AS i said The High
priest Of, fear said that he was politically biased here
though he has survived the confidence, vote but he's still

(02:04):
facing accusations of living in a fiscal fantasy. Land THE
pbo has said that an over alliance on capital spending
is being. Redefined but you, know in his, defense in both,
instances he argued that he was performing his duty to
warn of the risks to financial stability in THE uk
and economic stability. Here he seems to have a lot

(02:27):
of rope right now still in the marketplace of. Ideas
it really comes down, to, though If canadians tire Of Donald,
trump how long Is Mark carning going to be able
to frame this as an existential dire threat and not
his own.

Speaker 1 (02:42):
Actions, yeah you, KNOW i like to use real world,
examples and you know In West NI i grew. Up
we Have, Hamilton ontario home With stelco and a number
of other companies that produce steel and steel related. Materials
by not having this trade deal in effect with THE
us house It, so how's it going to affect the
steel industry that this whole region relies.

Speaker 2 (03:04):
On, yeah no, kidding, Right we Saw National steel car
is expected to see mass layoffs just before Come. Christmas how.
Terrible they haven't had any new orders since the tariffs
came in on steel imports in the. SPRING a third
or our national income comes from our. Exports more than
seventy percent of that goes straight to THE. Us and
while a majority of our goods are still protected under

(03:25):
the UF's Mca trade. Agreement these sector specific tariffs are
really hurting, us the steel and, aluminum the car, tariffs
the energy. TERRAFFS i mean we're talking right There, Starnia, Hamilton,
brampton windsor the industrial heartlands that we have in this country,
here and we can't really make it that much longer

(03:46):
if these tariffs don't get removed or a resolution doesn't.
Come and then the real concern is If Donald, trump
we've got the renegotiation of THE usmca trade agreement coming,
up he could use that to really just start whipping
us all over the. Place and you know, what maybe
we just tear the whole thing up and everything gets
put under. Tariffs so this is a really precarious.

Speaker 1 (04:05):
Situation, yeah you, know it's interesting you bring up the
example of a national steel. Car as soon as the
tariffs went into, place like everybody just stopped ordering from.
THEM i, mean everything just.

Speaker 2 (04:16):
Disappeared, well you, know we saw that as well here DURING.
Covid when there are interruption to supply, chains when there
is uncertainty in, industries in, finance and people don't want
to you, know get their feet, wet capital dries, up
people get conservative with their, money they put it into
places where that they feel is more. Comfortable and if that,

(04:38):
means you, know procuring your product in The United, states
that's one way to do, it to beat the. Tariffs
and if it means not investing in other, jurisdictions that's another.
WAY i just saw YESTERDAY gm gave most of their
suppliers until twenty twenty seven to remove their entire supply
chains From. China so we're watching a major de coupling

(04:59):
of The United states from the global trade system that
we've come to know over the past you, know sixty.

Speaker 1 (05:04):
Years, yeah you, know here's SOMETHING i can't figure. Out you,
know here in The niagara, region Specifically niagara on The.
Lake last week THE g seven foreign ministers met and
it was hosted by our foreign, Minister Anita anand now
she met up With Marco, rubio THE Us State, secretary
on three different. Occasions and she was asked by a, reporter,

(05:25):
well did you bring up the subject of getting the
trade talks going? Again and she said, no basically saying,
well without actually saying, it she, said, well it's not my,
job and she was leaving it up to another, Minister
BUT i, mean come, on you have the golden, Opportunity,
marco let's get these talks. Going and she said. No

(05:45):
and in her comment she was going on about The haitian. Dispord,
oh it was a word, salad not even worthy of
being called a. Salad did she not miss a golden? Opportunity, John,
oh she absolutely.

Speaker 2 (05:58):
DID i, mean this is This you use every opportunity
that you. Have do a pull, aside do a grip and,
grin whisper in his. Ear for gosh, sake can just
say can we get over this? Please you know that
this is hurting you guys. Too we don't want to
have this fractious. Relationship but when you look at our
allies right, now you has secured a, Deal china has

(06:19):
even received like a daytime for a. Year And. Mexico
the day After trump ripped up our trade agreement, negotiations
The mexican President, steinbaum she came out and, said you, know,
hey our talks with THE us is going really really.
Well and it was, almost you, know just sort of
a spit in our. Face so we missed an opportunity
there with our foreign. MINISTER i don't know what it

(06:39):
is that we're. DOING i thought maybe the strategy was
they were waiting to secure a majority government so that
they actually would have that kind of you, know credence
to walk Into Donald trump and, say, Look i'm an
equivalent to, you but we're not having an election, Now
so what are we waiting.

Speaker 1 (06:54):
For, well that's a very good. Question AND i think
Our prime, minister because he lived over, there wants to
get closer to The. Europeans but there is no way
on earth we could possibly do the amount of volume
and trade that we do Between canada and THE. Us
SO i don't know why he's looking At.

Speaker 2 (07:12):
Europe you, Know diversification is it's really, smart it's. Good
we've seen what happens with an over alliance of all
your eggs in one. Basket BUT i got to agree
with you on, That and one of the main reasons
is transportation. Costs for gosh, Sake i'm getting something across
an ocean versus the integrated rail and road system that
we already have here In North. America so we've got

(07:33):
to fix this. Relationship and what we really need to
do is make sure that whatever the next administration is
doesn't continue these policies because they see the benefits for them,
domestically because otherwise we could end up in a multi
generational situation.

Speaker 1 (07:47):
Here, now you, Know President trump was not a fan
Of Katy perry's boyfriend and they didn't get. Along and
because of that, tension you, Know Doug, ford Before Mark
karney got, Elected Doug ford was really the spokesperson For
canada and then he ran that commercial and that Got crump.
Upset do you Think carney is just kind of Blaming

(08:10):
ford for all the problems and is just sitting back
and waiting for the right time to get this thing.
GOING i don't know what he's waiting, for, though.

Speaker 2 (08:17):
Killing and that's the, question. RIGHT i, mean it seemed
like they were doing a good cop bad cop. Thing
Doug ford was able to come out and brash his
stomach and be the eight hundred pound gorilla that he
always talked. About and then we presume That Mark karney
behind closed doors was being the smart column, technocratic diplomatic.
Politician but, again the key question is what are these

(08:39):
people waiting? For because these industries in our industrial heartland
can't afford to keep on. Waiting and while this budget
does provide relief in certain, circumstances it's all still administrative
and being able to pay WORKERS ei isn't really the
best thing when you're looking to revive industries keep them. Going,

(09:00):
yeah that's a band.

Speaker 1 (09:01):
Aid and the interesting thing is nobody's flying off to
The United states this. Week in, fact The Prime minister
is heading off to The United Arab emirates and then
To South. Africa since this guy was, elected just in
terms of, travel he has circumvented The earth four. Times
that's how much how much time he's put in on.

(09:23):
Airplanes so we're not dealing with THE. Us he's off
to The Middle. EAST i don't. Know it doesn't make
sense to, Me, John it doesn't.

Speaker 2 (09:30):
Make sense to. ME i don't get paid the big
bucks to sit in THE tmo and make the decisions or.
Advised but IF i could be suggesting one, thing it's
yet this major trading relationship that we have with the
best friend that we have on this planet back in.
Order we're going through a bad relationship right, Now but
like all, relationships there's, nups there's. Downs we might have
to make some concessions here or. There but if we
just keep putting our feet in the sand and refusing

(09:53):
to even engage in negotiations on. Things i'm not saying
that hold your cards, entirely but we've got to at
least play the game a little. Bit it doesn't even
seem like we're sitting at the. Table it seems like
we're outside of the.

Speaker 1 (10:03):
Casino, yeah no, Kidding, john thanks so much for this.
Today we'll talk to you Next. Tuesday thanks. You, okay
there he Goes John, lidkey always giving us his perspective
on world. Affairs