Trudeau, The Liberal Party, Tariffs and Trump

FRANK MCKENNA: What Trump has been saying is not truthful. He's talked about a $200-billion trade deficit with Canada. That's just not truthful. Both quantitatively and qualitatively, there is no case against Canada.
PETER HAYNES: Welcome to the January 2025 episode of Geopolitics, with the Honorable Frank McKenna. My name is Peter Haynes at TD Securities, and I host this podcast series each month, where we get to hear perspectives from Frank on global geopolitical issues.
Well, Frank, I can't remember a time in our five years doing this podcast together where there's been more topics to cover. I hope you're ready to go because I'm going to come right at you in rapid fire.
The plan is for us to cover all of the recent goings on in Ottawa and with respect to Canada's potential trade war with the US. And then at the end, I'll get your predictions for a couple of key global topics of interest. After all, it is January, and that's what we do at this time of the year. Are you ready to go?
FRANK MCKENNA: Yeah, I am ready to go.
PETER HAYNES: All right. Let's get ready and get started here with the Liberal leadership race, which will be decided on March 9, at which time a new prime minister for Canada will be sworn in.
As you had predicted on our last podcast, there would be a lot of hats that circle the ring, but in the end, there would only be a few legitimate candidates. As it stands, there are two lead horses, I think, in Chrystia Freeland and Mark Carney, and then a group of others from inside the party, including up-and-comer Karina Gould from Burlington.
First of all, what did you think of Mark Carney's appearance on Jon Stewart last week and his subsequent leadership announcement? And then compare that with Chrystia Freeland's arguably less flashy announcement on social media, and she had a rally this weekend. And how do you handicap the race?
FRANK MCKENNA: I thought Mark Carney had a good performance on Jon Stewart. It certainly created a lot of buzz. I must have had that video circulated to me half a dozen times, and he looked relaxed. And when Canadians see somebody on US TV, they have a certain level of importance.
So I thought that was good. His launch wasn't too bad, considering the teleprompter broke down and he had to ad lib it, which is always a little disconcerting. And I thought Chrystia Freeland had a good start. I'll come back to that in a minute.
But first of all, a little oddity that people may not notice-- Carney, Chrystia Freeland, and Karina Gould all have one thing in common-- all have degrees from Oxford University. And if you took the others who could have been in the race but weren't-- Mélanie Joly, Jonathan Wilkinson, Anita Anand-- you'd have three more from Oxford. So it shows you that Oxford University is alive and well with their political class in Canada.
OK, cut to the chase. I thought Carney had a good beginning. He's raised $125,000 in 24 hours, attracted a lot of support from caucus, et cetera. He's getting a lot of buzz across the country.
Chrystia Freeland had a lot of protesters confronting her. But nevertheless, she put a very powerful video out, and she followed that up with an editorial in The Washington Post today that's worth reading. Bottom line is she's running straight against Donald Trump, and she's attracting cabinet support and so on for that.
Having said all of that, I still think that she's tied her wagon to Trudeau's star for so long, it's going to be hard to separate it out. And that does handicap her somewhat in the race. So if I had to handicap the race today, I would say it's Carney's to lose.
PETER HAYNES: And, Frank, let's just talk about the specifics because there were a lot of changes to how the Liberals will decide their leader. They're not going to allow 14-year-olds to vote anymore. And there was obviously the hurdle of money that needed to be raised. Can you just, for our listeners, explain, when we get to the convention, how the vote will work? Is it "first past the post" or how are they doing it?
FRANK MCKENNA: No, it's a ranked ballot, so the second and third place votes will become really important. And it's also weighted for each riding so that one riding doesn't end up having a predominant influence. So I think a weighting of 100 per riding.
A couple of weeks to sign up members, which is going to be very tough, organizationally, to do, which means the current list of Liberal Party members, which I think is around 80,000, is probably going to be the base. And then in terms of money, it's $350,000 entry fee. $50,000 of that is rebatable, I believe it is. And that money can be paid in over time. And then up to $5 million can be spent on the campaign itself. It's going to be a challenge, in such a short period of time, for candidates to raise the money and to do the organizational work to get delegates.
PETER HAYNES: Is there any person out there that could perhaps put their support behind one of those candidates that would tip the dial? I know Mélanie Joly came out this weekend in Carney's camp. I'm curious. Is there anyone out there that you think that if they gave the nod to one of these candidates, it would tip the scales?
FRANK MCKENNA: Yeah. No, it's interesting you asked that question. Joly did come out yesterday, and she arguably would have the most formidable political organization because she really is a machine politician in Quebec. So her support would be important. I've been more of the view that she needs to stay above the fray, and I think she will from now on because she's leading the Canadian response to Trump.
But there are other interesting names. Ahmed Hassan, I talked to yesterday. He is or will support Chrystia Freeland. And he's got a very strong ethnic network across the country that he can operationalize.
And then there's Dominic LeBlanc. He's the prize for everybody. Two of the candidates have asked me for help in getting through to Dominic LeBlanc because we're close friends. And he has a huge amount of respect within the caucus. So he would be very influential within the Liberal caucus.
As of a moment ago, my last indication from him, he hasn't decided. He's probably leaning on endorsing a candidate, but he could still sit it out as well.
I talked to Anita Anand yesterday, who's very influential because of how well she's handled her portfolio. It's her intention, in all likelihood, to stay out of the leadership race so that she can concentrate on her ministerial responsibilities, particularly directed towards the United States.
PETER HAYNES: Well, you mentioned the name Trump. And as we tape this podcast on Monday afternoon, Donald J. Trump is being sworn in as the 47th president of the United States. And for the past several weeks, he's been musing about placing tariffs on Canada and Mexico, along with other countries with a trade surplus relative to the US.
In fact, several of the potential liberal leaders in cabinet suggested that their reason for not running was to focus on the potential tariff dispute, as you just mentioned. By now, most Canadians have been educated that Canada's trade surplus is made up entirely of something the US doesn't have enough of, and that's energy.
How have Canada's leaders done in trying to convince Trump and his inner circle of this seemingly simple fact? And what do you make of Trump's decision, which he's come out with today to, quote, "study tariffs" rather than sign an executive order immediately upon becoming president and putting that tariff in place?
FRANK MCKENNA: Yeah. It's nice that we have all of this news dripping wet. I think the proof of the pudding is in the eating. And I think the Canadian delegation, both at the first minister's level and premier's level and industry level, have done a good job. And that's probably why he's backed off putting tariffs against Canada today, or possibly that's part of it.
So let me say a couple of things. First of all, I want people on this to understand, what Trump has been saying is not truthful. He's talked about a $200-billion trade deficit with Canada. That's just not truthful.
What we need here, and I hope this study period will produce it, is a set of common facts. And the fact is that of about nine countries that make up the trade deficit that the United States has, Canada is ninth. And not only are we last in that list, we have the largest trading relationship with the United States. So as a percentage of the trading relationship with the United States, we're last, and last is good.
And then you go to the other measure, which is the qualitative nature of the trade imbalance. China's got a $300-billion trade imbalance with the United States. And it's almost all on manufactured goods, which arguably do hollow out jobs in the United States. Mexico has got a couple of hundred billion trade imbalance, which, as you know, is around manufactured goods, which arguably hollow out US jobs.
We do not have that. When it comes to goods, like manufactured goods, we are on the wrong side of the ledger. We actually have a deficit with the United States. The only reason we show any surplus is because of over $100 billion of oil and gas, which is essentially shipping jobs out of Canada to the United States.
So both quantitatively and qualitatively, there is no case against Canada whatsoever. Not only that, there's a small, little item that maybe we shouldn't ignore, and that is a hotly-contested free trade agreement called CUSMA, negotiated by one Donald Trump, which should give us legal protection for the trade relationship.
So for all of those reasons, I'm pleased that they've taken time to study because the alternative would be a disaster. If the United States were to produce 25% tariffs against Mexico and Canada on day one, we would end up having both of our countries, Mexico and Canada, probably driven into a recession. And we would have a spike in inflation in the United States of America. We'd have a strong response in the bond market, and we would have an even stronger response in the currency market, and probably a strong response in the stock market.
So I think cooler heads have prevailed. And now, hopefully, we can get down to dealing with facts.
PETER HAYNES: So the devil's advocate would argue, with a leadership vacuum in Ottawa and a lame duck prime minister, the rest of Canada can't be confident that our country can put its best foot forward during these early months of Trump's term in office, especially if he's thinking about tariffs as one of his first orders of business. Convince us that our government is going to be able to defend us properly.
FRANK MCKENNA: Day one, Trump had promised 25% tariffs on Canada. Instead, he's agreed to study it. I deplore the vacuum. I do. I think Trudeau deserves a lot of criticism for the way this has all transpired. But this country is not just one prime minister. It's premiers from all across the country, all of whom are doing heroic work at talking to their colleagues across the border, governors, and business people in their sphere of influence. All the way from Prince Edward Island to British Columbia, they've undertaken delegations to the United States.
Our cabinet ministers-- you've seen Joly out. You've seen Dominic LeBlanc out-- the leaders of our movement. I had a long chat with Anita Anand this week, and she's going to be looking at trying to crack open interprovincial trade barriers within Canada as a method of dealing with this crossborder threat to us.
What I'm saying to you is, yes-- do we have a vacuum? Yes. But I've seen a great coming together of Canada, from labor unions to industrial organizations, to premiers, just to cousins to cousin and friend to friend across the border. And I think at the end of the day, the vacuum is being filled with a real Team Canada approach.
PETER HAYNES: Yeah, I'm going to ask you about your thoughts on patriotism coming out of this in just a second. But I kind of feel like we're back in economics 101 right now.
When we hear arguments from the likes of tech entrepreneur Marc Andreessen, who argues that the greatest period in American history for innovation occurred during a period with high tariffs, which was the Industrial Revolution of the late 1800s, how do you think President Trump and his economic advisors can convince a steelmaker in Pennsylvania to build a new plant because there's tariffs on steel coming in from outside the country, when most economists think putting up a trade wall around the United States is not the proper long-term solution?
And I'll just add to that, before you answer that question. I was speaking to a friend in the local community, where I help out with the baseball program, this weekend. And they run a manufacturing company, and it was asking for a sponsorship. And they said, we're cutting back on sponsorships. Our expectation is that the Trump tariff threats is going to make this a really bad year for our company.
And I'm sure, Frank, that is being said from coast to coast. But even in the United States, how can Trump convince that steelmaker in Pennsylvania that they should build a new plant when these tariffs, we all know, are not the right thing, long term?
FRANK MCKENNA: Yeah, last point first. One of the greatest dangers is not the tariffs. It's the apprehension of tariffs. And I do hear it all across the coast. It has the potential to freeze investment in our country. And that's very unhealthy.
You've quoted the tech entrepreneur, Marc Andreessen. Well, that was back in the 1880s. A more recent example, although not recent at all, is the Smoot-Hawley Act, which was enacted in 1930, put tariffs on 20,000 goods. It is considered by every economist to be the greatest single contributor to the Great Recession.
And I think it just goes without saying that if you put tariffs on products, you lose out on the Ricardian theory of comparative economic advantage. And you end up having consumers paying more for goods, having less money in their jeans to buy others.
I, very simply-- and I declare my bias-- I'm a globalist. I believe that a rising tide lifts all boats. Having poorer countries in the world lifted up allows them to buy goods, expensive goods, from richer countries like ours, and we're all better off for it.
And so I just profoundly believe that tariffs are the sweetest word in the encyclopedia, as Trump says-- I think one should approach tariffs with extraordinary care because they have a way of backfiring and creating economic havoc.
And I've mentioned this before, but I'll mention it again. President Trump obviously enjoys the support of Americans, and I respect that choice. All Canadians respect that choice. But with all the power that he has and all the billionaires in his pocket, he can't control the bond market, and he can't control the foreign exchange market or the stock market. These markets already, I think, are sending flashing signals about the danger of a tariff war.
PETER HAYNES: Well, he does watch the Dow. We know that. So you're right. The market will tell him what's happening and what the market thinks of his policies.
One issue that I know you've been very active in, Frank, behind the scenes, is Canada's response to the tragic wildfires in Los Angeles. Can you tell our listeners a little bit about Canada's role in helping the US? And between the wildfire response and the tariff debate, which political leaders in Canada have impressed you the most in these difficult circumstances?
FRANK MCKENNA: I guess my reaction was shaped by my experience. I was the ambassador of the United States when Katrina hit, probably the worst storm in the history of the United States. And I thought that this was a terrible tragedy, but it was also an opportunity.
So I called immediately to Rick Hillier, who was the chief of our Defense Force, and said, is there anything you can do? He said, look, I've got a frigate doing drug interdiction in the Caribbean. I'll have it sailing up the Mississippi River before we get off this phone call. And he did.
And I spoke with Air Canada. They had a plane on the ground within hours, literally, as well. I spoke to President Bush a few days later and he said, Frank, you have no idea of how impressive it was to see that Air Canada plane on the runway and your frigate in the port doing heroic work on behalf of our citizens.
So I know that hearts and minds and winning them over is a big part of the campaign. So I felt the fires in LA represented a huge opportunity for Canada. So I started calling premiers and federal people across the country. And really all I was doing was pushing on an open door. They all were already mobilizing equipment.
I spoke to the premier in New Brunswick. They've got a big forest fire crew between the Irvings and the province, about 12 water bombers. They put them all at the disposition of our coordinated fire center. Saskatchewan has resources there. Alberta had water bombers down there. Quebec had water bombers there already in place. British Columbia had firefighters and water bombers.
I called Doug Ford and spoke to him in the evening. He said, by morning, Frank, I will do exactly what you're talking about. And he did a press conference, and he sent firefighters, and he sent water bombers down there. And he made the case that this is what neighbors do when neighbors are in trouble.
And I thought it was extremely effective. My only regret, a little bit of jealousy, is that the Mexicans weren't stupid, and the president of Mexico was out with the Mexican flag, waving the flag when their air support took off for California. But this is a case where we should have a Canadian flag plastered over everything that we're doing because people will remember this moment in history as a moment where neighbors helped neighbors.
And the other thing I would add to this, and I haven't had any traction on this yet to show that I don't have that much influence, you'll see in The Wall Street Journal today that there's a big story about how the materials are going to be assembled to rebuild California. And it's going to take a mammoth effort.
And so I've tossed in the suggestion to our government, why don't we speak to the government of the United States and talk about a moratorium on softwood lumber-- duties for softwood lumber and other building supplies headed to California? This would lower the cost dramatically and make a lot of product available for the rebuilding of California. I think that's what reasonable neighbors would do in a situation like this.
PETER HAYNES: Thank you, on behalf of all of Canada, for the work that you're doing here to help us and help the Americans through this tragedy. Now, admittedly, Canadians know all too well that President Trump probably hasn't been listening too closely to this work being done. And he and his inner circle have been spending a lot of time trolling Canada and, in particular, our leader, Prime Minister Trudeau, with Trump himself referring to Trudeau as "governor of the 51st state."
For the most part, I believe all of the Trump bluster around using economic warfare to take over Canada has been met with-- and you touched on it-- a patriotic response by Canadians from coast to coast. That said, some of our fellow citizens are truly concerned about this rhetoric. Frank, is this manifest destiny? What can you tell Canadians about Trump's musings to put our collective minds at ease?
FRANK MCKENNA: Peter, I'm going to take a minute on this. But beforehand, I do want to register this caveat. I know we have many Americans who listen to this podcast. And I have to tell you, I speak for all Canadians in saying how much we respect you as neighbors and as allies and as friends and business partners. And we respect your right to make the choices that you've made. And we respect the way in which you run your country.
But we also are deeply in love with our own country. And we have no interest in being Americans, as much as we respect you. Canadians will never agree to not having publicly funded health care with universal access for all people. Is it perfect? No. But as imperfect as it is, it's available to every Canadian.
Our life expectancy is considerably longer than the United States. We would not trade that off. Our infant mortality rates are much better. The United States were amongst the worst in the world. We wouldn't trade that off.
Every piece of research on health care systems rates the United States as the worst in the world. We would not be prepared to go that way. We know that, at the top end, it's very high-quality health care. But universally, for twice as much money, it has some of the worst results in the world.
We would not accept inequality. The United States has the highest amount of inequality in the industrialized world. We're not perfect, but we do value greater equality in our federation.
We would never tolerate 400 million guns, a gun for every Canadian, in the case of Canada. We would never tolerate assault weapons on the streets or just the absolutely total disregard for gun laws. As it is, the biggest curse that we have in Canada-- weapons from the United States being smuggled across the border and responsible for 70% of the gun crimes in Canada.
Mexico has got the same problem. Jamaica's got the same problem. Every country in the world is afflicted with US guns being smuggled in. We do not want to sign up for that. We wouldn't sign up for an assault on reproductive rights. We're very supportive of national child care. We wouldn't want to change that or school lunch programs.
We're proud of our pension funds. We think they're the strongest and best-governed in the entire world. We wouldn't want to trade that away. And we're proud of how ferocious our fighters are. As [INAUDIBLE] pointed out in an op-ed, we were in the First World War and the Second World War years before our American allies, lost more lives per capita than they did, and we're amongst the most ferocious fighters in those campaigns.
We fought side by side with the US and Korea. We fought side by side in Afghanistan. The Joint Chiefs of Staff in Washington told me there were no better partners when it came to fighting than the Canadians.
So we're proud of that tradition. And we're also proud, if I can close off, by the fact that we've been able to create a country where, never perfectly, but always striving, we've been able to respect the rights of two linguistic communities, an officially bilingual country, an officially bicultural country, and one where we never stop trying to reach accommodation with our First Nations.
Those are profoundly important Canadian values that we're not prepared to trade. We know that the Americans have other values of great significance to them, but they're not our values. And for that reason, I think that Trump has done us a huge service in uniting Canadians across political lines and across geographic lines in a patriotic support of their country.
PETER HAYNES: And just wait till we beat them in the 4 Nations Cup in a couple of weeks, too, hey, Frank?
FRANK MCKENNA: [LAUGHS]
PETER HAYNES: I'll tell you what. You're not going to be going on that Jesse-- is it Jesse Watters' show that Doug Ford went on?
FRANK MCKENNA: That was insulting to Americans because it just made it look like all America, which is not true, had this profound belief that everybody in the world wanted to be American. I thought it was reprehensible that-- a statement like Jesse Watters saying, something to the effect of, doesn't everybody in the world want to be an American? Well, here's one that doesn't.
PETER HAYNES: I thought Doug Ford was spectacular in that interview, by the way, in just getting back to the point, not taking the bait. But my friends that watch Fox in the US tell me that he's a bit of a jokester, and you can't take him seriously. Well, I'm telling you, Canadians were taking that seriously.
So, Frank, you said when the history books look back on President Biden, he'll get a favorable grade for his accomplishments. And we can talk about his response to COVID, the CHIPS Act, and the Inflation Reduction Act, or IRA. When I debate Canadians about Prime Minister Trudeau's legacy, I am mostly getting negative reviews. In your opinion, how will Prime Minister Justin Trudeau be remembered?
FRANK MCKENNA: Well, I know he'll be remembered by me with a total lack of respect. One of the most important lessons of leadership is succession planning and how to do that appropriately, and what's happening here is a disgrace. Leaving it to the last minute, leaving a vacuum at this important time, not allowing the Liberal Party to renew itself appropriately-- all of that, I'm just disgusted with that.
I'm also a centrist in the [INAUDIBLE] tradition, the McKenna tradition, maybe the Gordon Campbell tradition. I'm not a left-winger at all. And I believe in fiscal probity and with progressive social values. So Trudeau and I part on all of those things.
But having said that, the history books are written with the full sweep of history. And you will have seen how Mulroney enjoyed such enormous respect at his funeral for his accomplishments, even though he was unceremoniously ushered out of office at the time.
I think that Trudeau will have points in his favor when history is ultimately written-- the way in which he dealt with the greatest peril of our time, the pandemic; negotiations with Trump on CUSMA; child tax benefits; efforts to reach an accommodation with First Nations; national child care; and the list goes on. So that will all go in his side of the ledger when history is written. Some of it will be kind, some of it unkind. But it will be better than it is today.
PETER HAYNES: Prime Minister Trudeau was asked at his press conference and when he announced his resignation about his greatest regret. And his answer was, quote, "not being able to change the electoral process in Canada." And that was a platform issue for him in 2015.
Trudeau favored a rank order voting system versus Canada's "first past the post" model that's in existence today. Trudeau's argument would be that if second place meant something, then it would force leaders to the middle of the political spectrum. I know there's a lot of debate about rank order versus proportional and other different voting systems. What are your thoughts on rank order balloting?
FRANK MCKENNA: There are lots of thoughts on it, but I'll say this. I thought that was a stupid comment by Trudeau, with respect to his greatest regret. First of all, if he had introduced rank order balloting, it would have resulted in almost permanent government by the Liberal Party, which is much more likely to be the second ballot for both the NDP, the Green Party, and, in fact, the Conservative Party.
And that would have been unfair. And other political parties fought against it because they knew it would be unfair. And I thought, to his credit, he pulled away from that. The alternatives then get into proportional representation. And I think it would have been a terrible crime to inflict that on Canada.
I just look around the world at countries like Israel, or Italy, or other countries that have proportional representation and how unstable their system of government is. I believe that we should elect leaders, give them stable government, stable mandates, let them do their job, and if we don't like them, throw them out. But I hate the idea of having them twisted and turned half a dozen different ways by trying to meet the political requirements of second, third, fourth, and fifth, and sixth-place parties.
So I just declare my bias on this one. For all of its imperfections, the "first past the post" system does produce the most stable government.
PETER HAYNES: It is amazing how people always have a better suggestion, until they realize the flaws with that suggestion. It's just amazing.
But let's talk about what the conservative critics will say about Trudeau's time in office. They're going to suggest that it was a time of, quote, "identity politics, where current Canadians were made to feel guilty for the sins of previous generations, which in turn makes us all less proud of who we really are and what our cultural identity is." Would you agree with this criticism? And if so, how would you suspect a Poilievre-led Conservative Party will address this issue?
FRANK MCKENNA: Well, I do agree with that criticism. I think we've had way too much revisionist history. Trying to go back a hundred years and revisit individuals, whether it's former Prime Minister MacDonald or others, I just think is not really there. And I don't agree with apologizing and the pandering and all of the rest of it. I think we should be looking out the windshield, not the rear view mirror. So I just am much more of that view.
And again, I recognize that reasonable people, even many listening to this podcast, would have different views. But I would much rather concentrate in the future, not on the past.
PETER HAYNES: What point do you think we're going to get a better sense of exactly what Poilievre, his platform, is going to look like? And how do you think he will stack up, assuming he wins the next election against Trump?
FRANK MCKENNA: I don't think that he's being unreasonable in holding back details of his platform. I've said it before, and I'll say it again, that a fish never gets caught if it keeps its mouth shut. And so the Liberals are self-imploding. So why would he-- why would he get in front of that?
He did throw a piece of red meat out, I think, in this past week, where he talked about reversing the capital gains tax. So there's a little bit that comes out here and there. And I think his supporters would say that he's drawn grand lines, which would give you a sense of where he's going.
How will he stack up against Trump? Who knows? Until they get in the arena, I can't even speculate on that. He's a skillful politician. I suspect that he would do fine. But again, I repeat, I don't think it ever should be one person in the war room here. We need an "all Canada" approach on this-- all the premiers, all the cabinet ministers, industry, labor, all of Canada.
I mean, this is truly a huge existential threat. This is the second time in the last eight years that Canada has been threatened to the extent it has by our neighbor. And whether it's bluster or bullying or negotiating, whatever, we have to take it seriously.
And I think we have to start looking at diversifying our markets, doing faster approvals for pulling oil and natural gas away from the continent, finding other trading partners, moving our critical minerals in other directions. All of these things will hurt America. But at some point, hopefully, America will come back to the table and say, look, we were just kidding, guys. We actually do like you, and we do need you.
PETER HAYNES: Yeah. And I guess we truly will go with the adage, "You never let a good crisis go by," if this can actually solve some problems. You mentioned Anita Anand focusing on provincial barriers to trade, which, in many ways, mirror the individual provinces going rogue on tariff responses.
FRANK MCKENNA: Peter, look, can I stop-- it's so right. There are so many good things that come out of this. Elon Musk is going to take a hammer to government. Well, I think we should take a surgical knife to our government, too. We need to reduce the size. We need to reduce the regulatory burden. There are all kinds of projects that are hung up in red tape. We need to get them approved.
We need to move gas out of the basin. We need to move oil out of the basin. All of those things I think this crisis will help precipitate. And we need to bring Canadians together and battering down trade barriers and dealing with our own issues and getting our own house in order. So those could all be good news items that come out of this.
PETER HAYNES: Well, we spent a lot of time covering Canada, and it was worth it today, just given the situation we're in. So I'm just going to finish up with a couple of quick predictions from you on the upcoming federal election, which I think we all know will happen in May, assuming that we have a confidence vote, once parliament returns from prorogue at the end of March.
My questions for you are as follows. Do you think the next liberal leader, whoever it is, will end up being the official leader of the opposition, meaning they come second? And is it possible to limit the Conservatives to a minority government at the federal election?
FRANK MCKENNA: So let's take it in order. The next leader of the Liberal Party, first of all, would be the prime minister of Canada.
PETER HAYNES: Right.
FRANK MCKENNA: And that will be everywhere from three weeks to six months. I know the Carney camp was strongly of the view that they can convince the NDP to hold support for the government until the fall, which would give him six or nine months, I guess, to try to prove himself. So he'll be the prime minister.
Then the view of all the camps is that there's a very narrow path for the Liberal Party to come back. And coming back could mean a minority liberal government again, which I think is highly unlikely. It could be a minority conservative government, which I also think is unlikely.
The recent EKOS polling, as of the last day or two, shows the Conservative lead down to 11 points, which is a dramatic shift in public opinion. My own view is that that's a bit of a dead cat bounce, will be hard to sustain. But there's no doubt that having Trudeau out and a new leader in gives the Liberals the best chance to hold on to the furniture when this thing all blows up.
If I had to guess, I would guess that we still are likely headed towards a majority conservative government. But there are green shoots for the Liberal Party now than there would have been two weeks ago or three weeks ago.
PETER HAYNES: Well, certainly as we move closer to that election, we'll have our friend and colleague Ron Ambrose on. And the two of you guys can look at the leadership race or the country for the next prime minister in more detail. I look forward to those conversations.
As we turn to the rest of the world here, as we finish up, I want to start on developments in the Middle East. It appears the US government helped negotiate a multi-staged peace agreement between Hamas and Israel that starts now. How much credit do you think goes to Trump's New Middle East envoy, Steve Witkoff, who I believe has been involved in the most recent round of negotiations?
I know Trump, today, in his acceptance speech, referred to himself as a peacemaker and a unifier and is certainly taking some credit. But realistically, do they deserve some credit for getting this deal done? And do you think the deal has legs?
FRANK MCKENNA: They probably deserve some credit. I think you have to give some credit to Biden and his team. They've been dogged in trying to get a deal in the Middle East, and they've pushed the parties very, very hard. They've been very loyal to Israel throughout, both in terms of money and in terms of weaponry. But they've also pushed really hard to try to get ceasefires and to get a permanent deal.
Every deal needs deal tension, as you know. And I think the election of Trump and this negotiator being in there probably added to the deal tension. So it's a big enough victory that I think everybody can take a share of credit for that.
The bigger issue is whether it will have permanency or not. There is that potential, but it will require a broader coalition of interest. The Saudis, for example, need to become involved, and the Emirates, in trying to come up with a bigger deal, a deal that was almost on the table, or on the table several years ago, before October the 7th, which would involve respect for a Palestinian state, support for Israel in the Middle East, new trading relationships, et cetera, et cetera.
So to have a larger, more sustainable peace, there probably is going to have to be a heavy laying on of hands from other countries in the Middle East, and it will probably involve getting with the West Bank and the Palestinian state, et cetera, et cetera. Those issues haven't gone away.
PETER HAYNES: So let's switch over to China here. What on earth has happened to Trump and China? All of a sudden, Trump's tweeting about his great conversations with President Xi. He's reinstated TikTok, despite legislation and a Supreme Court ruling that says TikTok needs to go dark in the United States. And really, the tone of Trump's position towards China has done a complete 180 from his first term.
How much of this tack change do you attribute to Elon Musk? And do you think this new perspective we see will be short-lived?
FRANK MCKENNA: I don't attribute it to Elon Musk. I know that he's got a very active operation in China. I attribute it to Trump. And I give Trump full marks on this. He is a problem solver. And when he sees a problem, he doesn't let it fester and doesn't nibble around the edges. He confronts it head on.
I do like that about him a lot. And I think that if he can end up reaching a rapprochement with China, that would be spectacular for the world. That rising tide would truly lift all boats, take a lot of tension out of the air, and it would be remarkable.
I mean, right now, not only is China, if anything, increasing its manufacturing dominance in the world, but it's also supplying a lot of support to Russia in terms of being a major purchaser of goods produced by Russia. And if we could ever get China back in the good graces of the United States, a respectful trading relationship, working together to solve world problems all the way from climate issues to other issues, that would be a-- that would be a hugely great thing. That would probably be the best single legacy that Trump could ever have from his time in office, if he could pull that off. So full marks to him for trying.
PETER HAYNES: And on that same note, we've seen a major shift in tone towards Trump from the business leaders across the United States. First, you have tech leaders, one by one, visiting Mar-a-Lago to curry favor with Trump. Obviously, we saw all those tech leaders at the inauguration here today. And this led President Biden to muse about a United States oligarchy, starting to look a bit like Russia.
Meanwhile, simultaneously, most of the large banks in North America have exited the Net Zero Alliance, and that will all but cripple that initiative. What do you make of Biden's parting shot at tech leaders and Musk about this so-called "oligarchy" that's forming in the United States?
FRANK MCKENNA: I'm not a fan of a particular economic class totally running a country. All of the billionaires that are involved in Trump's orbit have their own self-interest, and they're not always consistent with the national self-interest. I would be worried about that.
I think that we have reason to be worried about some of the market dominance now, with individuals $300, $400 billion in wealth and the market dominance of some of the players. We've had breakups of conglomerates in the past that have resulted in nothing but positive news for the economy. It's not a terrible thing to question, from time to time, market dominance or the influence of certain classes of people.
PETER HAYNES: Yeah. We'll just have to see whether or not that's going to be something that Trump's going to decide to attack, or is he going to leave them alone, given that they've been spending a lot of money for him on his campaign and in the super PACs?
Interestingly enough, even President Zelenskyy is treating Trump like a dealmaker, suggesting that in return for support to negotiate an end to the war with Russia, that Ukraine will give the US access to Ukraine's stock of rare minerals. Meanwhile, Trump seems to be backtracking a bit on his promise that he could end the war in a day. Tell our listeners how you predict the war in Ukraine will evolve once Trump is in power.
FRANK MCKENNA: Well, I think there'll be some form of freezing of the conflict. He probably will put deal pressure on. That's what business leaders like to do is to put-- create deal tension so you get to a final result.
And by the way, even though I give Biden full credit for supporting Ukraine and prosecuting the war, from time to time, I would-- I think it's been a day late and a pound light. Took a long time to get tanks over there. Took a long time to get long-range missiles to the Ukrainians.
The United States, just in the last several days, have put sanctions on the shadow fleet carrying Russian oil. That's brought that oil tread to a halt. Well, why couldn't that have been done several years ago? Some of the bank sanctions have been ramped up. Why couldn't that have been done a long time ago?
So I think that Trump may pull the governors from here and go full throttle on upping the deal tension. And it would be a good thing if he can end up getting a result. I think that's why Ukraine is in Kursk. They've seized Russian land. That's a trading card.
I hope that Ukraine does not suffer any significant loss of territory, in terms of a settlement. They've paid such a price in human lives. And Russia, of course, has paid a horrendous-- they're losing as many as 1,000 to 2,000 people a day in that conflict. Both sides have lost a lot, and they should get this thing settled. But Ukraine is not the aggressor here, and I hope they're not being forced to give up land that they've spilled blood to protect.
PETER HAYNES: Yeah, I know. Everyone's going to want to say they won this war. But at the end of the day, it's really hard to understand what-- we all understand why the conflict exists. But at the end of the day, we'll look back and wonder why it ever had to happen.
Frank, here's my last question for you on the predictions front. Can you give us one other hotspot in the world that will become on the radar in 2025?
FRANK MCKENNA: Yeah, I'm going to give you two. One is Iran. I still worry about it because they've got a religious leadership, which is not attuned, I think, to the best interest of the public of Iran. And I'm afraid if they become-- feel too cornered, they're going to make a race to try to build nuclear capabilities.
If that happens, Israel will have to act. And if Israel acts, the United States will have to act. And we'll have a pretty significant conflict taking place.
So that's one that is still in the worrisome category. And then closer to home, regretfully, I would say Quebec. We have a separatist party running in the province of Quebec that's now leading in the polls. And it's their intention to call a referendum in Quebec. And if that happens, it's going to be a very sad day for Canada.
PETER HAYNES: But, Frank, the support for the referendum compared to 1995, when we last had a referendum in Quebec, I think has gone straight down. Is it returning? Maybe I haven't been watching closely on that.
FRANK MCKENNA: Not necessarily. But if you get one political party who wins on wanting to have a referendum, then you have a referendum. As we saw with Brexit, bad things can happen when you have a referendum.
The other thing that's changed is the political will in the rest of the country to fight has changed dramatically. I'm afraid too many Canadians will probably say, if they really want to leave that badly, let them go.
So the whole thing is worrisome. It's worrisome to even have it. The loss of confidence that would take place in Quebec and the business community and in the rest of Canada, if we get into a fight like that, would be very, very unfortunate.
We have a great country, Peter. And whether I'm talking to people in the West, or in Quebec, or elsewhere, we should never, ever, ever, ever threaten to do anything that would rip apart a country that's just this magnificent. So I hope we won't come to that.
PETER HAYNES: I echo your sentiments and hope that that never comes to pass. Well, Frank, you talked about deal tension. And when we think about baseball-- and we'll end on a little bit more of a note that's non-business oriented, as we always do-- you think of deal tension, and you think about how agents are leaking that other teams are interested in players.
And we kept hearing that about Anthony Santander. And thankfully, finally, the Blue Jays signed him today, which at least gives us one win in this offseason, as we've been runner-up in just about every other free agent that's been available.
And I would argue, up until this announcement, that this was just an absolute all-time low offseason. And you think about things like the taking on a player from Cleveland for money in order to try and win this Japanese player, Sasaki, and then not even getting him. Many will argue it was a fireable offense by management.
Regardless, it's been a tough offseason, Frank, in particular, the inability to sign Vlady Jr. to a long-term deal. Seems like it might be the death knell. Do you think there's any hope for the upcoming season?
FRANK MCKENNA: There's always hope. Every season brings hope. But I think management have really, really screwed the pooch on this stuff. We ended up getting-- after all of the drama and everything, we ended up getting two speedsters on a team that doesn't seem to value speed, who can't hit, and gave up quite a lot in each case.
Santander is a big win. He's been a Blue Jays killer, so I'd like to see him on our side. But we've got to sign Vlady or Bo or both. And what you're seeing in baseball now, I deplore the lack of equity in markets and the huge amount of money being paid out. But what's clear as well is that, if a player has a choice between two teams and one has got a winning squad and the other doesn't, they're going to go with the winner. And the Blue Jays just haven't made themselves look like a winner.
A few years ago, when we had Teoscar and Gurriel and Moreno coming along, and so on, we looked like winners. And I think people wanted to join that team because they thought it had a future. But if you lose people like Vlady and Bo Bichette, it's hard for players to get their head around coming to a team like that.
So we got to smarten up and smarten up fast. This is a big market team, with huge fan support. And I don't think we're getting the team we deserve.
PETER HAYNES: And, Frank, I was talking to a friend of mine in Pittsburgh, actually, who's a Pirates fan. And he was talking about Spencer Horwitz. And I said, I'll be honest with you, he might have been our second-best hitter. But I can tell you, not one person buys a ticket to watch Spencer Horwitz. They buy a ticket to watch Vlady Guerrero--
FRANK MCKENNA: That's right.
PETER HAYNES: --or in the case of Pittsburgh, Paul Skenes. Hopefully Santander helps us a little bit here and provides some protection in that lineup for Vlady and Bo. But we need to do more. And all of those names you mentioned, Frank, were the previous regime, when Alex Anthopolous ran the team. And hopefully we can get up off the lows right now. But the American League East is going to be pretty tough.
So look, we've covered a lot of ground here today, Frank. And I appreciate your passion certainly for this country and all the work you've been doing on behalf of Canadians and Americans to help in Los Angeles. So thank you for that. And we'll talk again next month.
FRANK MCKENNA: Thank you, Peter.
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