The West Block – Episode 26, Season 12 – National | 24CA News
THE WEST BLOCK
Episode 26, Season 12
Sunday, March 19, 2023
Host: Mercedes Stephenson
Guests:
Kirsten Hillman, Canadian Ambassador to the United States
Kevin Page, Former Parliamentary Budget Officer and Institute of Fiscal Studies and Democracy
Lisa Raitt, Global Investment Banking, CIBC and Former Conservative Cabinet Minister
Location:
Ottawa, ON
Mercedes Stephenson: Just how robust is Canada’s relationship with the United States? This week, we’ll have a firsthand look.
I’m Mercedes Stephenson. Welcome to The West Block.
U.S. President Joe Biden heads to Ottawa for an official go to. What’s on the agenda for the White House and might the Prime Minister ship? A candid dialog with Canada’s ambassador to the United States.
And can the U.S. avert one other banking disaster? Should Canadians be involved?
U.S. President Joe Biden begins an official go to to Canada this week. The President and First Lady Jill Biden arrive in Ottawa on Thursday. On Friday, he’ll be the primary president since Barack Obama, to deal with Parliament.
The relationship between presidents and Canadian prime ministers is at all times a lot scrutinized, particularly it appears on this facet of the border how a lot face time you get with the U.S. chief truly issues.
President Biden and Prime Minister Trudeau have met many occasions earlier than however there’s an urgency to this assembly. With growing army calls for, tensions with China and Russia on the rise, and with our two economies so intently linked, there’s rather a lot at stake.
To discuss this go to and Canada’s priorities, I’m joined by Canadian ambassador to the United States, Kirsten Hillman. Thank you a lot for becoming a member of us as we speak, it’s so good to see you right here in Ottawa.
Kirsten Hillman, Canadian Ambassador to the United States: It’s nice to be right here, Mercedes, so thanks a lot for having me.
Mercedes Stephenson: Canada and the United States have the closest relationship for Canada’s perspective that issues and positively the Biden presidency has been extra predictable than the Trump presidency, but it surely additionally hasn’t at all times been nice for Canada, from deciding to not construct the Keystone XL pipeline however approving one from Alaska, to a few of the purchase American provisions that we’ve seen handed, to the stress for extra defence spending and it looks as if typically an unwillingness to behave on unlawful border crossings. What are the objectives and the technique for Canada heading into this assembly?
Kirsten Hillman, Canadian Ambassador to the United States: Thanks for that. You know, I feel that having been in Washington below the earlier administration and now in Washington below this administration, I must say that the connection—that is to your first level—is definitely very, very robust in a relationship of this magnitude, proper? Two billion {dollars} a day—over $2 billion a day in commerce, a 6 thousand kilometre border. It’s inevitable that we’re going to have issues which are difficult between us. But the huge, overwhelming majority of what we do collectively is deeply aligned, particularly between the Trudeau authorities and the Biden administration. They have a deep coverage alignment. So, I assume on the highest degree what this journey can be about and what I actually hope we come away with could be very clear discussions and concrete plans about find out how to make one another stronger. About how each of our international locations on this time, which you stated in your intro, very difficult. What we do collectively to make each of our home economies and societies stronger and safer, and safer and higher, however what we additionally do collectively on the worldwide stage.
Mercedes Stephenson: One of the massive issues for lots of parents is the Roxham Road crossing in Quebec, on this unlawful border crossing that folks have been strolling throughout. I regarded up the numbers simply earlier than we did this interview: 40 thousand folks got here from the U.S. into Canada throughout these irregular border crossings. The Canadian authorities is conscious that it is a downside, however they would wish the U.S. onboard to vary the Safe Third Country Agreement that regulates this. Is your sense from being in Washington that that’s one thing that President Biden can be open to?
Kirsten Hillman, Canadian Ambassador to the United States: So I feel the very first thing to say is that migration in our hemisphere is a large precedence for the Biden administration however for our hemisphere. I imply it’s—it’s a tragic scenario that’s occurring south of the American border. They had 2 million irregular migrants hit their southern border final 12 months. These are folks which are fleeing determined and really, very troublesome circumstances. So it’s clear that our leaders will discuss hemispheric migration. They will discuss in regards to the root causes of the migration. They will discuss these folks which are in peril and whose lives are in danger after which they’ll discuss in regards to the implications of that for our borders, for the U.S. southern border, and naturally, for the Canada-U.S. border and the Roxham Road scenario, in addition to different crossings the place folks come. So, it will likely be positively a part of the dialogue between the Prime Minister and the President.
Mercedes Stephenson: Speaking of our hemisphere, the U.S. has made it very clear they want Canada to guide a mission to attempt to assist stabilize Haiti. Our Chief of the Defence Staff General Wayne Eyre has stated that that might be very troublesome in an interview given the challenges that we face when it comes to staffing. But we’re listening to the Americans say out of the White House that Canada’s signalling curiosity on this. Is that correct? Are we signalling curiosity in main this Haiti mission, and as your understanding as ambassador that we have now capability to take action?
Kirsten Hillman, Canadian Ambassador to the United States: So we discuss with the Americans in regards to the scenario in Haiti, if not every single day, a number of occasions every week. And not simply the Americans, , our companions within the hemisphere and different worldwide organizations and actors which are deeply involved and mobilized to try to assist the folks of Haiti. And I feel that the vital factor to say right here is that there are a lot of totally different actions that we’re taking together with the U.S. and others. So we’re what are all of the issues that we will do. We’ve—Canada’s been very aggressive in imposing sanctions on these which are funding the gang exercise. We have introduced loads of humanitarian support. The U.S. is doing so now. And we discuss to the Haitians folks about what they suppose are the options which are going to work for them. And so at this level what we’re specializing in is, and that is due to what the Haitians are telling us, is that what they actually need is for his or her police companies to be correctly educated to cope with the safety scenario. That’s the place we’re focusing. That’s what we’re speaking to the U.S. about and different companions within the area who would assist us in that.
Mercedes Stephenson: So possibly the RCMP is a risk there?
Kirsten Hillman, Canadian Ambassador to the United States: It is perhaps. I——I’m Canada’s ambassador to the United States. I can’t converse to the
Mercedes Stephenson: You don’t get to… [Cross talk]
Kirsten Hillman, Canadian Ambassador to the United States: …RCMPs capability or goodness gracious actually not the army’s capability or different people who find themselves the specialists in that. But what I can say is that we’re very—we have now—we talked to the Americans on a regular basis about—like as I stated, a number of occasions every week about what is going on in Haiti. What we’re seeing on the bottom. What we’re listening to from the folks on the bottom. What they suppose is working. Where they suppose they want further assist in order that we take the steps that make a distinction in that nation and that we don’t attempt to, , impose on them one thing that they’re saying this isn’t one thing that’s going to be manageable for us to—to cope with.
Mercedes Stephenson: There’s a priority about how the U.S. perceives Canada relating to defence spending and the Armed Forces, and we’ve heard it from, as we’ve simply stated, our personal prime common. But there are some very severe points and issues there. We noticed the Chinese spy balloons. We’ve heard issues in regards to the Arctic. We’re listening to issues about our skill to deploy and lead missions all over the world. When I talked to loads of American sources, they inform me they’re not very pleased with Canada’s defence spending. Are you involved about that? And how a lot stress do you get from the American facet about how a lot cash we’re placing into defence and safety?
Kirsten Hillman, Canadian Ambassador to the United States: So I might say that I’ve a unique impression than possibly what you’re listening to. I—as I say—I’ve been in D.C. because the final administration and into this one, and there’s no doubt that the U.S. will at all times be seeking to Canada and different allies to do as a lot as they will. And that they’re, , eager to ensure that we contribute in a method that’s as efficient as potential. But I do—I’ve observed that as we have now made our bulletins with respect to the investments in NORAD modernization, the acquisition of the F-35s. The incontrovertible fact that we are actually below a, , beginning—or in the midst of one other defence coverage assessment and looking for their, , looking for to seek the advice of with them and discuss to them about that assessment. I—it’s modified the tone from the place I sit in Washington to a fairly vital diploma. I feel Minister Anand has an excellent relationship with Secretary Austin, a really open relationship. So I discover that there’s a actual sense of collaboration. Do they need us to do extra? Always. Always. But not simply us, proper? But in addition they actually respect that we’re going to make the alternatives that make sense for us. I feel that the Arctic is a extremely vital contribution that we will make to the continental defence, , that different companions are much less in a position to make. So I feel focusing in on that as we’re doing makes loads of sense and is deeply appreciated by the Americans.
Mercedes Stephenson: Right, and principally ours and clearly loads of concern about who’s up there after we noticed the balloons and tales [00:08:47]. We simply have time for one final query, however I need to discuss in regards to the financial system to you since you talked about $2 billion commerce. I imply it is a enormous, enormous connection for Canada and the Biden administration, whereas they’re very pleasant and public with Canada and in non-public, they’re making selections which are finest for the U.S. and a few of that has included issues just like the Inflation Reduction Act and incentives on electrical autos an all types of inexperienced know-how that basically deprioritizes Canadian firms and so they’re saying we simply can’t compete. At the identical time, we see the Prime Minister out doing excursions of electrical battery services saying we’re going to grow to be a worldwide chief. Is your sense that there are inroads that may be made to reassure Canadian companies of their entry or to get some type of an exemption from the America solely stuff for Canada?
Kirsten Hillman, Canadian Ambassador to the United States: Right. So the Inflation Reduction Act is a large spending invoice designed to incentivize, as you say, electrification, electrical autos, battery manufacturing. They even have a invoice on important mineral exploitation that can incentivize that. And lots of these options of these items of laws truly acknowledged the Canada-U.S. partnership. So, in relationship to the IRA, the Inflation Reduction Act, the North American auto ecosystem is particularly carved into that invoice, so Canadian batteries which are produced in Canada are eligible for the incentives below that invoice. Canadian important minerals, batteries produced with Canadian important minerals are eligible for the tax incentives below that invoice. Vehicles which are manufactured in Canada are eligible for American tax credit below that invoice. So that could be a large aggressive benefit for us, frankly. And I feel it’s a recognition of form of the Canada-U.S.-Mexico auto ecosystem that’s been so efficient for our three international locations because it initiatives itself into the longer term, proper, with the electrification of autos. And it’s going to be a North American electrification precedence. There are different areas the place they’re additionally looking for to draw funding, however as are we and we have now been for a very long time. We’ve been truly working on this area of incentivizing these transitions in Canada by way of totally different authorities insurance policies for six or seven years. So at some—in some degree, the U.S. is simply getting into this area. We will compete. We will compete properly. I see it within the U.S., our price proposition is robust. People, assets, expertise, insurance policies, coverage stability, all of this stuff actually matter and a few of these bulletins, , the Volkswagen announcement would present. So is there competitors? Yes, but it surely’s type of competitors, I feel, that’s going to make us each higher. It’s going to incentivize possibly as a lot manufacturing as quick as potential, as a result of for all these applied sciences, demand goes to outstrip provide for a very long time to return. So, I feel one in all our massive messages to the Americans subsequent week goes to be that is good, however let’s be certain that we’re doing it in a method that strikes us each ahead as a lot as potential, as quick as potential and is in an effort of form of a zero sum recreation the place we try to outcompete one another.
Mercedes Stephenson: Ambassador Hillman, thanks a lot for being right here and naturally, we’ll see you in only a few days at your first go to.
Kirsten Hillman, Canadian Ambassador to the United States: We’ll see you in just a few days. Thanks.
Mercedes Stephenson: Thanks a lot.
Up subsequent, are we headed for one more monetary disaster after a turbulent week in world banking?
[Break]
Mercedes Stephenson: You’re not alone for those who’ve had flashbacks to the 2008 monetary disaster final week, after it regarded just like the collapse of Silicon Valley Bank was spreading, till Washington stepped in.
Janet Yellen, U.S. Treasury Secretary: “I wanted to make sure that the problems at Silicon Valley Bank and Signature Bank didn’t undermine confidence in the soundness of banks around the country.”
Mercedes Stephenson: The banking turmoil solely provides to the financial uncertainty brought on by inflation, rising meals and gasoline costs, and excessive charges of curiosity. It’s in opposition to this backdrop that Finance Minister Chrystia Freeland is ready to introduce her federal funds on March 28th.
Here now to debate that is Kevin Page, former parliamentary funds officer and head of the Institute for Fiscal Studies and Democracy; and Lisa Raitt, former Conservative cupboard minister and vice-chair of Global Investment Banking at CIBC.
I’ve had so many questions on this that I’m curious to place to each of you. Canadians had been actually involved. People keep in mind when massive American monetary establishments went down earlier than. They’re curious. Could this unfold to Canadian banks? Let’s begin with you, Kevin.
Kevin Page, Former Parliamentary Budget Officer and Institute of Fiscal Studies and Democracy: Yes, I feel it’s proper for folks to be involved. I feel it’s—some folks—some particular person described it as a gradual shifting disaster and so we positively—it’s not only one financial institution, it’s greater than. It’s just a few banks within the United States. It’s a comparatively giant financial institution in Europe. So I feel when, , as folks that use banks that put their cash there, they make investments by way of banks, it’s nervous. Like there’s no science proper now that there’s any actual monetary stress that—within the Canadian banking system, however I feel it is a world situation and a method or one other, I feel we are going to, , we’ll really feel it.
Mercedes Stephenson: Lisa, what’s your sense of the broader financial scenario we’re in as a result of I do know that Canadian banks are regulated otherwise than American banks, however clearly, what occurs within the United States nonetheless has an impact right here and there’s loads of monetary stressors for folks proper now.
Lisa Raitt, Global Investment Banking, CIBC and Former Conservative Cabinet Minister: Yeah, for positive Canadian banks have a unique regulatory regime. But extra importantly, the massive banks are actually numerous of their holdings. So the type of factor that occurred at Silicon Valley Bank was that you just had a really robust focus of a sure sort of funding or investor within the financial institution. So when there have been difficulties within the tech sector, for instance, that was felt, clearly, very a lot.
In the case of Canadian banks, there’s nice diversification when it comes to investments and when it comes to what deposits are. So I might say that the Canadian financial institution holder could be very assured and it may be very calm when it comes to how our banks are going to go. But I’ll let you know that one factor that shocked me essentially the most about what went down with respect to Silicon Valley Bank, is how fast it occurred. I imply folks had been emailing one another. There had been tweets that had been flying throughout. People had been on TikTookay, speaking about what was occurring and that actually brought on a run on the financial institution. And social media as a way to speak in a really fast method, positively had an impression right here, whereas, , up to now a financial institution run might presumably take numerous hours, couple of days, possibly some weeks. In this case, it was virtually instantaneous. That is one thing that we have now to observe when it comes to regulation and when it comes to what occurs in our banking sector.
Mercedes Stephenson: That’s a extremely attention-grabbing level, Lisa and it appears like every little thing has simply been on hyper cycle, virtually these days for news, for the financial system, for every little thing. And loads of of us are actually feeling that stress, Kevin. You know, you’ve acquired growing meals costs, growing gasoline costs. Loads of of us, who’re on a variable mortgage as an alternative of a set mortgage, might be paying tons of extra a month that they simply don’t have the cash for. Do you suppose there’s a risk that we’re heading in direction of important mortgage defaults or a recession in Canada?
Kevin Page, Former Parliamentary Budget Officer and Institute of Fiscal Studies and Democracy: Yeah. I feel we’re headed for a major financial slowdown. I feel it stays to be seen whether or not it will likely be a smooth touchdown, one thing that, , that appears development is comparatively flat. Some upward tick within the unemployment price or one thing that’s a tough touchdown that we skilled in, say, 2008-09. So, I feel that’s an open query and I feel there’s no information proper now for those who had been take a look at both credit score or mortgage, , credit score delinquencies or mortgages in arrears. That information appears to be like effective proper now. The labour market appears to be like robust, however I feel there’s only a sense that we’re getting near this precipice, the place one thing’s going to interrupt.
Mercedes Stephenson: Yeah, I feel that’s that sensitivity, particularly after COVID, of like when is the subsequent factor going to occur? Where is the subsequent cliff? Lisa, the federal government is clearly going to attempt to discover methods to make this higher. That’s what governments do. I do know you’re Conservative. They’re Liberal. Different views on how to try this. But you’ve been within the funds planning course of, when it comes to conferences— what occurs in cupboard. What will the federal government be as they think about what must be on this funds?
Lisa Raitt, Global Investment Banking, CIBC and Former Conservative Cabinet Minister: Well, in the beginning, any authorities a funds can be contemplating it within the larger context of when is the subsequent election? And what do they should do to make sure that they nonetheless have the assist of the voters? And I do know it appears crass, Mercedes, however it’s a related calculation that occurs throughout funds time. Is this one thing that our base will like? Is this one thing that Canadians will like? There’s no query Canadians are hurting. They’re very involved about what’s occurring in the price of on a regular basis issues, and positively they’re involved about their mortgages. So there could also be some aid, however I don’t know what the federal government goes to do. The problem with sending extra cheques out and growing the amount of cash in folks’s pockets, in fact, is that they’re in a position to spend extra. They’re in a position to purchase extra. And that really does add to the potential of inflation sticking round for some time.
In the United States, regardless of what’s occurring, the massive debate is going on whether or not or not they’re going to extend rates of interest once more as a result of their inflation is just too excessive and so they suppose excessive inflation in the long run is a foul factor. Equally, the federal government placing more cash into the system, might be seen as a unfavourable factor with respect to inflation and it’s not going to unravel the long run situation that we have now with respect to the financial system being nonetheless highly regarded.
Mercedes Stephenson: Kevin, you, for a few years, gave us the true price of issues. That’s why we have now the parliamentary funds officer versus what governments inform us they’re going to price. What are your issues in regards to the funds arising and what would you wish to see the federal government do or what recommendation would you give them?
Kevin Page, Former Parliamentary Budget Officer and Institute of Fiscal Studies and Democracy: Yeah, I feel—I imply nice recommendation from Lisa that like inflation stays the primary form of macro-economic situation. It’s—it creates loads of instability like general and I feel—so I feel it’s vital that the funds—like our fiscal coverage be per financial coverage that they work—they’re coherent. They’re working collectively to cut back the speed of inflation, setting a decrease inflation expectations. Like I feel—like, , along with that, I feel that mainly means the federal government’s acquired to carry its deficit observe, which is mainly a downward trajectory within the dimension of those deficits. And if they may do this, that—I feel that might be coherent coverage. But I feel we all know that there— we’re going to see numbers on the well being care deal. There’s some pressures on numerous fronts to assist susceptible folks, possibly, , an extension to the GST credit score. I feel, , the NDP are fairly new democratic events placing stress on them to do extra stuff on dental are. Yeah, and I feel there’s a way that, , after the U.S. Anti-Inflation Protection Act the place they’re, , you may see the U.S. is making a big transfer to attempt to increase their competitiveness of the inexperienced business, like we’re going to must maintain tempo on loads of fronts. I feel the important thing, although, is to try this in a method that doesn’t add loads of the inflationary stress that Lisa talked to. So if it’s capital associated, that’s effective. But if it’s like loads of, cash that’s going to enter the system by way of transfers that’ll be consumed, that might maintain inflationary pressures up. So, yeah, it’s an advanced funds atmosphere.
Mercedes Stephenson: How lifelike do you suppose it’s that we’ll see a balanced funds arising? Because that was one of many issues we heard them discuss for the primary time within the fall, however now we do have all these unknowns, together with Russia, Ukraine, the struggle, altering world atmosphere. Is {that a} ship that has form of sailed on the prospect of a balanced funds being a spotlight right here?
Kevin Page, Former Parliamentary Budget Officer and Institute of Fiscal Studies and Democracy: No, I feel when it comes to like a fiscal planning framework to have a medium to work together that does get us again to stability. Again, if you concentrate on it, , the financial system, at the very least, , is rising. It’s most likely working near trim. There’s loads of what folks name extra demand pressures. The labour market appears to be comparatively tight. Unemployment price’s sitting at 5 per cent. So I feel, actually, on this atmosphere, , if we get a smooth touchdown, I feel attaining a balanced funds over the subsequent three, 4 years is doable. But will this authorities—have they got, , type of the political urge for food going into an election in a few years? Again, Lisa talked about that. I feel they’ll need to spend. And so—however I feel attending to medium time period stability is unquestionably achievable.
Mercedes Stephenson: Lisa, we simply have just a few moments, however last phrases to you.
Lisa Raitt, Global Investment Banking, CIBC and Former Conservative Cabinet Minister: I’m going to say that I feel it’s vital to cope with what is going on within the now, but it surely’s equally vital to consider what the longer term appears to be like like. Kevin brings up the Inflation Reduction Act, which is an anti-competitive act for positive, vis-à-vis Canada and the United States. And the federal government goes to must take a extremely good take a look at issues that we will do in Canada which are wanted on the world stage that ought to have assist and funding, and together with giving encouragement to the business sector to speculate. And that’s the best way to maintain the financial system entering into the best route over not simply the short-term, however the medium to lengthy. And I’m wanting ahead to seeing a few of these, I hope, within the funds arising in a pair weeks.
Mercedes Stephenson: Great. We’ll be preserving an in depth eye on it. Thank you each for sharing your time and experience with us.
Kevin Page, Former Parliamentary Budget Officer and Institute of Fiscal Studies and Democracy: Thank you.
Mercedes Stephenson: Up subsequent, taking inventory of the controversy over Prime Minister Justin Trudeau’s alternative for particular rapporteur on international interference.
[Break]
Mercedes Stephenson: Now for one final thing. Prime Minister Justin Trudeau appointed former Governor General David Johnston as particular rapporteur, to research international interference. The situation has been a political firestorm for the federal government. Johnston was appointed GG by Stephen Harper, however he’s additionally an in depth good friend of the Trudeau household, which has led critics to query whether or not he’s the best particular person for the job.
Last week, the Prime Minister criticized the Opposition for elevating these questions.
Justin Trudeau: “Ramping up the toxicity and partisanship to the point where it doesn’t matter what the substance is, it just matters what side you’re on.”
Mercedes Stephenson: Perhaps the controversy ought to be much less about who’s main the assessment and extra about what the precise mandate can be. Will or not it’s to research what Mr. Trudeau and his authorities knew? Will or not it’s restricted to solely China? What about solely federal elections? And then in fact, there’s the important thing choice Mr. Johnston has to make about whether or not to advocate a public inquiry.
We’ll be preserving an in depth eye on all of it. But that’s our present for as we speak. I’ll see you again right here subsequent Sunday. Thanks for hanging out with us.
