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.