CTV QP Podcast #527: Erin O’Toole joins U.S. trade committee

Welcome to Question Period on this Sunday, April 26th, I'm Vashika Pelos.

Today, generational struggle.

The reality is that he's just another labor.

He's doubled Justin Trudeau's deficit.

What if he served as really stand for if being liberal is about helping Canadians?

While the federal government talks about Canada being the second fastest growing economy in the G7,

Canadian youth continue to face a challenging labor market to say the least.

The unemployment rate among 15 to 24-year-olds is more than double the national average.

Will the feds take action in this week's Spring Economic Update?

I'll ask Jobs Minister Patti Hadu plus a special edition of the Scrum will tell us what they're expecting in the update.

Then, Canada Unbothered.

Canada will not put US spirits on the shelf. It is insulting.

We're not sitting here taking notes and taking instruction from the United States.

Suddenly, the federal government has a lot to say about the Canada US trade issues.

The Trump administration claims Canada has the worst strategy when it comes to trade.

Prime Minister Mark Carney increasingly defiant this week.

He says his government stands ready to engage in detailed talks or it's ready to wait.

Just how challenging will those talks be?

Former conservative leader and newly minted member of the Prime Minister's Canada U.S. Advisory Committee, Erin O'Toole is here.

And, of course, the Sunday strategy session stands ready to unpack the week that was in the Canada U.S. War of Words.

We begin with the alarming news out of Washington, D.C., late last night.

Gunman charged past a security checkpoint at the White House Correspondence Dinner, a tenant for the first time in years by U.S. President Donald Trump.

What ensued can only be described as pandemonium.

The suspect exchanged gunfire with authorities inside the Washington Hilton, where the dinner was being held,

he didn't make it inside the ballroom, a ballroom that not only included the president, but also several senior members of his cabinet and his vice president, JD Vance.

Secret Service, a sport of the president and the vice president to safety after the shots were fired.

The suspect was subdued quickly and then President Trump called the press conference at the White House.

Well, thank you very much. And that was very unexpected, but incredibly acted upon by Secret Service and law enforcement.

And this was an event dedicated to freedom of speech that was supposed to bring together members of both parties with members of the press.

And in a certain way it did, because the fact that they just unified, I saw a room that was just totally unified, it was in one way very beautiful.

This is not the first time in the past couple of years that our Republicans been attacked by a would-be assassin who sought to kill.

And Butler, Pennsylvania, less than two years ago, you know, all know that story. And in Palm Beach, Florida, a few months after that, we came close.

We really had, again, we had some great work done by law enforcement.

But in light of this evening's events, I asked that all Americans recommit with their hearts and resolving our difference peacefully.

We have to resolve our differences.

The shooter has been identified in U.S. media reports as 31-year-old Cole Thomas Allen of Torrance, California.

He was carrying knives, a shotgun, and a handgun according to authorities and was believed to be staying as a guest in the same hotel where he carried out that attack.

Authorities spent the morning searching a home connected with the suspect in California who does remain in custody.

U.S. Acting Attorney General Todd Blanche spoke with Rita Press today with this update.

It's been about 12 hours or so since the incident happened.

And what we believe happened, at least as of now, is that the suspect traveled by train from Los Angeles to Chicago,

and then Chicago to Washington, D.C., where he checked into the hotel where the correspondence center was at in the last day or two.

We believe that he was targeting administration officials in this attack, attempted attack.

But that's again quite preliminary as long enforcement continues to go through all the evidence.

The Attorney General says preliminary findings suggest that Trump and members of his administration as you heard there were likely the target of the shooter and contends the shooter is not cooperating with investigators.

Acting Attorney General says investigators think the suspect traveled by train from Los Angeles to Chicago, and then Chicago to D.C., again by train, before checking into the Hilton hotel where the dinner was held.

For his part, Trump insists the gala will be rescheduled within 30 days.

Prime Minister Mark Carney posted his reaction to the events on social media, writing,

I am relieved that the President, the First Lady, and all guests are safe following reports of gunfire at the White House correspondence dinner in Washington tonight.

Political violence, the Prime Minister writes, has no place in any democracy and my thoughts are with all those who have been shaken by this disturbing event.

We are, of course, going to continue to track any developments on this front.

I do also want to turn now to the new wave of criticism leveled at Canada by U.S. officials on the trade front.

Both U.S. T.R., Jameson Greer, and U.S. Commerce Secretary Howard Lutnik took aim at Canada this week, with the latter saying,

this country has, quote, the worst strategy he has ever heard, and quote, they suck.

On the domestic front, despite an entrenched trade war with the Americans, overall unemployment is holding steady, but the experience is different across generational lines.

Canadians, age 15 to 24, are unemployed at a rate more than double the national average.

In response, the liberal government is turning to its summer jobs program and creating new skills and training opportunities in an attempt to boost youth's employment.

But is it enough?

Patti Hidu is Minister of Jobs and Families.

Hi, Minister. Good to see you as always. Thanks for making the time.

Nice to see you too, Vashi.

I really want to start off on the issue of youth unemployment.

This series of announcements very recently actually geared at youth's employment more generally.

When do you anticipate, Minister, that those announcements will have a tangible impact on the incredibly high rates of unemployment among 15 to 24-year-olds?

Yeah, look, I mean, the federal government plays a very specific role in addressing youth unemployment.

On top of the $3 billion that we transfer to provinces and territories every year for labor market training, for support for young people, for support for workers who are looking to re-skilling, we actually also, as you know, support very specific programs that get paid work experiences for young people,

Canada's summer jobs, as you know, is now those 100,000 jobs are now posted on job bank for youth across the country.

And we work with, in some cases, organizations that are supporting really, really vulnerable youth that are in many cases living in disrupted circumstances.

One young woman, for example, that I spoke to recently, whose parent died in her senior year.

And these organizations, like the YMCA and many others, work to make sure that they can stabilize and support that used to receive

skills training and ultimately employment. So this is an ongoing investment and ongoing effort, I would say, at all levels of government.

And the jobs that I talked about, the paid work experiences I talk about, is actually one of the most evidence-based ways to attach young people, not just to the workforce, but to quality jobs and organizations that, in many cases, keep them.

Yeah, you talk, Minister, about evidence, and that's why I'm asking, sort of, about when it will all make a difference.

I understand the federal government's role. I understand that you've made some relatively new announcements to try and address the problem.

But it is a problem that has been growing in size since 2023. It became especially punctuated over the course of 2025.

You made announcements last summer, about 75,000 candidates, summer jobs, et cetera, et cetera.

Like when will this stuff start to bring that youth unemployment rate down?

Well, I think it's not just this stuff that is really specific to youth work placements, paid work experiences, which, as I said, is one of the best ways to attach young people to quality work in our workforce.

But it's also the investments that we are making across the country and infrastructure in major projects and apprenticeship training and supports.

And look, there are pockets of the country where we have a real deep need for a new talent, for emerging talent, and we have areas where we see really high unemployment rates.

And so this piece that we're talking about today, that's a very specific federal add-on to the provincial and territorial work, is about really getting at very specific circumstances.

Again, trying to help double down what provinces and territories do in the education space and the training space and make sure that there's a way I call it kind of matchmaking between the student and the workplace.

But I think when we're talking about future opportunities, one of the areas where we see such a shortage and such opportunity for young people to really accelerate their opportunities for earnings is in things like the skilled trades.

And so we're very focused on how we can track more people to the skilled trades and how we can make sure that people get through those apprenticeships and complete their certification.

And I wouldn't take away from all the things that you just laid out, but I would sort of respectfully ask whether or not your government fully comprehends the scope of this problem.

And I ask because I hear very frequently over the past number of weeks, the Prime Minister-toe, A, the level of affordability in this country.

But B, the way in which, in particular, particularly pardon me, underpinned by, he keeps talking about wages and the growth of wages outpacing inflation.

If you look closer at the data, it's very unequally spread.

So, year over year hourly wage growth in March was the highest among employees ages 55 and up. It went up by 5.2%.

It was lowest among young employees between the ages of 15 to 24%. Their wages only went up 1.8%.

We know, for example, the rate of inflation right now is at 2.4% and climbing, thanks to the price on gas.

How do Canadians reconcile a Prime Minister in your government, which says, hey, things are really good there.

When we know for a fact, especially among the youths, they are not.

Well, I think what the Prime Minister is saying is that, and it's just what I said earlier, there are sort of pockets of real challenging circumstances for people.

And that's why the boosts that we're giving today for families and young people to make sure that they can afford that price of inflation.

Things like the groceries and essentials benefits, the 50% top up that people are going to see in May or June, the 10 cents waving of excise tax on fuel, 4 cents on diesel.

These are all measures that the government is putting forward to address that cost of living that is unequally born, if you will, by different Canadians depending on their employment circumstance or their wealth circumstance.

And you're right. I mean, for young people, often at the beginning of their careers, the ones that are in lower wage jobs, in jobs that are maybe not as in demand.

Let's say there are pressures for those folks. And so those young people are exactly the recipients of the affordability measures we're putting into place to make sure that as inflation drives up the cost of certain essentials or groceries that there is a compensating benefit to cover that cost of inflation.

While also focusing on making sure that people have access to the skills training, the opportunity for keeping education affordable, making sure that there's a pathway into high paying jobs and supporting young people to get those quality work experiences so they can improve their earnings.

But when you characterize them, for example, as pockets of the population or pockets of the economy, do you think that that's how Canadians feel that just a few of us are struggling?

There is ample evidence that the economy and the economic benefits that the Prime Minister keeps touting are mostly benefiting the wealthy in this country.

The income inequality gap, for example, was at a record level last year, the statistic that I just presented to you.

And then in addition, you have in the first two months of this year, if you look at the 109,000 jobs that were shed, and there were some gains in March, some minimal gains, I will say.

But in the first two months, 109,000 jobs shed, 64,000 of them were among you. That's not just a pocket.

Look, I'm not implying that this isn't a serious. That's why we've taken so many measures to protect workers who are disrupted.

In fact, the EI measures that are in place right now are exactly addressing the kinds of job losses that we're seeing.

In primarily tariff-infected sectors, but certainly all through supply chains.

Workers, as you know, need less weeks to qualify. They also can keep separation benefits or any kind of pay owing to them.

There are longer weeks available for long-tenured workers.

And we've topped up the labor markets agreements with provinces and territories so that impacted workers have very rapid access to support from trainers to ensure that there's opportunities for them to look at.

New jobs that may be available in the market and provinces and territories are the experts in doing that navigation.

So we're there as well with the support for provinces and territories financially to be there to help those workers adjust.

No one is saying this is an easy situation, but that's why the menu of supports are there in this time to help people with the boosts that they need, whether it's EI, whether it's training supports,

whether it's direct financial support through essential benefits credits or alleviation of excise taxes.

This is an all-hands-on-deck moment. And as we're building up the capacity for jobs in all kinds of different sectors, we are also making sure that we see focus on what Canadians need, especially those Canadians deeply impacted today.

Do you expect with the actions that you've taken, I'll sort of circle back to where I started, do you expect those actions to result in a markedly different youth's unemployment rate?

Do you expect the fact that youth unemployment is twice what the average is for other groups to actually change?

Well, certainly that's the work that we are pursuing with provinces and territories to make sure that the suite of measures that we have in place, both the urgent support measures,

but also the right blend of training measures, affordable affordability around education.

I might mention that we just extended the 40% increase for Canada student loans and grants to make sure that people can continue to afford post-secondary education at the college or university level.

These are all measures that we've put into place to make sure that students can continue to improve their skills and continue to get those paid work experiences that do result in better earnings, but also better labor market attachment overall.

You mentioned the tariff lead in sectors, just one final question for you minister before I let you go, the economic update is coming up this week.

There's been some changes in particular to the way section 232 tariffs are applied around the content of metal, basically, in products that's having a huge impact on some industries in Canada, like doubling, tripling the amount of tariffs that they have to charge their customers, for example, in the United States.

Are there additional supports coming in the update?

Look, you know, the answer to this, I actually don't know what's exactly in the update.

Obviously, each department works on a suite of measures that they propose for the spring economic update, but I can tell you this, we are laser focused on supporting Canadian business and Canadian workers through this tough time.

As the situation evolves, we have also evolved with the tools available. We've adjusted tools based on feedback from industry and from workers.

And that's where I can't quite to continue to do because this is an all hands on deck moment for Canada.

And we're there for workers in the short term. We're there for business in the short term and in the long term.

I'll leave it there minister. Appreciate your time. It's always thank you so much.

Thank you, Rashi.

When we come back ramped up rhetoric, more on the rising tensions between Canada and the US as the deadline to launch a formal review of Kuzma fast approaches.

Former conservative leader and new member of the Prime Minister's Canada U.S. Advisory Council, Aaron O'Toole will be with me next.

I think we're kind of at the end of our rope and just asking for them to do this. I think about this way.

There are two countries that have retaliated economically against the United States in the past year. The People's Republic of China and Canada.

So that's kind of the company that they're running in. So my sense is there may have to be an enforcement action to deal with this issue on wine and spirits in Canada.

Canada has the advantage of U.S. MCA. They have the best tariff deal in the world. They just treat us unfairly at every margin they possibly can.

Look, you know what's an irritant? 50% tariff on steel. 50% tariff on aluminum. 25% tariff on automobiles. All the tariff on force products. Those are more than irritants. Those are violations of our trade deal.

Prime Minister Mark Carney pushing back this week as U.S. trade officials renewed the rhetoric against Canada. The deadline for Canada, the U.S. and Mexico to review their trilateral trade deal is fast approaching.

And American officials maintain a slate of irritants are still causing friction.

Cardi meanwhile unveiled this week a new 24-member Canada U.S. advisory committee ahead of that formal Cuznet review process.

Former conservative leader Aaron O'Toole is one of the people who's been tapped to join the committee and he's with us now.

Hi, Mr. O'Toole. Pleasure to see you. It's always thanks very much for making the time.

Good to see you, Bashy. Did you hesitate at all when the call came to join this committee?

Well, I asked for clarity on a couple of fronts and one of which was the ability to talk to Pierre Paulier and my political team on why I thought it was important to be part of a team Canada effort.

I wanted a bit of discussion of defense and security in addition to trade and after. And I was assured that both of those things were fine. So I was happy to jump aboard.

Who provided that clarity?

I was talking to Janice Shrett, our chief negotiator and of course she was clear to the pretty council as far back as Prime Minister Harper.

So I have a very good relationship with Janice. I have a great deal of respect for her.

And these were just concerned because I didn't want it. Bashy to be a symbolic.

Let's use Aaron O'Toole in a photo op and cause challenges in parliament.

I wanted this to be your bringing in a conservative voice with some experience to try and make sure that this is a best effort team Canada.

And I was reassured that this is a substantive serious exercise.

And I think I read also that you did in advance of the announcement being made public.

I actually call Mr. Paulier of himself to let him know what was that conversation like?

I did. You know, I stay in touch with with Pierre on issues from time to time.

And I wanted to talk to him about why I thought it was so important for me to play a role on this.

I think that my conservators like myself and Lisa Rate, I think are on it.

Bring a lot as people, not just as former conservative politicians.

He agreed, you know, he knows how important the relationship is.

So he thought it was great that I was doing that.

And my hope is to try and be able to talk to Canadians, including through popular shows like yours,

to sort of say, why are people like Ralph Goodell and Aaron O'Toole coming together?

Because this relationship with the US is so critical for our future.

So we want to get this right.

How would you characterize the moment we find ourselves in?

It is unprecedented because the US, which after World War II, set up the rules-based system we enjoy,

not just for trade with the World Trade Organization and rear trade over time,

but security alliances, whether it's NATO, whether it's NORAD here in North America with Canada.

In some ways, they're walking away from a system that they created.

They benefited from and countries like Canada helped them.

And we were part of this system.

And in our case, over 70% of our trade exports go to the US because of those lowered tariffs going back to Prime Minister Malrudi.

So it is a bit of an upheaval.

It is a bit of a rupture as Prime Minister Karni described it months ago.

And we have to not only adapt to this new reality,

but also try and negotiate to get back to a position of trust with the Americans,

both on trade and on security.

Do you think negotiating back to that position is possible?

And I'll ask you against sort of the backdrop of, there's a domestic,

a little bit of a domestic debate about whether the rupture is permanent or something that could be resolved.

And there's even, you know, internationally last week we spoke to the President of Finland

who said, don't throw the baby out with the bathwater versus some of the rhetoric that you hear,

let's say on this side of the border.

What is your view of how permanent what is happening is?

We all hope this isn't permanent.

Actually, because Canada has done very well.

Our prosperity has increased.

We've had security, you know, until really the Russian invasion of Crimea and then the full war in Ukraine a few years later.

The rules-based system provided a piece for almost dating years, you know,

away from the great wars of Europe of the previous century.

We've seen more people lifted out of poverty because of more liberalized trade around the world.

So walking away from that does concern all of us.

But in case that we're not able to secure a deal that is like the old system,

terror-free, for example, we have to diversify our relationships, be more self-reliant as a country.

And if President Trump's not going to eliminate terrorists, maybe get them lowered in some sectors

to make them more manageable for our manufacturers and for businesses here in Canada.

How much significance do you place on Kuzma itself?

If I remember right, and please do, Kremlin, if I'm wrong, I remember some of your criticism of the first round of negotiations.

And in particular, some of the things that were points of great interest for that government under Prime Minister Justin Trudeau around labor rules, for example.

The environment, things like that. Like, what is your primary message around Kuzma as a member of this advisory group to the Prime Minister?

Well, I said that to Janice when I was accepting this role that I was really disappointed that we weren't listened to the last time.

And Mr. Trudeau's team really created the progressive trade agenda to contrast themselves with the United States.

When actually the U.S. going back to Obama wanted to talk really about China.

They saw China displacing traditional systems, displacing their ability to get rare earth minerals, critical minerals to build ships to control steel.

So the U.S. wanted us to have an alignment, a fortress North America approach.

And the progressive agenda was just a misalignment of an opportunity to reach a deal.

It's why Mexico reached a deal first and then we were added.

We have to go into this trying to say, how can we align on that North America position?

And try and tell the Trump administration that tariffs on goods that Canadians provide in manufacturing are actually costs on Americans.

So I think we have to educate Americans alongside our negotiations.

What about the China factor, though?

Because I also remembered multiple interviews with you, particularly when you were foreign affairs critic, right?

Where you were a big advocate of a harder position to counter China and sort of counter China's dominance in a number of areas.

Like we have taken a very different posture through this last year toward China.

I know that you and our viewers will be familiar with that.

Do you think that will in any way hold us back in these negotiations with the United States or was it a mistake?

Look, the fact that in the final year of the Trudeau government that they finally aligned on tariffs on Chinese steel, aluminum, autos, EVs,

was a sign that they got it.

The US is not going to change their view on this geopolitical competition with China.

Canada, if we're serious and aligned, we can actually benefit.

I was in Nunavut earlier this week. We've got critical minerals, not just in the Arctic, but in all parts of the country.

The Ring of Fire here in Ontario.

We have the ability to be an energy security partner, a manufacturing security partner, and a physical security partner with the US in a very uncertain world.

So I think the Trudeau government was late to this realignment.

Mr. Carney, Mr. Carney is very famous now for his Davos speech talking about the rupture and the need to be more self-reliant.

So I think Canadians are ready for a more mature Canada, a more self-reliant.

And if we can't get a great deal with the Americans, we have to do more with Europe.

We have to do more with India and the Indo-Pacific.

So I think we still have to have some cautions on China and try and align, but we have to be, we have to diversify too.

Does that mean, for example, that you would be okay with the decision made to allow more Chinese EVs into Canada?

And I ask, of course, because the party which you were a leader before is not in favor of that.

I've been publicly critical of that part of the Prime Minister's trip.

I thought it was good that he went to China.

It's critical for our agricultural exports in Western Canada, and they needed to see that.

And I think Premier Mao and the Premier's in the West also helped restore some of those trade imbalances.

But the substitute for a great American partner is not China.

And in fact, the fact that Mr. Trudeau had been pursuing a free trade agreement at a time the U.S. was starting to tear off China, had this misalignment take place.

We have to be aligned because we are part of Fortress North America, and we need to benefit and be a true participant in it.

So we have to be very cautious with China, Vashy.

I was just in Taiwan a few months ago, semiconductor hub, a country that wants to do more and more with Canada.

And they're worried that we may just pivot completely to China.

So I think this is part of the reason they want me on the committee.

I'm going to push on a few issues.

I think I'm going to maybe disagree with some of their policies.

And I think that's what they want.

So I said to Pierre, and I'm saying to everyone, we need Canada to succeed.

And I think a diversity of voices and viewpoints will help position our negotiating team better.

I have just a few seconds left.

So I saved the political question for the last one.

I mentioned that you were, I don't know you've spoken a bit about this, but you were the leader of the party.

Obviously, there's a lot of focus right now on the new leader, not new anymore.

But on your replacement, Pierre Polyev, and whether or not he remains a leader.

He said after the buy elections that moved along with four crossers,

the liberal's two majority government that he will lead the party in the next general election.

Does he have your support to do so?

Yes, he does.

And that's part of the reason why taking this role in the committee part of my requirement was to be able to discuss with him why I was doing it and how I thought I could help.

He's got remarkable support within the party.

And as set the policy agenda, when I was leader, he was helping drive the questions on inflation and housing that years later, the government finally was moving on.

So I think the stability of a majority will actually, I think, be helpful for Pierre to build up, prepare.

And the role of the opposition is to hold the government to account.

I want them to hold them to account to drive to a deal on NAFTA.

So I think he's in a position to grow the party and to be ready for the next election whenever that comes.

I'll leave it there, Mr. O'Toole. Thanks for making the time. I appreciate it.

Thank you.

When we come back today more on this week's trade war of words, Canadian and US officials trade barbs.

It's a deadline to review their trade deal fast approaches.

Meanwhile, the Prime Minister has been unusually forthcoming about the state of negotiations.

Why the change?

Our Sunday strategy session with Kathleen Monk, James Moore, and Scott Reed is next.

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Open books amid ramped up gripes by US officials about their so-called trade irritants with Canada,

namely when it comes to the booze ban in several provinces.

Prime Minister Mark Cardi this week was more forthcoming about the state of negotiations and Canada's own red lines,

and the rhetoric coming from the Americans.

We work through a series of issues.

And we understand what some of the Americans would call trade irritants or trade issues are.

We have some on our side as well.

We're well prepared around those issues.

It's not a case of the United States to state the terms.

We have the negotiation.

We can come to a mutually successful outcome.

It will take some time.

So what does the Prime Minister's new communications signal strategically?

Our Sunday Strategy session is here.

Kathleen Monk is a former NDP strategist and director of communications to the late Jacqueline.

James Moore is a former conservative cabinet minister and Scott Reed is former communications director to Prime Minister Paul Martin.

Hi, everybody. Good to see you for a long time, Scott, on panels like this.

We've been talking about whether or not the government would start doing more to communicate on this file,

to bring stakeholders along the public along.

Why this week do you think there's been a change?

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Well, first of all, let's be crystal clear.

I think there is a real significant change.

It's not just that the Prime Minister got a little agitated in a press conference.

I think there is a significant shift in the Canadian psychology as it approaches these talks.

You can see that they are now prepared to set out red lines.

These are points that we won't fold on.

These are points that we're not going to compromise on or at least not on last.

I think it's going to be something in exchange.

And the notion, I think, that has pushed all of this is the Americans believe that they can try to push us into making concessions,

prior to even having conversations about trade.

And I also think the government probably is looking at polling.

That tells them Canadians uncertain they want a deal with Donald Trump.

At least right now, that Canadians wonder and worry whether any deal with Trump

might mean it is by definition a bad deal.

And perhaps that gives the government a little more latitude,

which means that it can be stiffer in its public pronouncements

because it will have to worry less about public retreats.

Whatever is happening here behind the scenes,

I think we've seen something shift in front of the camera.

And that tells me that we're going to be talking about this.

I think for the next six months, this is our new political life.

What does it tell you, James?

Yeah, all of that.

You know, we're coming up to the calendar anniversary moment of when he became prime minister.

So there's going to be a lot of reflections on what have you done.

And he needs to say something sort of significant on this file.

We're a few days before the spring economic update.

So he has to reference some action that he's taking relative to the economic context of the trade relationship.

Plus, there's a lot of noise coming out of the United States.

Many Howard Letnick at committee.

You know, the Trump administration on any random days popping off.

So the prime minister has to put some stuff in place in terms of how he's going to approach this tactically.

Plus, we have Ambassador Weissman in Washington, Janice Tourette,

the chief negotiator in place, everything is kind of in place.

And so now it's time to start talking about what the tactics are and what the strategy will be in terms of protecting key industries, ensuring that Canada will have the right footing,

the right voices are being bounced around within the Canadian government.

And in a sense that the prime minister is ready to start engaging in this in a serious and substantive way.

I think Canadians elected him largely because of his perceived strengths on this file and he needs to show action on it.

So context, the timing, the framework, all of it is in place.

And now it's time to start talking about this as Scott said for at least the next six months.

From a strategic perspective, Kathleen, is there also the necessity that they lay the groundwork for things not going well?

For sure, because one of the things that Carney has to be mindful of is that if Canada doesn't come out of the Kusme negotiations with a deal that is as good as it is now,

he's got to prepare Canadians to take that hit, right?

And that's what we saw him doing last weekend with his issuing of the video around Isaac Brock.

But also, you saw him come out a bit more forcefully this past week where he was actually saying, like, listen,

we have been suffering and we've already made concessions.

And now it's time for Americans to be more genuine in coming to the table.

Listen, we've all seen the comments this past week about, you know, the pay to play.

Basically that there's going to be some kind of entry fee for Canada potentially that was rumored to come in.

I mean, often the words that are coming out of Howard Lucknick's voice, whether it's at committee or elsewhere,

your mother would take a bar of soap to him, you know, in terms of how spicy he's being.

And you saw the prime minister for the first time really kind of hit back in his press conference.

And I think that can galvanize Canadians, you know, around the movement.

You also saw the chief negotiator, Janissarette, actually laying out what her mandate is,

which we didn't really hear clearly before that she actually...

There's nothing clear here.

Exactly. This week we got it all.

We got it all including the ambassador.

Yeah, very much so.

I got to leave it there.

We have a lot more coming up.

Thanks, guys, our Sunday strategy session.

A lot more coming up, I should say, on the spring economic statement, which will be

tabled Tuesday, our scrum with Amanda Lang.

The Judal Malise in JD Bell Vance is up next to talk about that.

Welcome back to Question Period.

The federal government is set to table its spring economic update Tuesday.

It'll be the first real opportunity for the federal government to publicly account for the measures laid out in the budget last fall.

But as war continues to rage in the Middle East sending fuel prices soaring,

the feds are facing increased pressure to help Canadians weather a growing affordability crisis.

And as you heard on this program a week ago, former Bank of Canada Governor Stephen Polos is predicting

Canada has about a 30% chance of entering our session.

The scrum is here to look ahead to that much anticipated spring economic update.

Amanda Lang is CTV's chief financial correspondent.

The Judal Malise is an economics reporter with Bloomberg and Joelle Dene Bell Vance is the Ottawa Bureau Chief at La Press.

Hi everybody.

Hello.

Nice to see you.

Amanda, I'll start with you.

We spoke a little bit in the introduction there about the war and its impact heard me on fuel prices.

What's the bigger fiscal reality that the federal government is dealing with now versus when the budget was tabled last year?

Well, it's interesting because we'll get a reminder of this week of how there are two sides to this coin.

And one is, of course, there's a cost of consumers and they'll outline a little bit more about the reduction in the gas tax that they've already promised.

But there's also, of course, the revenue side of it and they're benefiting from higher fuel prices costs for other energy prices that are benefiting oil companies and therefore taxation.

And so we did see this, this number of us slightly lower deficit that's expected.

We don't have the March number yet.

We don't know how it all shakes out, but it looks as though it's the benefit of higher energy taxation that's actually going to help Ottawa.

So there's actually a bit of wind in their sales on that front at least.

I think from a political perspective, New Jude, I imagine given the rhetoric surrounding the initial budget, which was like, this was all about fiscal responsibility and the opposition really pushed back on that because of the size of the deficit, this is something that they envision will help them make that or intend to land that political argument, whether they do is another question.

Yeah, absolutely. I mean, out of every single budget or fiscal update, the headline is always about what is the federal deficit.

And this time, if they manage to have a lower than expected deficit for the fiscal year that just passed or for the next one, that is definitely going to be something that the government will be able to turn around and say, look, we actually did better than what we said we would do.

And this comes at a very challenging time for the economy and it's because we are being responsible.

And then that makes it even more challenging for the opposition to make its case, particularly the conservatives about our Canadians getting a bang for their buck for the federal spending.

And so I do expect that to be a big political win for the government if they're able to show that deficit coming in smaller.

I'll note that the other thing that's benefited them is that the economy, generally speaking, is not doing great, but it's chugging along.

And as Mr. Pola said, we are not in a recession, small likelihood of recession 33%.

And that's also benefited the Cardi government and we'll give them an opportunity also to lay out in that update.

Look, this is the state of the economy, yes or some weakness, but look at all of these wins. We are diversifying trade.

You know, the economy is chugging along and look at the deficit.

I wonder how, and I'm very curious to what you think, JD, how they communicate, though, around reconciling all of that with the fact that Canadians are feeling broke when they fill up their card type of thing.

And you've seen a bit of that play out in the House of Commons where, on occasion over the past month or so, the Prime Minister has sort of exalted how great wages are compared to inflation.

Instead of affordability is being the best it is in a decade and you see the opposition go back hard against that.

Like, how cognizant do you think of the government as rather of those kind of almost contradictory messages?

It is very much a cognizant of that.

An example is the fact that the Prime Minister announced way before this cannot update a reduction or suspensions of the excess tax on gas.

So that showed that he knows that consumers need to feel that the government is with them feeling the pain right now and trying to reduce that pain.

But I think as a former banker of the Bank of Canada, Governor of the Bank of Canada, the former Governor of the Bank of England, he will be able to brag about this budget if the numbers are smaller as we expect.

And say that, look, I know how to run the economy and you've got the proof in the pudding.

And at this time, we're facing U.S. trade war and uncertainty related to the Ryan War.

I think this will probably be a good news for the liberal government to be able to brag about it for a little while.

So, expect Mr. Cardi to slap in a little slap in the back and say, I'm doing well with this economic update.

What is the story of the economy, Amanda, from where you sit, though?

Because I know, I think like relative to what expectations were a year ago, the government is able to say, hey, it's not as bad, right?

As an adjude pointed out, the risk of recession is not 80%, it's 30%, et cetera, et cetera.

But like I said, the reality is for a lot of Canadians that they are not, that is not their experience right now.

They do not feel like things are going great and they're worried in particular about losing their jobs.

Like paint the picture from your perspective of the Canadian economy right now.

Yeah, and I think that's, it's important because of course that most of us experienced the economy very personally.

How are we doing? How are our families doing? And the data, whether it's GDP or aggregate wage increases, are aggregate data and individuals experience it differently.

And it's super uneven.

Wealthy people are doing better than ever. The stock markets across North America are at record highs.

They are ignoring the underpinnings and profit, by the way, is also doing really well for big corporations, especially in the U.S.

Here, it's almost as though we're on hold. We're waiting to find out what happens with our biggest trade agreement.

We're waiting to see whether we do manage to eat out any growth.

So you see in economy, we just got retail sales data today that's just kind of muddling along and businesses probably aren't making big investment decisions.

And when I say that, I mean small and medium-sized businesses.

We might get big capital influxes because the government has opened the door for that.

The only other thing I want to say about you before we leave the deficit, let's not normalize a $50 billion deficit.

It may not be $78 billion. 50 is still way too high.

And by the way, I'm old school. Anything above zero is high.

So a balanced budget is the goal at the end of the day.

I'm very curious to see whether there is any projection out for that.

Yeah, but an adjude in this at all, whether that.

Because I think you're hitting on something which I think is very true.

Like the Prime Minister wants to be able to say he is a good fiscal manager, right?

And we know that the criticism, particularly from the conservative side of things, is you can't say that was a deficit as big as it is.

So I'm very curious to see the way that that's navigated.

I mean, I think the goalpost on deficits has been moved and it's not just in Canada, but globally we are quite...

We're used to seeing governments post deficits.

And especially during these economic times with the trade war, with geopolitical tensions, I'm not sure anybody is expecting to see a path towards a balanced budget.

I'm not sure how many people would go out and even argue for that.

You saw in the last federal election, you didn't even see a debate about reaching a balanced budget.

So I just think that I know that there's a generation that lived in a world where we talk about balanced budgets.

We're kind of pretty removed from that.

And so now the conversation now is really about magnitude, right?

And so if the government is able to show, well, we're heading in the right direction, even if it is not by much, that still will be a post.

They will post that as a win.

But the other piece related to the affordability element here is like, I'll have my eye out on whether the government actually does anything beyond the GST increase.

That's going to kick in on June.

The rebate.

Exactly.

And the excise tax cut.

Will there be anything else that the government will do to try to show that they are moving the needle and housing on affordability?

And the other piece will be, do they do anything?

They throw out a bone for business as they try to, you know, get these businesses to come in for a conference in September, Canada Inc.

The investment conference, the Prime Minister was hosting.

Does the government set out a plan of how it plans to provide even more incentive for that to happen?

What are you hearing, JD, about what they want this thing to do for them?

Well, first of all, the good economic managers. That's the key thing.

We've gone through a series of crises over the last decade.

The global world, the war in Ukraine, the trade war with the United States, now the war in Iran that has affected, you know, uncertainty, contributed to uncertainty.

And I want to say that they're steering the ship while the waters of the ocean are pretty much, you know, very agitated, if I may say.

But I'm told also that this, also the fact that the deficit will be lower, there will be a graphic that we should watch.

The exportation exports to outside the American market.

And that's going to be a new graphics that will be in an economic update to show that we're trying to diversify trade away from the United States, but also reduce our economic dependence on the United States.

It used to be our trade still is our biggest trade partner, but we want to diversify away from it.

Maybe I'll have a few seconds left, Amanda. I'll just throw a final reality check your way.

What have you seen around that diversification effort so far?

Well, we've seen agreements. We don't yet know whether that's turning into real deals. It takes time to even get the data on that.

What we, what we have seen are big ticket promises to invest here, right? We see European companies coming in.

We see our own pension funds like Omers promising to make investments. And that is important. And that could make the difference of whether we can actually weather this.

Okay, I'm going to leave it there. Thanks everybody. Appreciate the discussion.

Amanda Lang-Jedi-Belvanz and Najood Al-Malice are Sunday scram coming up next. The three things I'll be watching for next week.

Welcome back to Question Period. Here's a look at what I'm going to be watching for this week.

First and foremost, of course, any additional follow to what occurred last night at the White House press correspondence dinner during which shots were fired outside of a ballroom inside the ballroom set.

The president, the first lady, the vice president and numerous members of President Trump's cabinet.

Everyone is safe today. The cut, the suspect is in custody. The acting attorney general, however, says that based on the preliminary findings of authorities,

it is his contention that the president and members of his cabinet were, quote unquote, likely the target of the shooter.

That investigation continues today. It involves the search of a home in California. It also involves the search, of course, of the Washington,

Hilton, where this event took place. This is not the first time somebody has fired shots around the president.

As a result, there are a number of questions today about the security surrounding the president.

And those questions will continue to be examined throughout the day and into the coming days and weeks.

The Prime Minister also posting reaction late last night to that shooting saying, I'm relieved that the president, the first lady,

and all guests are safe following reports of gunfire at the White House correspondence dinner in Washington.

Prime Minister Kerni goes on to say political violence has no place in any democracy.

And my thoughts are with all those who have been shaken by this disturbing event.

There's a lot of domestic news this front on this front, I should say, as well coming up this week that we're going to be keeping an eye on namely the spring economic update

which comes Tuesday looking in particular at the size of the deficit as we've been talking about throughout the hour.

And then the next day the Bank of Canada will make its interest rate announcement very curious to see if rising inflation will factor into that at all.

I'm going to leave question period there. There's a whole lot more coverage of what happened last night coming up on CTV News Channel.

So do stay with us for that. I'll see you tomorrow on Power Play. Have a wonderful rest of your day.

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