Trade war, separatism, and Canada’s trillion-dollar bet

0:00You're listening to Alberta Edge, a podcast from the hub about the social, economic, and political forces pulling the country west. I'm Felice Chin, the hub's Alberta Bureau chief. Just when you think things can't get any worse, they do. How else to summarize the political shenanigans of the past week? It started with a breakdown in trade talks with the US, which has since escalated into a war of words, a war of tariffs, and even a war of apps. All that angst culminating in a liberal sweep of three federal bi-elections and a resurgence of elbows up ism. And depending on who you ask, all of this will either finally put the Alberta separatist question to bed or further solidify the argument for why Alberta needs to go its own way. So really, what better weeks to reconvene our regular political panel on Alberta Edge? Amber Ruddy is a conservative strategist and vice president with Council Public Affairs,

1:01and Keith McLaughlin is a former Alberta NDP staffer now with new West Public Affairs and shift media strategies. Amber, Keith, hello. Hello. Great to be back. Let's start with you, Keith. How would you describe the week that we've just had? I'm not sure what the adjective would be. It is quite something to see just the childish escalation in terms of renaming a great lake, the repeated premier to president comments to kiss my ass. It's definitely has been ratcheted up, and it's just kind of like, there does seem to be an adult in the room and that does seem to be Prime Minister Karni. He made comments this week of like, well, we'll get back to the table with the United States when they stop posting memes when they want to get serious and when they want to sort of grow up a bit. I think that's kind of where we're at. I think this also just kind of proves the Davos thesis again, like when Mark Karni was

2:03talking about a rupture last year, like this is that part of that night due dynamic. The relationship of the United States is going to be similar to this for quite some time, at least until the president is out of office. What's really important is how does Canada respond? It is not about talking about counter-apricander tariffs, I'm talking about how do we build our country and take the opportunity to do that. Yeah, we'll talk about all of that. But first, Amber, maybe set us up with how you see this hat trick of three bi-election wins. How is that related to what Keith just talked about? Obviously it was a good night for Mark Karni, but that's no surprise. These were not very competitive writings. I think the next round of bi-elections will be more interesting because there will actually be one that's a liberal conservative competitive seat, which is Brentford, where MP Larry Brock has announced his retirement. So, I think that will be the one to watch. This one, to me, was a bit sleepy because yes, you did have the liberal sweep the three

3:06bi-elections, notably in the Quebec bi-election. You did have a former dairy farmer representative, and that kind of plays into some of these trade negotiation woes. And I think overall Canadians do have the right to be disappointed and angry with the state of deteriorating trade negotiations. But anger is not a strategy. It's like you have to take the mantra if it feels good, don't do it. We have to be looking a few steps ahead because we have to play the long game. I think still have the hearts and minds of Americans, especially along those border states that our supply chains are so integrated that it's childish, of course. But like I think for Mark Karni, it's not whether he can just sound defiant, but it's showing that whether he can deliver to protect the Canadian jobs that are impacted, continue to preserve market access. And how as provinces we can further some of these projects of national interest.

4:08And hopefully, I know we've been on expedited timelines, can even push those approvals forward faster because we have now additional pressures from our long time allies to the south. I guess we're talking about degrees of pissiness here, Keith, because yes, voters are rewarding the liberals right now, but they're also rewarding Doug Ford for all his kiss my ass comments. How do you think about that gradient of defiance that Amber just talked about and where it gets dangerous and where it's productive? I actually think that the political actors that play here are all actually playing into their own brands quite successfully. Yeah, this Doug Ford is the best when he's eating ice cream and telling people to kiss his ass. Mark Carney is the best one. He is the calm, rational adult in the room who can sort of describe how Canada is going to respond and build a new kind of rebuild our country in a different way in response to

5:11these things. And you can even take that further, which you wanted to talk about how Premier Smith and Alberta responded, Premier Moe and Saskatchewan responded, Premier E.B. They're all kind of on their brands, right? So I think the gradient is, you know, when times of peril, you kind of are going to be yourself in some of these responses. And I think that's what you're seeing from the political actors. Okay, on brand is one thing, whether it's good for the future of negotiations is another. Well, I do give kudos to Premier Daniel Smith, who has proposed a strategy of not doing counter tariffs because it's just going to lead to more retaliation. And you don't want this petulant escalation to just continue. I do think it is very harmful to Canadians and Americans to keep having these new numbers get proposed upwards in terms of countermeasure. So of course, you know, it's easy to play into those rhetorical partisan identities, but

6:13we also do have to think forward to how is this going to affect us a few years from now, because the president won't be in office forever. And I think the next administration might have a different approach to the relationship to Canada. What did you make of the response to Smith's, you know, putting her foot down again, not using energy as leverage? And to some extent, Scott Moe doing the same thing with Potash. I'm not surprised. We've got the old familiar accusations that this is treacherous behavior or, you know, time for the West to also suffer a bit blah, blah, blah, but I can't help but to notice it feels less loud this time. What's your observation, Keith? I would agree with that, actually. And I think it's just so understood as not a great idea. You know what I mean? Like I actually think Premier Smith, like you can say it, you could suggest the idea as a political attack and the Premier is not standing up with for team Canada, et cetera,

7:18but there is no good economic idea for doing that retaliation of an export tax on energy for the real very reasons why the Premier laid out, right? Like especially last week when he's caught the president, you know, Lake America, that's how far the sea's brain is going. I think the Premier, when she warned that line five could be shut down if Canada or Alberta reacted that way. I think she's exactly right. That's a huge threat. And that services, you know, a lot of communities, including Montreal, with the energy that they need. So I think it's a political debate that could be had, but I think, and I think a lot of Canadians intuitively understand that too. I know not all Canadians understand where energy flows in North America, but I think they understand that that's probably not the best idea to be when it comes to that export. And then on the Pada situation too, yeah, it's a really big point of leverage. I think we risk another retaliation too. And I don't know, part of me, I have sympathy as much as, you know, I'm a post-like, really

8:24don't like the Trump administration. The American farmers are being kicked the crap out of Bidonal Trump too. And I kind of have a soft spot for them as well. So because, you know, he's importing all sorts of beef and things like this and just, you know, crazy wacky doodle stuff. Yeah. So, you know, I think there's some things there. What's going to co-ay the Americans is, and co-ay the administration is going to be a different Congress potentially, pressure from inside the circles from, you know, state legislatures and the economies that depend on trade with Canada too. Do you sense, Amber, that there is a change in attitude overall in how Canadians think about energy through the various episodes of this now with GDP numbers coming up, showing, you know, things are looking great, thanks in no small part to oil and gas, that despite all of that, the usual noise we hear, it does feel like generally Canadians kind of understand

9:26what the trade office. I don't think oil and gas exports are just something we can switch on and off. It would be very disruptive to the entire supply chain, and as we know, it's very integrated and to even get back up to Canada, we're going through the US through line five and other areas. Yeah, well, we know that, but does the rest of the country understand that now? I think more and more people are, you know, learning more about the integrated chain of this. I mean, even when you look at the Trans Mountain pipeline that was doubled, they've reported that it's 94% at use when we thought that that would go empty for a long time. Canada is not a country that has strategic reserves. So if there was some kind of knee jerk reaction from the states to then do other counter to like the whole system starts to get, like I really think I don't think we should be going there in terms of, you know, putting these things on the table to do the next move.

10:29And frankly, even the Saskatchewan case, yes, potash, but now they're announcing they're going to be the almost largest supplier of uranium for the entire world soon. So if we want to position ourselves like a reliable strategic partner that has world class resources, I think we do need to take the high road as much as it would feel good to keep turning the screws. We can't do that. And I don't think that's the responsible thing to do. I would agree broadly, we should do smart things. And some things, little things that pissed them off, like Scott Mill has put attacks on American booths, he hasn't taken it off the shelf. Albert should do that. We absolutely should do that. There's other measures that we can take, you know, again counter measures, but again, at the tip for tap, as Amber has described, you know, ain't going to work because they're just so much larger than us, right? The number one thing we can do is build our country, right? The Prime Minister is hosting an investment summit in a week or so's time.

11:29I know he's looking for some big announcements out of there, but look at the American economy itself and look at the Canadian economy. The American bond market is a bit in chaos because the administration is in chaos. The only thing, propping up the American economy is the AI data center stuff boom. And that's why you had the President, you know, lashing out at the American people yesterday being like, listen up, pours. We're building these data centers, whether you like it or not. And you see investments coming into Canada at a far greater level, right? We can really do some great things here. If we stay on track and not even just stay on track with what Mark Kernie announced last year, we have to became Prime Minister in terms of accelerating projects. We need to double down on that stuff. And we can be highly successful and whether this storm, and I think not just whether this storm would come out a much, much stronger country at the end of it, like I'm bullish on Canada. Nevertheless, Trump is talking about Venezuela and this like deal that they've had put in

12:33Canada on notice. And then you've got separatists like Keith Wilson saying, all of this talk will just add fuel to the fire for the leave camp. Is he off base here? Well, with the Venezuela part that's being introduced into the US space, I think we do have to be cognizant that the US will get its supply from wherever its interest lie. And that our former arguments of being the most ethical place on earth doesn't hold a lot of water with this administration. So we do have to have that top of mind. I think when it comes to the separatist movement, they are trying to put some credible positioning in the window yet to be seen. These white papers from these anonymous writers will be gathering. I think that is a credibility problem. Let's read the papers when they come out and see what they're offering. But I think frankly, they don't have a lot of momentum. I think even when you look right now, what's happening within the UCP movement, there's

13:36a number of incumbent MLA's conservative MLA's that are facing nominations. And a lot of the people that have been taking up the papers against these folks have been separatists and they've been losing to the incumbents one by one. And we saw that even this week in Nolan Dix area in the Grand Prairie region where you do have sort of these challengers that think they have this widespread support. But when it comes to actually cementing that, the government of the day is winning. And they're winning. I think because of hearts and minds are still with them. And frankly, I think the premier, if you've noticed her calendar recently, she's been doing a lot of these more intimate backyard parties where she's addressing Albertans one on one where it's kind of like open to UCP members, open to town halls to try to address people where they're at. And I think that's perfect to be pretty effective going into this October referendum. Yeah, but there's a lot there. Like when it comes to the white papers and things, the separatists are working on.

14:40I look forward to reading those from Mr. Wilson's side because the stuff that we've had so far has been, you know, well, the out of being like, we're going to deport all non-white people. And here's a breeding group. To be clear, that's not the lead Alberta, the side. That is, yes, to be clear, Keith Wilson is a reasonable Alberta and he respects other Alberta and I, you're not going to see that out of his efforts. The separatism thing is almost kind of dull for me right now. Like the polls aren't really moving that much at all. People are pretty hard in terms of their, what their intention is to support. The biggest question is going to be, do people turn out? The separatist side with everyone expects, including myself, motivated and high turn out from that vote for the obvious reasons. And there is large concern about the remains side because here's the thing. People Alberta didn't want this referendum. There's not a lot of chatter in the cafes and the bars and things like this about it actually

15:44because it's not an issue for normal people, which are they going to show up? Is the question, especially when it's not a binding referendum. So the turn out is going to matter a lot, but you know, we're seeing a lot of special ballots being released, almost 500,000 so far signed up for this. So that's good. And that's, Alberta is wanting to avoid the absolute mess that it's going to be on election day because of the ballot situation because again, the conspiracy theorists wouldn't allow us to cut votes with robots. So we have to use humans with more rates of error at 10 times the cost. Thank you, conspiracy theorists for wasting my tax dollars on your stupid stuff. I'm almost ready for the next wing of the conspiracy, which is like the regular people that perhaps requested an early ballot because they didn't want to go. And then the mail-in ballot conspiracy of maybe that wins the day. So, there's always going to be a narrative, I think we have to fight. But, you know, this will give the premier a clear mandate about what to do next.

16:45Then if you can put that to bed, then we can move on to the next side of issues. Yeah, I guess a lot will depend on what these white papers. I'm talking about both from the from Keith Wilson's group, but also from the University of Calgary School of Public Policy is putting out a cost-benefit analysis headed by Jack Mints and a whole bunch of economists. And I'm sure we will compare and contrast the findings on both of them. But speaking about dollars and cents, the counter tariffs are coming in and they will hurt consumers at home. Economist Trevor Tum has written a piece for the hub costing out what it will be for a typical family with two kids, around $250 a year. What's worse though is that it's regressive and that it will hurt lower income Canadians disproportionately. So are we united enough and pissed off enough to bear this kind of pain? Yes, yeah, we are.

17:47Trevor's made the argument before he released this stuff for a couple of weeks basically suggesting, hey, economically speaking, not responding is maybe best for Canadians. In their pocketbook, but at the end of the day, there needed to be a response. We have to respond in some manner. And so the costs are going to be the costs. Canadians also want to have their governments at least stand up for them in some way. And I think Canadians are willing to bear this quite frankly as long as again. It's the most important reaction that Canada does is how do we build our country, become the largest supplier of the world's uranium, these types of things. That's the number one thing if how we respond and that's even more important than these. Yeah, I think consumers will also vote with their feet in the sense of if they can afford to maybe avoid these American products anyways. I'm curious to actually see the numbers on the shelves in our Alberta market, like how

18:49has Bourbon been flying off the shelves or has it been sitting there? There are things that can be done that are not economic, like placing it on the bottom shelf and maybe consumers walk by. To me, what's interesting, even just getting ready for back to school season in retail, I've now noticed that there are some retail outlets that have American and Canadian pricing. So you're really seeing how the price of American dollars versus Canadian dollars, and I think how far your budget's can stretch. We'll get people thinking when you have to prepare family budgets to get through the year, but I think people that do have perhaps a little bit of extra income, disposable income will vote with their feet and pick the products that cost a little bit more because they're Canadian and they can choose to do that. Interesting observation from a avid listener, Tom Sien Pitman, who comments on a lot of

19:50our podcasts, and he was talking about the other side of that ledger. So the support programs for the businesses impacted by tariffs and counter tariffs, and since central Canada is more exposed to these costs, we can assume that the supports will largely benefit them. So does this not amount to what he called it, another form of consumer wealth transfer to the manufacturing sectors of Ontario and Quebec? I guess my response would be, I think we discount a lot in Western Canada how much of that economic activity in Southern Ontario and in Quebec is also supports economic activity and Alberta. What do you mean by that? Well, I mean that there is the steel that builds pipelines and the aluminum that goes into a bunch of other things.

20:51With respect, I think it is well accurate in one sense, narrow in a very other sense about what this country's economy is on. I'd never been one to really go that far in terms of the Western alienation piece. We contribute a lot to Canada because we make more money in Alberta and because we have the world's most important commodity here. We're tax the same rate as every Canadian. So a bunch of rich people in Toronto working in the financial sector, they're also wealth transferring to other people too. So that's the way I feel about it, but I know well many Albertans don't. Yeah, I guess the human capital too, the amount of people who move here from the east, like they really add to RGDP and their productivity, they come pre-educated and everything. So they're pre-educated. They have a bachelor's from Queens, alright? That was just my quick way of describing it.

21:52Anyway, Amber, what do you think about that? That's reviving the Western alienation argument that somehow these tariffs could have that effect. Well, I think because the way the country is, it's just very regional in which sectors we really specialize in. When you look at Ontario, the auto sector being so important and that 15% tariff that was supposed to come in, a lot of the auto manufacturers said we cannot maintain this. This won't go forward. When you look at it from that lens and the purchasing power of other provinces that a lot of the transportation perhaps flows through there, I would have to look a little bit more closely at all of the different sectoral issues because, you know, Quebec obviously relies a lot on dairy industry and some of the protections there. So there's a lot to unpack. I don't know if it's as simplistic, but I hope that doesn't feed into more alienation. Yeah, I mean, I think the gist of it is correct in that I would expect probably not the

22:53majority of claimants will be from Alberta, right? Like of these support programs. No, but that as the premier has discussed too though, there is, there will be impacts, right? And it's like, yes, yes, when we look at the graph of whatever Trevor Trooms graph has updated, this day is, is like if it's 0.3% in Alberta, yeah, it looks minuscule, but there's actually people behind that number two and it's in the tens of thousands, not at the same scale, of course, but there will be some trade exposed sectors like you think manufacturing, we have some manufacturing here in terms of like for inter-Turban manufacturers, these types of things, forestry. So we're impacted too. And if you're going to campaign on the stay side of the Alberta separation question, what would be the politically smart thing to do right now? Lean into that, you know, Rara Canada moment we're in right now or lean into the uncertainty

23:55on the US side, whether we're talking about its crazy fiscal pressures, Trump, like all of these uncertainties that could translate to greater uncertainties for Alberta, if we are to separate and presumably become totally dependent on the US. I'll go really quick Amber. I think the argument for the stay side right now has to be around a lot of the Trump and things. So the Alberta were to separate and listen to what the administration has been saying because they are in contact with the separatists. Alberta would become a vassal state period and I think Alberta is understanding that and I think that when I was saying earlier about unconcerned about Toronto, I think that's possible way to talk about that because half that separatist movement wants to become the 51st state anyways. I know when others don't, but yeah, I think that's something that needs to be talked about because I think that's the truth and I think Elburns recognize that. Yeah, I think the Canadian patriotism is not owned by anyone camp in a sense and I think

25:01there's many ways to sort of express it to contribute to the argument of staying and I think Daniel Smith is doing a good job of convincing those sort of more soft separatists of the value of everything that's been done so far. And there are all sorts of other transition costs that will factor into it when we start to see these white papers coming out. There's going to be all sorts of unintended hidden costs that we never even thought about of other things that I think might sway people. But Ottawa should not interpret the weak support for separatism as proof everything is rosy and that we can just rest on our laurels. They actually need to still take everything very seriously and keep the pedal to the metal on getting these projects done because I think that's the way to build more unity across our country is when people are employed, when we have new industries thriving, when we have investment flowing through, when we have more moments that we can cherish and have

26:04disposable income and celebrate things together will help us all. So there's many different tactics and I think different people are leaning into what's working effectively for them in their political brands. Yeah, so turning to controlling what we can control, which I've lost count of how many times I heard people say that now. Karni is about to host his first Canadian Investment Summit, Keith, you mentioned this event will bring together institutional investors from around the world with ambitions of unlocking more than a trillion dollars in investment. I'm starting to get that awesome power thing when I hear the word one trillion dollars, not just like this investment thing, but also the amount of debts that the US has and what's happening with the bond market. So I feel like trillion is just like a number we throw around now. But let's zoom all the way out beyond how important this is. We've talked about that already.

27:05If you are an investor in Abu Dhabi or London or Singapore, whatever, what is the sell to them, you think? Stability. You're not going to have to file another permit because we changed the name of a lake because I got mad about something. Like we stability, like on the regulatory clarity, like I recognize the regulations are not that clear because what we've done is built a regulation. Like these regulations don't apply if we say so. Right. But the regulation clarity of C5 and the major projects office, over. Yeah, we got these walls on the books, but we're going to have a special process to not use those laws. We're going to do this this way now, which was actually as was easier than untying all that other stuff. Anyways, we are the argument is stability. And here's the thing. Like I know I'm the biggest Mark Karnie fanboy. So forgive me again, but people trust Mark Karnie and the investment community too. Like he's like obviously his climate broke field and all these other things.

28:07Like he has a, I think it can be a convincing plan. And the way they're putting this all together, like there's the deal books, right? That are being put together. So investors that are there can look at all the different opportunities in Canada, the Prime Minister's office and the Prime Minister are trying to get some deals announced around this as well. To sort of a proof point, but yeah, I would say broadly, it's visa V, our competitors in North America, stability is the argument. Your dollars are actually much safer here than they are in the United States. Yeah, but so much of that stability came from our closeness with the US as well though, right? It's like you get to kind of access part of the US market through the stable, sane person. And now we don't have a trade deal for whatever, like is I know it, I don't know when you say whatever and disagree and what I mean is I think what investors are coming here for

29:08now is going to be much more like we need to develop our resources, right? That's that's key. Okay. Like need to understand that is our number one strength in the global economy is our resources, our natural resources and not anything else. And so we develop those. That's where these types of investment because people want supply of critical minimal minerals and things like this, right? That's where this investment is going to come. We're much more stable on that side of it. If we can hold up our end to the bargain and actually develop our resources. Mm hmm. Does it matter that carney's going into this summit without a trade deal with the US somewhere? Well, to Keith's point, I'll give carney he is credible in a room of investors. So let's hope that works in our favor. But these investors aren't going to suggest they're going to bring to trillion dollars to Canada on a summit slogan. We need the policy environment to match. So if they can see that major projects are moving forward, that will be entirely for

30:08our benefit. Like these investors are going to be examining tax environment, approval times, energy costs, labor availability, infrastructure, and whether the rules could change halfway through. So I think they would want to see these major projects checking all the boxes, getting done and then they'll feel like their capital could flow here to make the next round of major decisions. But I think for Canada, like it is a turning point, we're in a bit of a crisis, but we can use this in our favor to deliver for Canadians the next round of jobs and economic prosperity that I think people are looking for right now. Like if a project is going to take 10 years to do, that's when you're going to start to see investors move elsewhere. So we can just do as much as we can. And obviously, at some point, we'd love to have the US as a reliable partner where we can continue to have that support. But at the moment, I think people won't discount Canada because the same type of behaviors

31:10are happening internationally. So what other economy would you start to consider more stable that the US has its back than Venezuela? There's still a lot of other things that would need to be heavily invested there to make the next partner of the US somebody else other than us. Yeah. Nevertheless, isn't it a bit hot, though, like right now, the timing of all of this? I know we're talking about long-term things and investments, timelines that go for years. But what's happened between Canada and the US, we see it already among world leaders. They're not jumping to the defense of Carnion giving him kudos. Everyone's kind of just trying to stay away from the sight line of Trump right now. And this happens if you're basically drawing attention to yourself right now. Nobody wants to deal with the dumb chaos of having bodies of water renamed. If England and France piss them off, it's going to be the Trump channel.

32:10He's already talking about the straight of Trump for the straight of removes. So anyways, everyone's just trying to avoid that stuff. But if you want to be negative about things, as you know, I love that. There's still lots of reasons to be impressed about the state of the world. And if we all have had had a bit more of a positive discussion about the state of Canada, like, high and bullish on Canada, Ambers said something nice about a liberal. Like, this is wild stuff going on here today. So, you know, we will, I think we'll see all this all plays out. But I think it'll be interesting is we, there's roomy reason for optimism. Say, and Alberta, if we can get the separatism referendum behind us, and it's a strong result. And Canada follows through on it's what it's been saying it's going to do. You don't think investors are a bit reluctant right now to wave though the, yay, support Canada flag right now. Well, I think it is interesting because, for example, let's take the data center example where you have a lot of American tech companies that are perhaps coming to Alberta.

33:16I think it's interesting that Ontario has announced a data center strategy with the intent that they're not going to share the data with the US. And we're going to be sovereign AI. Like, entering into that investment might seem more political than just coming to sort of a neutral place like Alberta that isn't throwing threats at Trump. So, it's almost like you have to unpack it a little bit because if we start to get a ton of investment here, no, I don't think anybody's going to notice like Trump is not going to notice in the sense of like he won't think that that's. You don't think people are going to go near and near and near look at one trillion investment. Not going to be like a one trillion dollar investment from one company. We're going to need to have thousands of investors in different things that I think won't be scrutinized at that level. And that's how we avoid is I just spread it out. Because you can only tweet truth social so many times a day. If he's about a thousand companies, it's going to be really tough for him to weaponize the administration and retaliate against those companies too.

34:20And these are world wide companies perhaps. Like it's not just like we're stealing American investment. It could be other world wide companies that are. There is a whole other alter world that is trying to exist and outside of Trump's attention. And everyone's really aware that maybe we don't talk about the workings of alter world. Oak loud so much because of those reasons, which is just a crazy thing to say about how just the sort of. Oscillating insanity that is going to day to day basis of the US government. Well, that alter world literally exists in Google maps right now. So this is true. Depending on your geolocation, like it will tell you different things. I got to get on map quest. Map quest. Oh, what a thought map quest is back. Way to go map quest. I will print out the instructions to the location. That's how I use it back in the day. Well, thank you guys for this lively conversation. Pleasure to be here. Bye.

35:20Keith McLaughlin is a former Alberta NDP staffer now with US public affairs and shift media strategies. And Amber Ruddy is a conservative strategist and VP with council public affairs. I'm Felice Chin, the hub's Alberta bureau chief. Thank you for tuning into this episode of Alberta Edge, where every story and conversation begins with a Western perspective. Alberta Edge is generously supported by Don Archibald, the hub thanks him for his ongoing support.