Politics! Carney government ramps up

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All right, Erin, as I just said, Parliament resumes in less than a week, and the Prime Minister has made it clear that the economy is the focus. The conditions are rough. The unemployment rate rose to 7.1% in August. 66,000 jobs were lost, mainly in part-time work. This is the highest it's been since the pandemic days, and worse than some economists predicted. Paint me a bit more of a picture of the backdrop here and how much of a challenge will this be for Carney's government? Yeah, it's a big challenge. I mean, if you, you know, go back to when he launched his leadership in Edmonton in January, you know, the message at that point from him that he made crystal clear was, if you remember one thing from what I say today, remember this. I am going to be completely focused on getting our economy back on track. And I don't know that even then we necessarily knew the extent of how much of a challenge that was going to be. You know, there's longstanding concerns about the productivity and of the Canadian economy and the strength of the Canadian economy. But now you're seeing... added to that the actual impacts of tariffs and worldwide trade disruption. And so that is, you know, further, you know, challenging or undermining the Canadian economy. And that, you know, that creates a couple challenges for Mark Carney. First is the conservatives are already saying, you know, you came into office promising to create the strongest economy in the G7. Where's that? Nothing is getting built. Nothing is getting done. and our economy is collapsing. And then the second part is, you know, actually responding to the situation in terms of policy, in terms of, you know, either dealing with the tariffs, getting a deal with the United States, or taking action domestically to, to, you know, boost the Canadian economy and sort of bring it out of this lull, I guess. And so he did announce a bunch of measures on Friday. designed to address of the domestic impacts. Our overarching mission in this time of crisis, our overarching mission is to build Canada's economic strength in face of unprecedented change. This includes rescaling initiatives, extending EI to 65 weeks for long tenured workers. That's 20 weeks more. Then they currently get a $5 billion fund to help businesses develop products and new markets. When Carney was making the announcement, he talked about the U.S. tariffs as a rupture on the global economy. And its effect will be profound. Workers displaced from their jobs. Supply chains that have existed for decades disrupted. Companies forced to change where they find their materials and their products. And all of this is causing an extreme uncertainty that's holding back massive amounts of investment and as a consequence slowing economic growth. What did you make of the message the PM was trying to send there?

Yeah, I thought it was interesting because, you know, throughout the summer there's been this sort of criticism or narrative taking hold that, you know, Mark Carney has been, you know, elbows down or he hasn't been as tough with Trump as maybe some people expected. You know, opposite that storyline is, I think, you know, this other phenomenon, which is I don't know that there's another Canadian politician speaking in such stark terms. about the larger situation with the United States than Mark Carney. You know, you go back to the campaign and obviously he said quite evocatively the, you know, our old relationship with the United States is over. He's still talking in that way, you know, like as he's announcing these measures last week that are in, in some cases are very kind of short term, you know, changes to EI and support for workers. He's also talking about it in a much more sort of long-term way as this big challenge and that's going to require a transformation of the Canadian economy. You know, that I think sets up where the rest of the fall goes insofar as he's saying. we have this massive challenge. And now I think it's kind of on him to explain what needs to be done about that challenge and, you know, how to navigate some of, I think, what even he acknowledges or would probably acknowledge are some of the tough choices ahead. Like the subtext here is clearly that Canadians should not be expecting some excellent deal with the United States imminently. Yeah, I think that has become more clear, you know, both just from looking at the deals the other countries have signed with the United States. But yeah, you hear that from Mark Carney too, right, in saying the United States is now charging for access to its economy and, you know, it's charging tariffs and it's expecting investment and it's asking for, you know, unilateral actions by other countries. And. I think if there was ever kind of some idea that we were in sort of this little trade war, this kind of, you know, discrete or short-term or narrow fight with the United States, the argument Mark Carney's making is no, this is a long-term struggle and this isn't going to be, you know, over in a month or two.

Part of the announcement around, you know, according to him, measures to make Canada's economy more resilient was this decision to pause the EV mandate, the electric vehicles mandate. The mandate requires the number of new zero emission vehicle sold in Canada to hit. 20% by next year, 60% by 2030, and 100% by 2035. And this was all designed to help us hit our emission reduction targets. The mandate is now going to go through this 60-day review. On Monday, I couldn't help, but watch with interest, as Carney was asked by reporters to explain how Canada's planning to adjust climate change targets, given that EV mandate announcement. And he wouldn't. directly give an answer. There would be a more comprehensive approach for climate competitiveness as part of our global industrial competitiveness strategy, and you'll see that in the coming weeks. That's the first point. What did all of that say to you about where the government is at right now? With its climate goals, what does it tell you about what it is laser-focused or prioritizing? I think it raises a lot of questions about where they're going to land on climate action and their greenhouse gas emission targets. I think the Zev mandate was sort of shoehorned into this announcement because, you know, yeah, you can make the argument that the auto sector is facing, you know, further challenges from these tariffs. And so now is not the time to go forward with this mandate. There's these sales requirements. I think the other way of looking at it is that the federal government and a couple provinces had allowed their consumer rebates for EVs to lapse. That had caused sales to go down. And so even the prospect of making 20% next year was going to be pretty hard. The other part is this 60-day review that they're going to look at the policy and consider how to move forward with it. I think the real question then becomes, are they moving forward with it at all? Or is this sort of the end of it? The problem for Carney, I think, both politically and practically, is that, you know, his first two big moves on climate policy now are repealing the carbon tax and punting on the Zev mandate for at least a year. And so... You know, for a guy who came to politics with a long background and a reputation for working in the climate sector, you know, the question becomes, you know, what exactly is your climate agenda going to look like? Because right now we only know what you're not going to do or what you're delaying. You know, I was looking at some polling recently done by our pal, David Coletto. And, I mean, you do, you do see climate pretty low. on the list of priorities that people are looking at right now. But at the same time, there were a lot of people who voted for Carney hoping that he would do something on climate, given his history. And a lot of people kind of left a center who lent this party.

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immigration and specifically the temporary foreign workers program that has been making a lot of headlines this past week. The opposition in conservative leader Pierre Poilievre has been talking a lot about the TFW program. He wants it scrapped, claiming that it's shutting young people out of jobs and driving down wages and just remind us what evidence is there around those claims. Yeah, so there's a long history of concerns about the temporary foreign workers program and questions about whether it should be reformed or tightened. And now you have this issue of rising youth unemployment. But it's not entirely clear that there's a direct link between the temporary foreign worker program and youth unemployment, at least as a major driver. It might be a contributing factor somehow, but I don't know that economists have yet settled on a tidy answer for youth unemployment. And I don't think there's consensus that the problem is the temporary foreign worker program. But politically, it's a pretty easy... program to target because, you know, the idea that you're bringing in people from outside the country to do jobs that people inside the country could do, you know, there's something intuitive about pointing at that and saying that's a problem, that's an issue. And I think this discussion as it moves forward probably needs to get a bit more specific about what exactly the issue is and exactly how the temporary foreign worker program is being used. Because even the conservatives. You know, in announcing that they would abolish the temporary foreign worker program at the same time, so they would also have a carve out for the agricultural sector where they acknowledge that there's a need for temporary foreign workers. And so I think... You know, this discussion is kind of being had at a high level. And it's, I think the real kind of debate is in the details of exactly how it's being used. It wasn't that long ago that, that, you know, the argument was, well, there are labor shortages and that's why we need to bring people in. Yeah. And these are jobs that people don't want to do. Like, we can't find workers to do here. Yeah. So the argument, the argument has flipped very quickly. I think as much as the conversation has shifted on immigration, it's important to note that if you look at the polling, Canadians still see immigration as a net positive for the Canadian economy. And so I don't know that the Canadian public is all ready to get behind a kind of anti-immigration argument. But I think there is plenty of room within that. to say, well, exactly how are we managing this and exactly how much immigration are we accepting?

Erin, let's talk about the list. Can we talk about the leaked list of infrastructure projects? So we now know that an office is going to be set up to look at these projects that are supposed to be fast-tracked in the national interest to help boost the economy. That office will be in Calgary. And then this list has 32 projects being considered. These are potential projects based on proposals made by provinces or other groups. You know, being on the list doesn't mean that it's been approved. There is an oil pipeline on the list, something that Alberta, Premier Daniel Smith, has been pushing for only three projects are exclusively based in Ontario, something that Premier Doug Ford is already taking issue with. What stands at? What stood out to you? There's some anticipation that we're actually going to see the first sort of tranche of... successful or preliminary national interest projects come forward soon. I think at that point is when this actually gets interesting. Because if you asked a thousand Canadians, should we try to move faster on major infrastructure projects? I imagine in the abstract, people would say, yeah, sure, that's a great idea. I think if you start asking about specific projects, I think that's when it gets... maybe a little more contentious. First of all, there will be questions about how much public support are there for these projects. Do they have indigenous support? What do the sort of practicalities of building these things look like? Do they need public funding? And then I think you'll also get this sort of other conversation, which will be how many projects did each province get? How many projects does each region get? That first list is going to be picked apart. And I think the other thing, of course, is... As soon as the list comes out, you know, the first or second question is going to be, is there a pipeline on the list? And either way. The second question. I don't know. Maybe I'm, you know, imagining there's the first question about something else. But like, yeah, like that will immediately come out. And one way or another, you know, there will be a difficult answer. Either, yes, there is a pipeline. And here's how we justify pursuing it. Or, no, there isn't a pipeline on this list. And here's why there isn't. And, you know, that in any conversation in Canada about infrastructure, it always comes back to pipelines. I think Mark Carney has already himself expressed some frustration about how much it all comes back to pipelines. But I'm sure he knows that that's the political reality that's going to come as soon as he actually starts putting some projects forward. Yeah, tangible stuff to talk about, but also tangible stuff to argue about, organize against. Yeah. When we talked the other week, we talked about how the budget is going to be a pretty significant moment for this government in October. I know that budgets are often big deals in Ottawa, right? But like. And for people, for people like you, but this actually is like going to be a pretty significant budget, I think. And so we started to hear from Kearney last week that this budget will be an austerity budget and an investment budget. And before we go, Aaron, I wonder if you might.

have any clarity right now and what that actually means. How can you have an austerity budget and also have an investment budget? Yeah. So with the caveat that budgets are kept under tight secrecy and I really don't know what they're talking about behind closed doors, I have a hard time imagining that this is actually going to be an austerity budget. in the sort of classic understanding of austerity. I would not be surprised if the deficit is higher than it was previously projected. And if, you know, total spending goes up, it's just that with these, you know, planned spending cuts or spending review that they're doing, there are going to be some areas that are going to see cuts that are going to lose funding. The money they take out of those areas. will, you know, to some extent, be used to boost spending on things like defense and infrastructure and housing. And I think that is the challenge for, you know, Mark Carney and the government writ large is to make the argument that the cuts they make and the spending choices they make. are the right thing to do. And it goes back to, you know, that larger conversation that he's trying to sort of frame about the long-term challenge in this rupture that Canada is facing. You know, this budget becomes part of that, right? This, this, the budget he's going to sell seemingly is going to be one based on what Canada needs to do to respond to this moment. And. It really could see a very significant change in how the federal government spends money and where the federal government spend money. And I think there's... the potential for a real reckoning about, you know, even if everyone can sort of step back and say, yeah, the world's different now. Donald Trump's president and that's going to mean a bunch of things for Canada moving forward. This budget is, I think, going to be the point where that's sort of laid out in a way where people have to sort of grapple with what that actually means in terms of what gets money and what doesn't. Yeah. Okay. Aaron, thank you. As always, talk to you soon. Anytime. All right, that is all for today. I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow. For more CBC podcasts, go to CBC.com.