CTVN - Saturday, May 25, 2024 - 12:00 a.m. (ET) - Segment #31

(Taking Stock theme) >> Welcome to Taking Stock, I'm Amanda Lang. Coming up, a look at trade in Canada, including the confidence level of business relationships with key trading partners, and the dirty secret in Canada that internal trade is still far from free. That's all ahead. First, Canada's trading relationships are vital to our economic wellbeing. Here's what you need to know. Trade matters, it drives two thirds of Canada's GDP with one in six jobs linked to exports. Economists estimate that incomes are 15% to 40% higher than they would otherwise be thanks to trade. Canada has 15 free trade agreements that cover 51 countries, representing 1.5 Billion consumers. Our relationship with the U.S. is of course the most important-- The Canada-U.S.-Mexico agreement which replaced NAFTA was worth $1.8 Trillion in 2022. In 2022, Canadian exports and goods and services rose 21.2%, to $940.4 Billion, driven by price increases, especially in commodities. Meanwhile, goods and services imports also rose 20.5% to $936.2 Billion. 2022 wasn't as good for foreign investment. With new incentives for investment in the U.S., Canada saw foreign investment contract 21.5%. And Canadian investment abroad also fell by 15.8%, though both were above the long-term pre-pandemic average. Exporters in Canada are feeling good these days. Export Development Canada reports confidence is up 5 points to 70.1, though that is still below the historical average of 72.7. One big reason could be uncertainty about the U.S. trade deal. It's up for review in two years time, and a Trump Presidency could spell trouble; he's promised tariffs on imports of 10%. Given how much is at stake, maintaining confidence in our trade deals and in our partners is obviously important, and are we feeling confident? Ross Prusakowski is Deputy Chief Economist at Export Development Canada. Thanks for being with us. >> Thanks for having me. >> And of course, at EDC you keep tabs on how people are feeling, exporters. Uh, the numbers I would say are pretty good, Ross, but below historical average. So what do we make of that? >> I think what we're making out of it is that consumers-- Or sorry, businesses are feeling more confident after last couple of years of COVID disruption, but we're still not all the way back to where we were pre-COVID. I think interest rates and the uncertainty around the global environment, and especially some of the trade disruptions with 90% of exporters flagging that this is a key issue for them, that is what's keeping confidence from getting back above historical levels. >> And of course, we just recently saw tariffs increase by U.S. President Biden on Chinese goods. It'll be phased in over time, but it is an era where tariffs are alive and well in the world, even among trading partners, Ross. So what do you think that does to confidence for exporting businesses? >> I think it's just a continuation of what we've seen since the Pandemic where we had supply chain shocks, where we had tariffs coming from even before the Pandemic with the Trump administration; this is just another iteration of it. I think what it means for businesses is that, you know, the era where you could have a supply chain and not have to mind it too much? That's ended. So now, companies have to be more mindful of global developments, and also pay attention to how the geopolitics are evolving, and they might get caught if they're not. >> Because we know that, uh, you know, on the geopolitical front, free trade is less-- I don't wanna say it's less in vogue, but it certainly seems to have less support around the world, even among former allies than we have seen. Former trading allies, I should say. And I'd put the U.S. on that list, right? We had to renegotiate our biggest trade deal, it's up for another review in two years. It just feels a little bit less like a given. Does that, from where you sit, has that changed the tone for businesses that are considering trying to do trade in another country? >> I don't think so at all. I think it's something to be mindful of and I think it's for companies to pay attention to, but the benefits of international trade are pretty extensive. It provides diversification, and especially given the slow growth environment that we have in Canada and a little bit in North America, given high interest rates, given our slow growth in Canada because we are so indebted-- It provides an avenue for businesses to continue to grow revenue, to grow employment, and to, you know, challenge other competitors and make sure that they're not getting boxed out by international competitors themselves. So though it's an extra layer of challenge, I think it's actually one that companies can deal with, and if they manage it correctly, can really help supercharge their businesses. >> And to your point, uh, the economy benefits from more open trading, from businesses that are looking at the globe as their competition. So therefore I guess, it stands to reason that we should look at policies that are supportive of trade. Do we have the right mix in place, could we do better in this country of supporting

businesses that do wanna trade? >> I think there's always opportunities for improvement, especially given, you know, we have a diverse and, uh, a diverse country with a lot of different governments, and a very large country geographically, so there's always opportunities to improve infrastructure, to improve coordination between levels of government, but I'd say that broadly what we've seen in Canada is a pretty supportive policy mix. We have CTPPP with the Indo-Pacific, which is supportive of trade. We have CETA. You mentioned the renegotiation of the Canada-U.S.-Mexico agreement-- All these put pretty significant platforms in place for Canadian companies, I think now is just enabling them to use them more, and for companies to start looking outside our borders a bit more. >> You know, the old saw is that Canada's a trading nation but not necessarily a nation of traders; how are we doing on a cultural front? Are we thinking entrepreneurially, are we thinking like traders? >> Yes, with our trade confidence index, you can see that, you know, roughly 20% of companies are already doing business internationally and looking to expand their investments, and you've got another, about a fifth, 20% of companies, that are looking to actually start exporting even more. So I think, you know, there is always this Canadian trope that we are conservative, we are a little bit reticent to go out into global markets. But what we are seeing is that companies see that as a key source of growth, especially given the current domestic environment. So that's a space that we actually expect that we will see as we go forward more demand, and in our end of year survey we are expecting probably even more interest in exporting. >> Amanda: Ross, it's so good to have you for this. Appreciate your time. >> Thank you very much for having me. >> Amanda: Ross Prusakowski is deputy chief economist at Export Development Canada. Still ahead, Canada's good standing in the world is important when it comes to our trade relationships. So, are we losing influence? Stay with us. -Ahh... this thing isn't getting any better... -And it won't get better. It's a nail fungus infection. -On top of that, it looks gross! -and it can spread to other people. It's contagious. You need a prescription. Ask your doctor or foot care practitioner about prescription treatments that can be applied to the nail. What would you like to payfor your hotel room tonight?$249, $225, or $199? Same room, same service.Just different prices. It's really up to you. Well, nobody asksyou this at reception, but that's exactlywhat trivago does. trivago compares hotel pricesfrom hundreds of booking sites. So, save yourselfvaluable time and money. 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Have we seen a degradation of our relationship with other countries? >> I don't think it is a general degradation, but there is a question whether we are providing value, especially on defence, when we step up to the big tables, Amanda. I don't think there's much debate about that. >> And we did of course see the government recently raise the amount we will spend on defence. Do things like that help to put us in a different position at some of those tables? >> It sure helps. There is no question about it.

It is regarded as a big step along the way. Not there yet, but definitely helps. >> One of the realities seems to be that we are in a world, in an environment, where trade and freer trade, ever freer trade, is not really a given anymore. Uh, you could say that it started with the Trump administration, but it's been adopted everywhere, Janice. And we see it from the UK. We see it in Europe, even in Canada. There is just a more protectionist mentality. For a trading nation, an exporting nation like ours, what kind of complications does that present? >> This is probably our biggest challenge, Amanda. The world has stepped back from free trade. It's not that the proportion of global trade as a proportion of our global GDP is not growing. It is, but it is increasingly regionalized. For Canada, there is no question that will push us to concentrate on our own region, and particularly our biggest trading partner, the United States. >> Even there, we are all reminded of course from the renegotiation of NAFTA, now CUSMA that you know, things aren't always flowers and sunshine with our relationship when it comes to trade with the US. Are we still though do you think in a pretty good position in terms of keeping at least the free trade we have, if not expanding it into some problematic areas that we have seen in the past, like softwood lumber, like steel. >> You know, complacency is our biggest enemy here. Um, it's not only Trump. It is the Biden administration, which continues to talk about raising tariffs. Um, we are on the verge, I think, of some extraordinary new measures directed against China. It is the Biden Secretary of Trade who said, NAFTA II, CUSMA, is up for renewal. Everybody should come to that table with a degree of uncertainty. Nobody should take this for granted. Canadians cannot take this for granted. >> Which does introduce this uncertainty. This kind of renegotiation. The sunset clause they built back into this agreement every six years. Meanwhile, Janice, I do have to ask you. We have this bill passing through now, passed second reading of the senate, that would make it illegal to negotiate around supply management. How does that hamper us as we head back into reopening the negotiations of that North American deal? >> I am shaking my head, Amanda. The biggest issue-- one of the two biggest issues that were toughest to negotiate with the Trump administration last time was supply management. It is our form of protectionism. I have no doubt it will be on the table for the next renegotiation that will take place beginning in 2026. Should this bill pass the senate and become law, it effectively ties the next government's hands. Now you can say, that's great. We can say to the United States we are constrained by law. I don't think that will cut it with US trade negotiators. >> Amanda: Janice, we've got to leave it there. It's great to have you for this. >> Pleasure. >> Amanda: Janice Stein is a professor at the Munk School of Global Affairs and Public Policy. Our relationship with the US of course remains the most important one we have in just about every way. But with the nation's elbows up right now, what does the path ahead look like? Beth Burke is Chief Executive Officer of the Canadian American Business Council. Beth, thanks for being with us. >> Hi Amanda. Thanks so much for having me. >> So, this all-important relationship feels like it was a little bit tested as we renegotiated NAFTA, now USMCA, or CUSMA. What do your members-- What's the kind of impression you get about the feeling between the two countries right now? >> You know, I think the relationship is really strong, right? There's about 200-- sorry, 400,000 people crossing the border each day, $2.6 billion of goods and services moving across. I think from a business perspective, it couldn't be stronger. We are invested in making the economies work together, focussed on how having business at the table is important to both countries. >> And the trade agreements obviously keep things flowing. Do you feel as though there is nervousness about the revisitation of that agreement in two years, or are businesses more focussed on just getting the job done day in, day out? >> Well, I think both, right? The Canadian-American Business Council was intimately involved when USMCA was negotiated the first time, and we intend to be very vocal partners as the review is approaching in 2026. >> And when you hear from members-- I mean, obviously talk of tariffs makes people nervous on this side of the border for sure, when we hear now both President Biden and potentially a President Trump sound as though tariffs are on the table. What's the-- from your point of view, what's the Council's view

of that? >> Well, we're really looking and focussing at ways that the relationship can be strengthened. So, looking at supply chain efficiency, regulatory cohesion and cooperation are really important. Having predictability and strong market access are really important for the businesses that operate cross-border. So we're really focussed on those things, and we're really pleased to see that Minister Anand is coming to DC this week to meet with her partner at OIRA to really make sure the regulatory cohesion is working well, 'cause that's going to save hundreds of millions of dollars. >> That focus on regulation reduction, on red tape reduction, is important. Do you feel as though there's good progress being made? >> Absolutely. The conversation happening is great, and progress happens when people are at the table. The Canadian-American Business Council just had a round table discussion with Minister Anand, sort of sharing our thoughts and hopes for how that conversation can go, and we will continue to be having it on this side of the border as well. >> There-- we get this impression that free trade is still obviously very much the name of the game across that North American zone, but that the tone around trade has changed a little bit. Do you think that's sort of fair from the point of view of the businesses that are still working to move things across the border, that are still relying on our trade agreements? Does it feel as though there's a bit of a shift in attitude in recent years? >> Well, I can tell you from a business perspective, what I'm seeing from our members is that there's a bit of a move away from just necessarily the Canada team and the US team, and they're really operating more like a North America team, because that's just the way the market is moving and the way the business is flowing. So while there may be protectionist tendencies on either side of the border from government, that's certainly not felt in the business community, and we will be quite vocal to make sure that that cohesion exists at the government level as well. >> So in a way, more integration across that North American zone. >> Absolutely. >> And where does that take-- when businesses are kind of planning for the future, that sounds like we're going to see more cooperation even at the level of state to governor, at lower levels of government. Does that make sense? >> Absolutely. I think business will be involved at every level. You know, the efforts that are happening right now around different levels of government reaching out from Canada into the US is welcome. From a business perspective, we really believe that success is driven when everyone is at the table, and we will be loud advocates to bring everyone together to make sure that the best ideas are put forward and that we can actually, you know, cooperate and keep the integration together. Because business being at the table and having a sound voice is not just important for business's sake, but it's also important for both countries' economic and national security. We've seen the integration of critical minerals, critical infrastructure, supply chains at large being a really important piece in this relationship, and the Canadian-American Business Council will be present and participating in that conversation. >> So glad to have you for this, Beth, appreciate your time. >> Thank you so much for having me, it was a real pleasure seeing you, Amanda. >> Beth Burke is chief executive officer of the Canadian-American Business Council. Still ahead, how barriers inside Canada are costing us a fortune. If you don't have group health benefits at work, are self-employed, freelancing or retiring soon how can you protect yourself from continually rising health care costs not covered by your government health insurance? With SureHealth from Green Shield Canada. Working freelance, I love knowing that my SureHealth plan helps to protect me and my family from a lot of routine medical expenses. Host: Like prescription drugs, dental care and vision care. 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don't have health coverage at work, are recently retired or retiring soon, get SureHealth now and protect yourself and your family from rising health care costs not covered by your government health plan. Don't delay. Visit SureHealth.ca now or call the numberon your screen for your free, personalized SureHealth info package. TO FIND A FOOD STAR GORDON FACES HIS BIGGEST RIVAL EVER. Who wants to be on team Vanderpump? IT'S TEAM LISA VS TEAM GORDON She can Vanderpump off. We're done ON CTV >> The barriers to trade in Canada are sometimes higher between provinces than internationally. Deloitte has estimated that those barriers add the equivalent of almost 7% tariffs on goods moving across borders inside Canada. That's a massive cost to businesses and consumers. Ryan Manucha is a research fellow at the CD Howe Institute and also the author of a book on this subject. Ryan, great to have you with us. >> It's a pleasure to be here, Amanda, thank you so much. >> So we do often hear about these inter-provincial trade barriers, and let's just start with the very real costs. We can add them up; they're probably hard to measure, but we know they're costing us all money. >> Absolutely, yeah, there's estimates that are produced routinely between 8%-14% extra on the cost of goods that we purchase as a result of internal trade barriers. One more concrete example, freight trucking. A new estimate just came out: the inter-provincial trade barriers hike freight trucking by about 8.6%. So it adds up, especially the higher up you are in the value chain. >> So, and some of the-- I mean, we've been talking about this for so long, Ryan, that it's almost comical. For instance, speaking of transport which is a hugely important part of our supply chains, of our economy, trucks have regulations that keep them from travelling at certain times of day in BC and other times of day in Alberta which gives them this narrow little window to get across that border. What-- these feel like really easy things to fix. Given that you've been watching this for a while, what are the impediments to fixing these, these types of barriers? >> There's a number of reasons when it comes to internal trade barriers in general and you can kind of triangulate them to trucking. It can come down to just general inertia, regu-- the regulatory process, sometimes stakeholders have vested interests in the rules being the way they are, sometimes it's difficult for regulators from one jurisdiction to negotiate an outcome with another, and sometimes, you know, with trucking it's physical limitations, right? Sometimes you have a really heavy truck, hard to-- for them to travel across the Prairies where the, the sand is a little softer than across the Canadian Shield in Ontario. >> Some Canadians might be surprised to know that we actually not that long ago put together a Canadian free trade agreement. It's literally an agreement for free trade between provinces. It sounds ridiculous but there it is. How is that working out? Is it as free as we need it to be? >> The Canadian free trade agreement is an excellent addition to our arsenal in sort of liberalizing internal trade. Look. Canada is the second largest country by land mass and in order to keep us as one, and instead of balkanizing, you have to accommodate local differences. So it's okay and the constitution allows for provinces to have areas of jurisdiction. And because of that, and because of local circumstances you might see differences in rules and regulations. But it's good to be able to harmonize where possible, whether it be on certain trucking regulations-- you know, first aid kits, construction codes, you know, alcohol limitations wherever you can find them where they're unnecessary impediments to free commerce domestically. >> As with most of this type of production, Ryan, at the bottom of it all is protection of industries and jobs, right? Nobody would do this if they didn't have some kind of well-intentioned interest in keeping the business there. Liquor's a good example. Alberta went out and dropped its barriers with, with other provinces, including BC, but recently the two provinces got into a fight over booze because BC is not reciprocating and Alberta doesn't appreciate it. It still seems, probably to many Canadians, kind of amazing that something like buying booze, you know, ordering direct from a winery in British Columbia is impossible for somebody in Alberta right now. >> Absolutely. And the story of inter-provincial trade sees beer, and liquor, and wine flow through it pretty much from confederation to the present. And I think beer, and liquor, and wine is something that-- well, many are engaged with and so it becomes very real. And the most recent supreme court decision on our constitutional free trade clause was about a gentleman trying to go buy beer in Quebec and bring it back into New Brunswick. And I think it bec-- it makes it very palpable for us. That's why, you know, it's very-- you know, when get into the topics like workers compensation and occupational health safety limits, those are not as sexy internal barriers but they're just as impactful in many cases. >> Amanda: Absolutely. And in fact, labour mobility

is one thing that's very much affected by some of the regulatory issues across border. Is there a bigger role for the federal government in all of this? >> Absolutely. Leadership from amongst the first ministers-- so premiers and (Unclear -- very, very important to break that gridlock as you said, as you exactly said. So there are vested interests who want to keep the rules, in many cases, the way they are that protect local fiefdoms. And in order to break them you need that strong leadership both from the federal government and from amongst the premiers. >> Ryan, so good to have you for this. Appreciate your time. >> Thank you so much. >> Ryan Manucha is a research fellow at the C.D. Howe Institute. Time for the Takeaway and how we clean up when company's coming. For 30 years, Canadians have been sold on the value of free trade. Trade that's so good that more of it is only better. And there's little doubt that our economy has benefited over time, most notably the ability to sell our products and services tariff-free to the biggest and most robust economy on the planet while also aligning our interests with that trading partner south of our border. Adding in Mexico created what should be a regional powerhouse that is the envy of the world. Recently America's view of trade seems to have cooled a little with an emphasis on made in America running up against the central thesis of free trade, which is that goods and services should be made wherever it's most efficient to do so. That shift causes some trouble for Canada and our exporting businesses but for now, and likely the foreseeable future, we still have a solid trade deal to work with. Where we run into trouble is actually our own backyard with provincial barriers adding to the cost of doing business inside this country, but also through protections that we've layered on over many decades for various industries and businesses. These protections can have the affect of reducing competition. When that happens, our businesses becomes less efficient. One way to make sure that we don't engage in that kind of self-sabotage is through trade deals. There's nothing like the bright light of an outsiders gaze, sort of how we clean up our house best when we know company's coming. Forging new trade deals forces Canada to confront its own behaviour and do better, at least well enough to meet the standards that gain access to new markets. There may be many things we're kicking under the sofa right now that should be set right. My takeaway. Trade deals are a good thing because they open markets for our business but they also force us to be the best version of ourselves. That's Taking Stock for this week. I'm Amanda Lang. Thanks for being with us. (Music Begins) Summer breeze makes me feel fine Blowing through the jasmine in my mind ( ) Summer breeze makes me feel fine (Silence) Blowing through the jasmine in my mind Summer starts here. Get your PC® Summer Insiders Report today. There's a new Tims run in town with new Flatbread Pizza. Served hot out of the oven and freshly prepared in Chicken Parmesan, Pepperoni, Simply Cheese, and Bacon Everything. Try Tims new Flatbread Pizza. It's time for Tims Still keeping tabs on your petthe old fashioned way?There's a better option. Tractive GPS pet trackersgive you live GPS tracking. So you'll know whereyour pet is at all times. Virtual fencing, in case yourescape artist wanders too far. And activity andsleep monitoring, so you have peace ofmind around the clock. All in one easy to use appwith unlimited range and support in over150 countries. Tractive GPS Trackerequals 24-7 peace of mind. Find a great deal foryour ideal hotel.Open trivago, type inwhere you want t select your check-in andcheck-out dates and search. Compare prices forthe same hotel and save up to $50 a night. Hotel? trivago. Arghhh!!! [woman sneezing] Don't let airborne allergens scare you. Aerius provides fast relief of your 15 worst allergy symptoms. So you can love the air again. Aerius. EGO, THE NUMBER ONE RATED BRAND IN CORDLESS OUTDOOR POWER BRINGS YOU THE SELECT CUT MOWER. CUSTOMIZE THE CUT WITH THREE INTERCHANGEABLE BLADES. IT CUTS FOR OVER AN HOUR ON A SINGLE CHARGE. FIND AN EGO RETAILER NEAR YOU. Closed captioning of this program is brought to you in part by Bell switch to Canada's fastest Internet.

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